Is Florida a Good State to Start a Business?

Florida is one of the most noteworthy states in the country, as the Sunshine State is famous for many things.

The beaches on the Gulf of Mexico and the vast wildlife of the Everglades and Ocala National Forest are significant parts of the state. The unique Latin American influence of Miami and Orlando’s many theme parks are also prominent parts of the state.

But another point about Florida that makes it popular is that it’s one of the best states for people to start a business in. Florida has lower taxes than many other states, plus the state has a growing economy and population, making it one of the more valuable markets for businesses to serve.

You may find starting a business in Florida to be easier than what you’d expect in other states. It’s also less expensive to handle many things in Florida, making the state more alluring to businesses and people looking for work.

How Do You Start a Business In Florida?

You can start a business in Florida with ease, plus it won’t cost as much to do as you might expect. You can expect to spend up to $3,000 to start a business, although that total could go under $1,000 depending on your industry, the size of your entity, and your tax structure.

Here are some steps for how you can start a business in Florida:

You will figure out the proper corporate structure for your business.

The Florida Division of Corporations states you can establish one of many businesses in Florida, including a corporation, partnership, sole proprietorship, or limited liability company. The Division of Corporations can help you figure out what format you should follow based on your business size, your current operational plans, and other factors.

You’ll then form your business depending on the layout you will utilize.

A corporation will require articles of incorporation with the Division of Corporations. There are separate forms for for-profit and non-profit corporations.

A separate articles of organization document is necessary for limited liability companies.

Partnerships require more documents from the Department of State, including a registration form and statement of authority.

You can then register your business name.

One option Florida provides involves the creation and registration of a fictitious name for the business. The fictitious name is a “doing business as” name and will be different from your business’s legal name or your personal name. The state’s Fictitious Name Act states that businesses in Florida must register this name with the Department of State before starting a business in Florida. The name must also be advertised at least once in a newspaper within the county where you will operate, although proof of advertisement isn’t required.

You will require business licenses depending on your operation.

Some industries in Florida will require licenses for businesses that wish to operate within the Sunshine State. The Florida Department of State has listings for various licenses businesses can obtain. Many of these licenses come from the state’s Department of Business and Professional Regulation.

Tax Points

Here are a few things about taxes in Florida that show how it’s one of the best states for people to start their businesses:

Florida does not have a state income tax.

This first point is critical for businesses seeking people who can work in Florida. Florida is one of eight states without an income tax. It is also one of two states in the southeastern United States with no income taxes, with Tennessee being the other.

Meanwhile, Georgia has an income tax of up to 5.75%, while Alabama’s rate is up to 5%. Since Florida doesn’t have an income tax, that means employees get to keep more of what they earn.

The corporate tax rate in Florida is 5.5%.

The Tax Policy Center reports that Florida has a corporate tax rate of 5.5%, making it the 32^nd-highest in the country. While the number isn’t as low as the 2.5% rate in North Carolina or 5% in Mississippi, it is still better than the 6.5% rate in Alabama and Tennessee. It is also much lower than the rate in other heavily-populated states. For instance, California has an 8.84% rate. This point is part of why so many businesses have been moving from California to Florida.

Florida has a combined sales tax of about 7% on average.

Florida’s statewide sales tax is 6%, and there’s also a 2% limit on how much additional sales tax a local county or city can charge. The Florida Department of Revenue charges a reduced sales tax of 5.5% on the rental or lease of commercial real property, so it won’t cost as much for businesses to obtain properties for operations.

The average property tax in Florida is around 1%.

H&R Block reports that the average property tax rate in Florida is 0.98%. Many people will pay less than $1,000 a year on property taxes, so this expense won’t be too dramatic. But the rate will vary by county. Jackson County near the borders with Alabama and Georgia has a 0.62% rate, while Sarasota County south of Tampa has a 1.23% rate.

Gasoline taxes are 35.255 cents per gallon, while diesel fuel has a tax of 20.2 cents per gallon.

This tax point is critical for businesses that will use more vehicles or fuel, as these taxes will influence the general value of fuel. But even with these taxes, you’ll find fuel costs to be lower than what you’d find elsewhere. As of May 2023, AAA reports that the average fuel price in Florida is $3.41 per gallon, less than the $3.58 national average. It’s also less than the $4.84 average in California or the $3.96 average in Illinois. Palm Beach County also has the highest expense at $3.62 per gallon.

Growth

A 2022 United States Census Bureau report found that Florida was the country’s fastest-growing state for the year. The state saw a nearly 2% increase in population in 2022. Florida has a population of about 22.2 million, making it the third-largest state in the country. Florida also saw a 14.56% increase in its population from 2010 to 2020 and had the second-highest population rise in that decade, behind only Texas.

