Florida Communications Services Tax: Rates, Sourcing, and Exemptions

The Florida communications services tax is a combined state and local charge on phone, cable, satellite, video, and similar transmission services sold in the state. The state portion totals 7.44%, and local rates set by counties and municipalities push the combined rate on a customer’s bill anywhere from roughly 8.6% to over 14% depending on the service address. Chapter 202 of the Florida Statutes governs the tax, and the Department of Revenue administers it. Providers collect it from customers, show it as a separate line item, and remit monthly.

What Services Are Taxed

The tax reaches any service that transmits voice, data, audio, video, or other signals through an electronic medium, whether by cable, satellite, microwave, radio, or a method that hasn’t been invented yet. VoIP is explicitly included regardless of how the FCC classifies it. Cable television and direct-to-home satellite fall inside the tax as well.¹

Several categories sit outside the tax:

Internet access, excluded under both Florida’s definition and the federal Internet Tax Freedom Act made permanent in 2016.²
Information services that generate, store, or process content rather than transmit it.
Equipment installation and maintenance performed on a customer’s premises.
Sales and rentals of tangible equipment, which are subject to sales tax under Chapter 212 instead.
Directory advertising and other ad sales.
Billing, collection, bad check, and late payment charges.

That last exclusion catches some providers off guard. Billing and collection charges are explicitly carved out, so charging the tax on those line items is an error that will surface in an audit.¹

How the Rate Is Calculated

Two state-level components apply to most communications services:

The state communications services tax at 4.92% of the sales price.
The gross receipts tax at 2.52%, broken into a 0.15% component and a 2.37% component. This tax lives in Chapter 203 but is administered alongside the CST under Chapter 202.

Together, the state portion is 7.44%.³ Direct-to-home satellite service carries a different state rate of 9.07% in place of the standard 4.92%.⁴

On top of the state portion, each county and municipality can adopt its own local rate by ordinance. Charter counties and municipalities can levy up to 5.1%, or 4.98% if they also charge permit fees under Section 337.401. Noncharter counties are capped at 1.6%. Small statutory add-ons are allowed on top of those caps.⁵ In practice, local rates around the state run from about 1.2% to over 7%.

Providers should pull the exact rate for each customer’s service address from the Department of Revenue’s searchable rate table rather than guessing based on a nearby jurisdiction.⁶

Sourcing the Local Rate

For wired services, the local rate follows the customer’s service address. An address inside a municipality gets that city’s rate; an address in an unincorporated area gets the county rate.⁷

Mobile service works differently. Under the federal Mobile Telecommunications Sourcing Act, the local rate for wireless charges is set by the customer’s “place of primary use,” meaning the residential or business street address the customer has on file with the provider. That address must fall within the provider’s licensed service area. Florida incorporates this federal rule, so wireless providers apply one local rate per customer based on the registered address instead of tracking call origination or termination.⁷

Exemptions

Chapter 202 recognizes several exempt categories. Getting these right matters, because an improperly claimed exemption lands on the provider in an audit.

Residential landline service. The separately stated price of communications services sold to a residential household is exempt from the state tax and certain gross receipts components. The exemption does not extend to mobile service, video service, or direct-to-home satellite, and it does not apply to residences operating as transient lodging such as hotels or short-term rentals.
Sales to the federal government or to entities that federal law shields from state taxation.
Sales to the state, counties, municipalities, or political subdivisions, when the government entity pays the provider directly. Employees who pay personally and get reimbursed do not qualify.
Sales to qualifying nonprofits: homes for the aged, religious institutions with an established physical place of worship, and educational institutions, provided the organization holds a 501(c)(3) exemption.
Purchases for resale, when the buyer holds a valid Florida Annual Resale Certificate for Communications Services Tax.

⁸ Resale certificates expire on December 31 each year. The selling dealer must document every exempt resale transaction, typically by keeping the buyer’s certificate on file; once a valid certificate is on file, no new one is needed for additional sales to that buyer during the same calendar year.⁹

Registering, Filing, and the Collection Allowance

Any provider selling communications services in Florida must register with the Department of Revenue as a dealer, collect the applicable state and local tax from each customer, and show the tax as a separate line item on invoices.⁵ If a Florida customer buys from an unregistered out-of-state provider, the customer owes the tax directly to the Department.

