Discretionary sales surtax is an additional tax that is added to state sales and use taxes on the sale, rental, lease, license to use or consumption of tangible personal property (e.g., furniture or automobiles) or taxable services such as prepaid calling arrangements and electricity consumed at a location where the surtax applies. Unlike state sales and use tax, which is levied on all purchases in Florida, discretionary sales surtax is only imposed on certain types of transactions and at a specific rate for each county.

Typically, the discretionary sales surtax rate is tied to the local option county sales tax rate in effect in the county where the taxable transaction occurs. Those rates are determined by referendum held in the local government. Florida counties that impose discretionary sales surtax must collect it along with the state sales and use tax and remit the combined amount to the Department of Revenue. The Department distributes the collected funds to the counties for their use on locally authorized projects.

Retailers must accurately determine the correct sales tax rates for every transaction that they impose or collect. The wrong rate can lead to costly under or over collection of sales tax, which may result in a state or class action lawsuit against the retailer.

For a high-volume retailer, even small tax discrepancies can add up over the course of 3 years of regular sales tax audits. A common confusion is the $5,000 surtax cap for bulk purchases that are to be fabricated into working units. To help retailers avoid misunderstandings, the Department has updated its annual listing of local option county sales tax rates in DR-15DSS, which is available on the Sales and Use Taxes webpage.