Florida has also seen many people move from states with more burdensome tax rates to the Sunshine State. Whereas cities like Los Angeles, San Francisco, and Chicago saw population declines in the 2010s, the Tampa, Orlando, Jacksonville, Sarasota, and Fort Myers areas all saw substantial increases.

More people are moving to Florida for various reasons, whether it’s because it is more affordable to live there or because they want to study or work in the state. There are also plenty of people interested in retiring to Florida, helping increase the prospective number of people who could do business with companies in the state.

There’s also the ongoing consideration of people from Cuba migrating to Florida. Cuba is about 90 miles away from Key West, and many Cubans have fled to Florida due to political strife and general unhappiness with living conditions in Cuba.

Many Markets to Reach

Businesses in Florida will find many different demographic markets they can reach. The odds are your business might have plenty of opportunities to find a target market of value.

Here are a few interesting points about Florida’s population, with many of these points coming from the Census Bureau:

Nearly 21 percent of Florida’s population is 65 or older, while almost 20 percent is under 18.
Almost 20 percent of people in Florida speak Spanish at home.
Nearly 20 percent of residents are foreign-born persons. Many of these people include those who emigrated from nearby Cuba.
There are about 1.4 million veterans living in Florida. Most of the military bases in Florida are in the Jacksonville and Pensacola areas, but the Homestead base near Miami and the Patrick Air Force base in Brevard County are also noteworthy.
About 94 percent of Florida residents have a household computer, and 87 percent have a broadband internet subscription.

Economy and Industries

The gross domestic product or GDP in Florida has consistently grown over the years, with the GDP in Florida growing by nearly 1% from 2017 to 2022. This measure suggests that Florida has done well in rebounding from general economic struggles that started during the early days of the pandemic.

Florida’s GDP is also at about $1.3 trillion, making it the fourth-largest in the country. Florida’s GDP is higher than that of the Netherlands, Saudi Arabia, and Turkey.

Florida’s economy is dominated by various industries:

Agriculture is a prominent field in Florida, as the state is home to major farms for oranges and other citrus fruits, strawberries, and peaches.
The commercial fishing industry is also strong, as Florida has easy access to the Atlantic Ocean and the Gulf of Mexico.
Phosphate mining is heavily active in the Bone Valley region of central Florida. The extensive mining operations here are critical to the production of fertilizer that can be exported to other parts of the country.
The tourism industry is also strong, as nearly 138 million people worldwide visited Florida in 2022. Some of the top producers of Florida’s tourism industry include Orlando’s Walt Disney World and the city’s other theme parks, cruise ships docking at the Port of Miami, and spring break events at various cities and beach communities across Florida.

The Florida Department of Economic Opportunity also reports that there are plenty of jobs available throughout the state. The department reports that the state’s unemployment rate was 2.3% as of April 2023. This value is slightly less than the pre-pandemic low of 3% in February 2020.

Infrastructure

The infrastructure of Florida has helped make it easier for businesses to grow and remain stable. Here are a few parts of Florida’s infrastructure that have helped improve business operations in the state:

There are more than 130 public airports in Florida, with seven of them being classified by the FAA as large or medium-sized airports. Miami, Orlando, Fort Lauderdale, and Tampa have the busiest airports. Secondary airports like Pensacola, Sanford, and Tallahassee are popular among charter airlines.
The Fort Lauderdale Executive Airport and Vero Beach Regional Airport are both busy airports for commercial operations.
Employees in various metro areas in Florida can use public transportation to get to and from places of work. The Miami Metrorail, Tampa’s HART bus system, and Orlando’s Lynx bus system are among the busiest transport services in the state.
There are also multiple highways that serve various parts of Florida. I-95 covers the entire eastern coast and ends in Miami, while US-1 continues down to the Florida Keys and ends in Key West. I-75 goes through much of the state, while I-4 connects Tampa and Orlando. I-70 serves Jacksonville and the Panhandle region.

Education

The last point to note about Florida involves its educational opportunities. Businesses can find many students from different schools around the state when searching to boost their workforces:

The Florida State University System has twelve public schools, including Florida State University in Tallahassee and the University of Central Florida in Orlando.
The state also has various prominent private universities, including the University of Miami in Coral Gables and Stetson University in DeLand.
There are twenty-eight community and state colleges in the Florida College System.
Florida is also home to some religiously-affiliated schools like Bethune-Cookman University in Daytona Beach and Southeastern University in Lakeland.

Conclusion

Florida is an inviting state for businesses to consider when expanding their operations or starting new companies. You will find Florida to be less expensive to operate in, plus it’s easy to create a new business here. The state’s ongoing growth and its extensive demographics also make this state an appealing choice. Be sure when planning your business that you look at what you can expect out of Florida and how it can work for you.