In Florida, Limited Liability Companies (LLCs) are not required to pay a franchise tax. Unlike corporations, which are subject to corporate tax in Florida, LLCs are exempt from this tax.
The franchise tax is imposed on corporations and partnerships for the privilege of doing business in the state and is calculated based on the entity's net worth (assets minus liabilities) with rates ranging from 0.25% to 5.5%. However, Florida LLCs avoid this tax. Instead, LLC profits pass through to members, who only pay federal income taxes on their earnings.