Dental, MedSpa

Tax Implications of Selling a Medical Practice in Florida

October 1, 2024

Reviewed by Erik Newton, Esq., on November 8, 2026.

Key takeaways

Florida has no personal income tax, but a practice taxed as a C corporation pays Florida corporate income tax of 5.5% on net income above a $50,000 exemption.
In an asset sale, both sides split the price across seven federal asset classes and report it on Form 8594.
Equipment sold with the business is an exempt isolated sale only if the sale is completed within 30 days of the agreement. Inventory and vehicles are excluded.
A buyer of more than half of a practice’s assets can be liable for the seller’s unpaid Florida taxes other than corporate income tax. The exits are a certificate of compliance or a clean audit.
Stock or assets is a trade-off for your CPA, not a default.

Most of the tax in a practice sale is federal. The Florida pieces are smaller, and they arrive after closing, often on the buyer’s desk: a notice for sales tax the seller never paid, a reemployment tax account that came with the staff, a property tax return due April 1.

This is a map of both levels for a dental, medical, veterinary or med spa practice sold in Florida, for seller and buyer. Stock or assets is a trade-off to work through with your CPA, and writing that choice into the letter of intent and the purchase agreement is the legal side of a medical practice sale. Figures are current as of November 2026.

Florida taxes the practice, not you, and only if it is a corporation

Florida has no personal income tax. The Constitution does not allow a tax on individual residents’ income beyond what could be credited against a similar federal tax (Fla. Const. art. VII, s. 5(a)), and the income tax code does not reach partnerships or LLCs taxed as partnerships (s. 220.03(1)(e), Fla. Stat.).

A practice taxed as a C corporation pays 5.5% of its Florida net income (s. 220.11, Fla. Stat.), and the first $50,000 of net income is exempt (s. 220.14). An S corporation is taxed only on income the corporation itself pays federal tax on, such as built-in gain under section 1374 of the Internal Revenue Code (s. 220.13(2)(i)).

When a C corporation sells its assets, the gain lands in the corporation’s own income, from which Florida’s tax is computed. What then reaches the owners is the first number to ask the CPA for. In a stock sale the owners sell their shares instead, and gain on stock is usually capital gain (IRS Publication 544).

The price is split seven ways, and the split moves money between buyer and seller

In an asset sale, federal law treats the deal as a sale of each asset, not of one business (Publication 544). Both sides allocate the price using the residual method under section 1060 of the Internal Revenue Code, and each attaches Form 8594 to its return for the year of the sale (Instructions for Form 8594). The price fills seven classes in order: cash, then certificates of deposit and securities, receivables, inventory, equipment, intangibles such as the patient base and a non-compete, and last, goodwill and going concern value. A written allocation agreement binds both sides unless the IRS determines the amounts are not appropriate.

For the seller, gain on equipment is ordinary income up to the depreciation allowed or allowable on it (section 1245; Publication 544). Goodwill is usually where a seller wants the price, and the seller’s own non-compete is usually where a seller does not: goodwill is generally capital gain to the seller, and a payment for a non-compete is generally ordinary income. Your CPA confirms how that applies to your sale. The rates are in capital gains tax when selling a medical spa.

For the buyer, equipment comes back through depreciation on its own schedule, while goodwill, the patient base and a non-compete signed with the purchase are section 197 intangibles recovered over 15 years (Publication 544). Whether part of the goodwill is personal to one doctor rather than the practice’s is a fact question for the CPA.

Buying into an LLC taxed as a partnership is different: Form 8594 is generally not filed for the transfer of a partnership interest (unless the purchase is treated for tax purposes as a purchase of the partnership’s assets), and when the incoming owner buys from an existing member, that owner’s share of the assets is adjusted for the price only if the partnership has a section 754 election in effect or a substantial built-in loss (Instructions for Form 8594; section 743).

If you are weighing an offer and the allocation schedule is still blank, have the purchase agreement and your CPA’s numbers read together before you sign. Schedule a confidential consultation

Equipment can change hands without sales tax if the closing keeps pace

Every sale of tangible personal property in Florida is taxable unless specifically exempt (Rule 12A-1.039(1)(a), F.A.C.). Business assets sold with the business, other than inventory and aircraft, boats, mobile homes and motor vehicles, are an exempt isolated sale if the sale and the transfer of the assets are completed within 30 days from the date of the agreement for the sale of the business (Rule 12A-1.037(2)(d), F.A.C.). Signing and closing on the same day avoids the question.

Past 30 days, the sale can still be an exempt occasional sale on the rule’s conditions, among them that the seller paid any tax that applied to the property, did not buy it for resale, and has made no more than two such sales in 12 months (Rule 12A-1.037(3) and (5)). Neither exemption covers property on which the seller never paid the tax owed, unless the time to assess it has run (Rule 12A-1.037(2)(a)4. and (3)(b)1.).

