Florida does not have a capital gains tax on individuals. The state constitution bars any personal income tax, and because capital gains are a form of income, profits from selling stocks, real estate, a business, or any other asset escape state-level tax entirely. Corporations are the exception: Florida’s 5.5% corporate income tax applies to their gains. Everyone else still owes federal capital gains tax, and that is where the real bill comes from.
Why Florida Residents Owe Nothing to the State
Article VII, Section 5 of the Florida Constitution prohibits the state from levying an income tax on natural persons who are residents or citizens. The ban covers every category of income, including wages, interest, dividends, and capital gains. Short-term or long-term makes no difference. The Florida Department of Revenue confirms the state has no income tax for individuals and therefore no capital gains tax for individuals.1Florida Department of Revenue. Does Florida Have a Capital Gains Tax?
A resident who sells a rental property, cashes out a brokerage account, or liquidates a business pays zero to Florida on the gain. Non-residents who sell property located in Florida also owe no Florida income tax, because the state has no mechanism to tax individual income from any source. Florida funds itself through sales taxes, property taxes, and the corporate income tax instead.
What You Owe the Federal Government
The IRS taxes capital gains based on how long you held the asset.2Internal Revenue Service. Topic No. 409, Capital Gains and Losses Assets held one year or less produce short-term gains, taxed at your ordinary income rate, which can climb as high as 37%. Assets held more than a year qualify for the preferential long-term rates.
For 2026, single filers pay:
- 0% on taxable income up to $49,450
- 15% on taxable income from $49,451 to $545,500
- 20% on taxable income above $545,500
Married couples filing jointly get the 0% rate up to $98,900, the 15% rate from $98,901 to $613,700, and the 20% rate above that. The thresholds are adjusted for inflation annually. Report gains and losses on Schedule D of Form 1040.3Internal Revenue Service. About Schedule D (Form 1040), Capital Gains and Losses
Selling Your Home
For most Florida homeowners, the largest gain they will ever realize is the one from selling their house, and federal law removes the tax on it for the vast majority of sellers. If you owned and used the property as your primary residence for at least two of the five years before the sale, you can exclude up to $250,000 of gain from your income, or up to $500,000 as a married couple filing jointly.4Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
A surviving spouse who sells within two years of their spouse’s death can still claim the full $500,000 exclusion if the couple would have qualified immediately before the death. Because Florida charges nothing on the gain in the first place, the federal exclusion usually makes the sale entirely tax-free.5Internal Revenue Service. Topic No. 701, Sale of Your Home
The exclusion does not extend to investment properties, vacation homes, or any property you never lived in as your primary residence. Gain above the threshold is taxed at the applicable long-term rate.
The 3.8% Surtax on Higher Incomes
Higher-income sellers face an additional federal charge on top of the long-term rate. The net investment income tax adds 3.8% and applies to the lesser of your net investment income or the amount your modified adjusted gross income exceeds these thresholds:6Internal Revenue Service. Topic No. 559, Net Investment Income Tax
- $200,000 for single or head of household
- $250,000 for married filing jointly
- $125,000 for married filing separately
These thresholds are not indexed for inflation, so more taxpayers cross them each year. A single Florida resident with $300,000 in modified adjusted gross income and $80,000 in long-term gains can end up paying both the 15% rate and the 3.8% surtax on a portion of those gains, pushing the effective federal rate close to 19%.
LLCs, S-Corporations, and Partnerships
Business owners often ask whether gains realized through an entity trigger Florida tax. Classification for federal purposes controls, not the label on the paperwork.
An LLC classified as a corporation for federal tax purposes files a Florida corporate return and pays 5.5% on its gains.7Florida Department of Revenue. Corporate Income Tax An LLC classified as a partnership must file a Florida Partnership Information Return (Form F-1065) only if one or more owners is a corporation, and the corporate owner then reports its share on its own Florida corporate return. A single-member LLC that is disregarded federally files no separate Florida return at all; the income lands on the owner’s federal return, and if the owner is an individual, Florida takes nothing.
S-corporations are generally not subject to Florida corporate income tax because their income flows through to shareholders. The narrow exception is an S-corporation that owes federal income tax at the entity level, which can happen with built-in gains or excess passive investment income. In that case a Florida return is required.8Florida Department of Revenue. Instructions for Corporate Income/Franchise Tax Return
The practical rule: if gains flow through to you personally on your federal return, Florida will not tax them. The state tax attaches only when a corporation, or an entity taxed as one, earns the income at the entity level.
Corporate Capital Gains at 5.5%
Corporations doing business in Florida pay a flat 5.5% on net income, capital gains included. The rate has been in effect for tax years beginning on or after January 1, 2022.9Florida Department of Revenue. Tax and Interest Rates
The calculation starts from federal taxable income, which already reflects capital gains and losses, and then applies Florida-specific additions and subtractions. One difference from federal treatment: net capital losses can never be carried back, though they can be carried forward on the same terms as under the Internal Revenue Code.10Florida Senate. Florida Statutes 220.13 – Adjusted Federal Income Defined
The first $50,000 of a corporation’s Florida net income is exempt. Above that, the 5.5% rate applies to every dollar. Corporations file Form F-1120 annually.7Florida Department of Revenue. Corporate Income Tax
The Documentary Stamp Tax Is Not a Capital Gains Tax
Selling real estate in Florida triggers a transfer tax that people sometimes mistake for a capital gains tax. They are different animals. The documentary stamp tax applies to the total sale price, not the profit, and you pay it whether you made money or lost money on the sale.
In every Florida county except Miami-Dade, the rate is $0.70 per $100 of consideration, meaning cash paid plus any mortgage assumed or satisfied.11Florida Department of Revenue. Florida Documentary Stamp Tax A $400,000 sale generates $2,800 in stamp tax. Miami-Dade uses a $0.60 per $100 base rate but adds a $0.45 per $100 surtax that does not apply to single-family homes, so a Miami-Dade house sale is taxed at $0.60 per $100, while a condo building or commercial transfer pays the combined $1.05 per $100. These charges reduce your net proceeds at closing, but they are not taxes on your gain.