Dealers file Form DR-700016, the Florida Communications Services Tax Return. The return and payment are technically due on the first day of the month following the month of sale, but to avoid penalty and interest they must be received or postmarked no later than the 20th of that month.¹⁰ The return breaks out taxable sales, adjustments, and credits by jurisdiction.

Dealers who file on time and in full receive a collection allowance of 0.75% of the tax due. The allowance disappears entirely if the return or payment is late, and the Department can also deny it when a return is incomplete or too disorganized to verify.⁵ On large remittances, that 0.75% adds up.

Penalties for Late Returns

Late penalties escalate fast. A dealer who misses the deadline owes 10% of the unpaid tax if the return is fewer than 30 days late. Each additional 30-day period (or fraction of one) adds another 10%. The total penalty caps at 50% of the unpaid tax.¹¹ Interest accrues on top of that, so an unaddressed liability grows quickly.

Bundled Services

Bundling taxable communications services with nontaxable items creates a trap that catches providers regularly. The default rule is blunt: when taxable and nontaxable services or goods are sold together for a single price, the entire charge is subject to the CST. The only way to avoid taxing the nontaxable portions is to reasonably identify those charges in your books and records. A provider selling a package that combines phone service and internet access needs to allocate each component’s value and document it internally, even if the customer sees one bundled price on the bill.¹²

Unbundling for CST purposes does not automatically exempt the separated charges from tax altogether. Nontaxable portions may still fall under Florida’s general sales and use tax in Chapter 212.

Records and Audits

The Department of Revenue’s standard audit lookback is three years. If a dealer failed to file or filed one or more substantially incorrect returns during that window, the Department can reach back further.¹³

Dealers must keep records of all CST transactions for at least three years. At a minimum, that means invoices, billing records, exemption certificates, resale authorization numbers, and any documentation supporting claimed exemptions or credits. Producing organized records early in an audit tends to close it faster than resisting the request.

The E911 Fee Is Separate

Florida imposes an E911 fee on voice services at $0.40 per month per service identifier, and prepaid wireless pays the same amount per retail transaction. Providers collect the fee alongside the CST, but the E911 fee is not part of the tax base for the CST or any other state or local tax.¹⁴

Disputing an Assessment

When a provider disagrees with a tax assessment, refund denial, or the Department’s interpretation of the law, the first step is filing a written protest within the timeframe stated on the notice, typically 60 days from the date of the proposed assessment or refund denial. The protest must comply with Florida Administrative Code Rule 12-6.003.¹⁵

If informal protest doesn’t resolve the dispute, the remaining routes are an action in circuit court or a petition for a formal hearing under Chapter 120. Missing the protest deadline forecloses the informal process entirely and leaves only the court or formal hearing options.¹⁶ Disputes in this area often turn on how a specific service is classified, whether an exemption was properly documented, or how a bundled transaction should have been allocated, so bringing in counsel before the deadline passes is usually worth the cost.

1
Florida Senate. Florida Code Chapter 202 – Communications Services Tax Simplification Law
2
Congress.gov. H.R.235 – Permanent Internet Tax Freedom Act
3
Florida Department of Revenue. Florida Communications Services Tax Overview and Compliance Guide
4
Florida Senate. Florida Code Chapter 202 Section 12 – Tax Rate
5
Online Sunshine. Florida Code Chapter 202 – Communications Services Tax Simplification Law
6
Florida Department of Revenue. Communications Services Tax Rate Table – Address Lookup
7
Florida Senate. Florida Code Chapter 202 Section 19 – Local Communications Services Tax
8
Online Sunshine. Florida Code Chapter 202 Section 125 – Exemptions
9
Florida Department of Revenue. Communications Services Tax
10
Cornell Law Institute. Florida Admin Code 12A-19.020 – Tax Due at Time of Sale
11
Online Sunshine. Florida Code Chapter 202 Section 28 – Credit for Collecting Tax; Penalties
12
Florida Department of Revenue. Instructions for Completing the Florida Communications Services Tax Return
13
Florida Department of Revenue. What to Expect from a Florida Sales and Use Tax or Communications Services Tax Audit
14
Florida Senate. Florida Code Chapter 365 Section 172 – Emergency Communications
15
Florida Department of Revenue. Informal Dispute Resolution
16
Florida Department of Revenue. Protest Procedures