Inventory is outside both. Retail products the buyer will sell, such as whitening kits or skin care, can pass as a sale for resale if the buyer is an active registered dealer and the seller keeps a copy of the buyer’s Annual Resale Certificate (Rule 12A-1.039). Supplies the practice uses up are not resold, so the resale exemption does not cover them; whether they are inventory under the isolated-sale rule, which does not define the word, is for the CPA. Everyday sales tax on supplies is in Florida sales tax for medical practices.

The buyer can inherit the seller’s Florida tax bill

A buyer of more than 50 percent of a business, its assets or its stock of goods is liable for unpaid tax the seller owes from operating the business, up to the greater of the fair market value of what was transferred or the purchase price (s. 213.758, Fla. Stat.). The taxes covered are those the Department of Revenue administers, sales tax, documentary stamp tax and reemployment tax among them, but not corporate income tax. The seller must file a final return and pay within 15 days after the transfer.

The buyer is not liable if the seller provides the Department’s receipt or certificate of compliance showing no notice of audit, all returns filed and the tax on them paid, and the two sides have no insiders in common (s. 213.758(4)(a)). The buyer may also withhold part of the price and pay it to the state within 30 days after the transfer (s. 213.758(4)(b)). In the purchase agreement, that becomes a closing condition, a holdback, or both.

If the buyer carries on the seller’s employing enterprise, Florida can treat both as one employer with a continuous employment record for reemployment tax, and the buyer as successor must pay any contributions the seller left unpaid within 30 days after the notice listing them (s. 443.131(3)(g)1., Fla. Stat.).

In a stock sale the company keeps its own tax accounts and whatever it owes, so the buyer looks to diligence and the indemnity instead.

Three smaller Florida items belong on the closing checklist

Documentary stamp tax on a seller note or a deed

A promissory note to the seller carries documentary stamp tax of 35 cents on each $100, and for a note taxed under that paragraph the tax may not exceed $2,450 (s. 201.08(1)(a), Fla. Stat.). If a mortgage securing the note is recorded in Florida, the tax is paid on the mortgage, with no such cap (s. 201.08(1)(b)). A deed to the practice’s real estate carries 70 cents on each $100 of the consideration (s. 201.02(1)(a)), and in Miami-Dade a county surtax may be added for property other than a single-family residence (s. 201.031). The agreement should say who pays each.

The tangible personal property return

Equipment and furniture are assessed for property tax as of January 1 (s. 192.042(2)). The return is due April 1 (s. 193.062(1)), and each return is eligible for an exemption of up to $25,000 of assessed value (s. 196.183(1)), which is lost for any year a required return is not filed on time (s. 196.183(5)). The agreement should say how the year-of-sale bill is split.

Rent no longer carries sales tax

Florida repealed the sales tax on commercial rent effective October 1, 2025 (ch. 2025-208, s. 37, Laws of Fla.). Rent for periods through September 2025 is still taxable even if paid later (Department of Revenue, Tax Information Publication 25A01-04). See Florida repeals the sales tax on commercial rent.

The tax result is set before closing, in the documents

The letter of intent sets the structure, the purchase agreement sets the allocation, and the closing checklist decides whether Florida’s certificates and filings are in hand. If you are buying or selling a dental practice or a medical, veterinary or med spa practice in Florida and the structure or allocation is not settled, have the deal terms read against your CPA’s numbers before you sign. Schedule a confidential consultation

Frequently asked questions

What are the tax consequences of selling a dental practice in Florida?

Florida has no personal income tax, so most of the tax on a dental practice sale is federal. A practice taxed as a C corporation also pays Florida corporate income tax of 5.5% on net income above a $50,000 exemption. In an asset sale, both sides report the price allocation on Form 8594, and gain on equipment is ordinary income up to the depreciation allowed or allowable.

How is the purchase price allocated when you buy a medical practice?

In an asset purchase, buyer and seller allocate the price with the residual method under section 1060, filling seven classes in order and assigning whatever is left to goodwill and going concern value. Both file Form 8594 for the year of the sale. The buyer recovers goodwill, the patient base and a non-compete over 15 years.

Is there Florida sales tax on medical supplies and equipment when a practice is sold?

Equipment sold with the business is an exempt isolated sale if the sale and transfer are completed within 30 days of the agreement and the seller paid any sales or use tax due on it, and otherwise may qualify as an exempt occasional sale. Inventory and vehicles are excluded from the isolated-sale exemption. Supplies the practice uses up are not resold, so the resale exemption does not cover them.