What is the sales tax on selling a business in Florida?

calculating numbers for sales tax of selling a business with pen and calculator

Whether you are selling or purchasing a business in Florida, it is important to know what taxes will be imposed, and on whom. On average, the profits an individual makes from selling a business is what is actually taxed.

The Florida Capital Gains tax

In Florida, the capital gains tax is the tax imposed on any profit an individual makes from selling their business in Florida. This tax is only imposed when capital assets are sold, such as machinery, equipment, and vehicles, but not on stock shares. This taxed is imposed on the seller. How much tax is imposed is contingent on whether the assets being sold were held for more than one (1) year, or less than one (1) year. 

If the assets were held for more than a year, than the capital gain is long-term. There, the long-term capital gain is taxed at a rate no higher than 15% for most individuals. 

If the assets were held for less than a year, than the capital gain is short term. There, the short-term capital gain is taxed based on an individual’s ordinary income, based on the individual’s tax rate. Some individual tax rates can be as high as 37%. This drastic difference between the long-term and short-term capital gain tax is an incentive for individuals to avoid selling their business if it was created less than a year from the selling date.

When selling a business, you must look at every single asset to determine whether they are long-term or short-term.

Does the structure of a business affect the capital gains tax?

Generally, whether a business is an LLC, a sole proprietorship, or a C-Corporation affects how the capital gains tax is imposed.

Capital gains tax when selling an LLC or Sole Proprietorship

An LLC and a sole proprietorship can be considered “disregarded entities”, as a result, they do not file commercial tax returns and the capital gains tax will only be imposed once.

Capital gains tax when selling a C-Corporation

On the other hand, a C-Corporation pays a corporate tax and therefore, the capital gains tax is imposed twice on any profits from the sale of a C-Corporation.

If you are looking to sell a business, it is important to be prepared for what type of taxes, and how much taxes, which will be imposed on your profit.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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