"Rent includes sales tax" Calculations
 

So if I charge X amount of $$ for a rental fee and state that it includes sales tax, do I reverse calculate how much the rent charge is in order to figure out what the sales tax is? The FL DoRevenue website does not get this specific.

My husband is a CPA and says this is correct.

If sales tax is 7%,you divide by 1.07.

If the rent is $1000 you divide by 1.07:
$934.58 for the rent and the difference between that and the $1000 would be the tax.

You just divide the total by 1.07 or whatever the sales tax is.

Are you sure the tax would not be $70.00 if the tax is 7% and the rent is $1000.00?

Jane is correct, except in Sumter Co. the tax is 9%. I did it that way the many years I had my rental. It's nicer for the customer, they know exactly how much it will be without any add ons. You count both the rent as your income and the tax as your expense for taxes. Your rent will be lower than some but including tax, is a great plus.

The premise is that the monthly rent amount "includes" tax. Since you cannot charge tax on a tax. The monthly rent amount must be less than $1000 with the remainder being the tax. It is the same thing as saying the monthly rent is:
$934.58 plus sales tax of $65.42 (934.58 x .07)

Don't know FL law but most states say tax has to be shown as a separate entry on you invoice.

Thanks Indy, didn't think of that!!

You have to register with the Florida Dept of Revenue and the County that the property is in; and do two separate tax returns. You pay quarterly to the County and monthly to the State. And you need to tell the renter the tax they are paying.

Thanks for the responses. Yes, I have registered with the Florida Dept of Revenue. For Sumter Co I am using a total of 9% (6 for state tax, 1 for county discretionary, and 2 for county tourism development). So I am dividing my total charge by 1.09 to determine the amount of rent and go from there to figure the tax. Thanks again

Does Marion, Sumpter & Lady Lake Counties require you pay taxes on short term rentals?

Yes, Lake, Sumter and Marion all require sale's tax on short term rentals.

Why do we need to register with the state of FL? Do we pay all the 9% to the county, right? And we also need to pay federal tax because this is income.

I disagree with Jane, I believe when you file your monthly taxes with the FL Dept of Revenue that you are paying your County taxes then.

When you pay the State of Florida you also pay to the State of Florida the discretionary sales tax for the County which the property is located in. Discretionary sales tax is a special tax separate from the County Tax.

Separately you file to the County whatever their sales tax is.

My husband is a CPA. He knows the rules.