Florida

Inventory Exemption

Fla. Stat. § 196.185 provides: "All items of inventory are exempt from ad valorem taxation." Fla. Stat. § 192.001(11)(c)1. defines inventory as "only those chattels consisting of items commonly referred to as goods, wares, and merchandise (as well as inventory) which are held for sale or lease to customers in the ordinary course of business." Supplies and raw materials "shall be considered to be inventory only to the extent that they are acquired for sale or lease to customers in the ordinary course of business or will physically become a part of merchandise intended for sale or lease to customers in the ordinary course of business." Partially finished products which when completed will be held for sale or lease to customers in the ordinary course of business are deemed items of inventory. "Items of inventory held for lease to customers in the ordinary course of business, rather than for sale, shall be deemed inventory only prior to the initial lease of such items." Inventory and household goods are expressly excluded from the definition of tangible personal property (Fla. Stat. § 192.001(11)(d)). The Florida Department of Revenue likewise states that inventory and household goods are excluded from TPP.

Sources: https://www.flsenate.gov/Laws/Statutes/2026/196.185. https://www.flsenate.gov/Laws/Statutes/2026/192.001. https://www.floridarevenue.com/property/Pages/Taxpayers_TangiblePersonalProperty.aspx

$25,000 Tangible Personal Property Exemption

Each tangible personal property tax return is eligible for an exemption from ad valorem taxation of up to $25,000 of assessed value (Fla. Stat. § 196.183(1)). A single return must be filed for each site in the county where the owner transacts business. For this section, a "site where the owner of tangible personal property transacts business" includes facilities where the business ships or receives goods, employees of the business are located, goods or equipment of the business are stored, or goods or services of the business are produced, manufactured, or developed, or similar facilities located in offices, stores, warehouses, plants, or other locations of the business (Fla. Stat. § 196.183(2)). The Florida Department of Revenue states that if you file your TPP return by April 1, you will be eligible for a property tax exemption of up to $25,000 of assessed value. The requirement that an annual return be filed is waived for taxpayers owning taxable property the value of which, as listed on the return, does not exceed the exemption, but "a taxpayer must file an initial return on which the exemption is taken" (Fla. Stat. § 196.183(3)). The exemption does not apply in any year a taxpayer fails to timely file a return that is not waived (Fla. Stat. § 196.183(5)).

Sources: https://www.flsenate.gov/Laws/Statutes/2026/196.183. https://www.floridarevenue.com/property/Pages/Taxpayers_TangiblePersonalProperty.aspx

Is business inventory taxed in Florida?

No. Fla. Stat. § 196.185 provides that all items of inventory are exempt from ad valorem taxation. Inventory and household goods are expressly excluded from the definition of tangible personal property (Fla. Stat. § 192.001(11)(d)).

What counts as inventory in Florida?

Fla. Stat. § 192.001(11)(c)1. defines inventory as only those chattels consisting of items commonly referred to as goods, wares, and merchandise (as well as inventory) which are held for sale or lease to customers in the ordinary course of business. Supplies and raw materials are inventory only to the extent that they are acquired for sale or lease to customers in the ordinary course of business or will physically become a part of merchandise intended for sale or lease to customers in the ordinary course of business. Partially finished products which when completed will be held for sale or lease to customers in the ordinary course of business are deemed items of inventory. Items of inventory held for lease, rather than for sale, are deemed inventory only prior to the initial lease of such items. The definition also provides that all livestock shall be considered inventory and that, for the purposes of that section, fuels used in the production of electricity shall be considered inventory.

When is the Florida property tax assessment date?

January 1. Tangible personal property is assessed on January 1, except that construction work in progress shall have no value placed thereon until substantially completed as defined in s. 192.001(11)(d) (Fla. Stat. § 192.042(2)).

When is Florida Form DR-405 due?

By April 1. Anyone who owns tangible personal property on January 1 and who has a proprietorship, partnership, or corporation, or is a self-employed agent or a contractor, must file a tangible personal property return with the property appraiser by April 1 each year (Florida Department of Revenue; Fla. Stat. § 193.062). Complete Form DR-405 and submit it to your property appraiser, reporting all property located in the county on January 1. Confirm locally with the county property appraiser.

Do I still file a TPP return if inventory is exempt?

Inventory being exempt does not remove the obligation to file for other taxable tangible personal property. The Florida Department of Revenue states that anyone who owns TPP on January 1 in a proprietorship, partnership, or corporation, or as a self-employed agent or contractor, must file. After an initial return on which the $25,000 exemption is taken, the annual-return requirement is waived while taxable property as listed on the return does not exceed that exemption (Fla. Stat. § 196.183(3)). If, in subsequent years, the taxpayer owns taxable property the value of which, as listed on the return, exceeds the exemption, the taxpayer is obligated to file a return.

What is the $25,000 tangible personal property exemption in Florida?

Each tangible personal property tax return is eligible for an exemption from ad valorem taxation of up to $25,000 of assessed value (Fla. Stat. § 196.183(1)). The Florida Department of Revenue states that if you file your TPP return by April 1, you will be eligible for that exemption. The exemption does not apply in any year a taxpayer fails to timely file a return that is not waived (Fla. Stat. § 196.183(5)).