Open your Florida contracting business in the order that keeps the comp exemption available

The two cheapest filings on Sunbiz are $75 apart. A fictitious name registration, which is what a sole proprietor files, costs $50. A Florida LLC costs $125, being $100 for the articles of organization and $25 for the mandatory registered agent designation. Only one of the two leaves you able to hold a construction workers' compensation exemption. The other closes that door on the day you file it.

Chapter 440 treats a construction sole proprietor or partner as an employee of the business, and an employee cannot exempt himself. The certificate of exemption is written for corporate officers and LLC members, so the entity has to exist before the exemption can. Outside construction none of that applies, which is exactly why the wrong version travels so well.

By the end of this page you will have picked the entity knowing which side of Chapter 440 it puts you on, a filing order that leaves the DWC-250 exemption reachable rather than closed, a May 1 date in your calendar carrying $138.75 instead of $538.75, and the two tax registrations opened before anybody asks for them. Everything below is written against the 2025 Florida Statutes and the current Division of Corporations fee schedule.

Pick the entity as a workers' compensation decision, because in Florida construction that is what it is

Two numbers get quoted at Florida contractors constantly and both belong to a different regime. The first is that a sole proprietor does not need workers' compensation. The second is that coverage starts at four employees. Both are true of a landscaping supply shop and neither is true of you. In construction the coverage trigger is one employee, officers and members included unless they hold a certificate, and the sole proprietor is himself that one employee under s.440.02.

Read the bottom of that table as the price list it is. The LLC costs $75 more to open and $138.75 a year to keep, and it is the cheapest route in the state to a certificate of exemption that costs $50 and lasts two years. Formation plus exemption is $175 all in. The sole proprietorship saves you $75 on day one and then leaves you buying coverage on yourself for as long as you are in business, because no form exists that gets you out of it.

The entity also gives you a party to the contract that is not you personally. Florida licenses construction heavily and the license attaches to a human being rather than to a company, which makes people assume the entity is decorative. It is the thing standing between a claim on a job and the truck in your driveway.

File with Sunbiz in the order the exemption is read in

The exemption is not a form you file on its own. On the day it is processed it is read against the state's records, in this sequence.

1. The entity is active on Sunbiz. Articles filed, annual report current, not administratively dissolved.
2. The member or officer claiming it is recorded at 10% ownership or more. Recorded on the state's record, not agreed in an operating agreement nobody has seen.
3. Then the DWC-250. Filing is electronic and mandatory under s.440.05(3), with the online tutorial completed first. The fee is $50 under s.440.05(8)(a). The certificate runs two years under s.440.05(6), and no more than three officers or members per entity can hold one.

It fails backwards too. If the entity is later administratively dissolved, the exemption is invalid from that moment, whatever the certificate in your glovebox says.

Stages 2 through 6 are a week if you are slow about it. Sunbiz approves online filings in days, and the EIN is free and takes minutes once the entity exists. It is the number a general contractor's accounts payable clerk asks for before your first invoice clears.

Put May 1 on a clock before the $400 ever exists

The Sunbiz annual report window opens January 1 and closes May 1. For an LLC it is $138.75. File on April 28 and that is the whole bill. File on May 2 and a $400 late fee is added, so the same one page form costs $538.75. For a profit corporation the report is $150 and becomes $550.

There is no provision to waive it. Not for a first offence, not for a hurricane, not for an address the state did not have. It is $400 for four days.

Then it gets worse quietly. An entity whose annual report is still unfiled is administratively dissolved on the fourth Friday of September, which in 2026 is September 25. A dissolved entity is not active on Sunbiz, so step one of the chain above stops being true and your exemption goes with it. You are now an uninsured construction employer while still on site, which is stop-work order territory under Chapter 440 with a penalty pegged to the premium you avoided. A $400 clerical miss becomes your comp status, your access to a general contractor's site, and a shut job.

Qualify the entity with the CILB, or the license on your wall does not cover the company

The license attaches to the individual, called the qualifying agent, and the company you just formed holds nothing until a primary qualifying agent qualifies it and it receives a certificate of authority under s.489.119. That agent carries supervisory responsibility and joint and several liability for it.

The cost of getting this wrong is not a fine, it is the receivable. Under s.489.128(1), contracts entered into on or after October 1, 1990 by an unlicensed contractor are unenforceable in law or in equity by the unlicensed contractor, and s.489.128(1)(a) makes a business entity unlicensed when it has no qualifying agent for the scope of the work. Status is fixed as at the effective date of the original contract under s.489.128(1)(c), so qualifying the entity in month three does not repair a contract signed in month one. On a $180,000 remodel that is $180,000 you cannot sue for.

One line of the same statute cuts the other way. Under s.489.128(1)(b), not holding a Chapter 205 local business tax receipt does not make you unlicensed. Get the receipt for the reasons below, and do not let anybody tell you it is what makes your contracts enforceable.

Once the entity is qualified, s.489.119(5)(b) applies to your marketing: the license number goes on every advertisement, bid, offer and proposal, in every medium. Put it in the proposal and invoice templates once and it stops being something you remember. The agent relationship itself is the Florida qualifying agent, and the license is getting your Florida contractor's license.

Open the DR-1 account before you buy the first pallet of materials

Form DR-1, the Florida Business Tax Application, is one free registration covering sales and use tax and reemployment tax together. Open it before the first material purchase, because whether you or your customer pays the tax is decided by the shape of the contract at signing.

Rule 12A-1.051 sets that taxonomy. Lump sum, cost plus, fixed fee, guaranteed price, upset price and time and materials contracts all make you the ultimate consumer: you pay tax on materials when you buy them and charge your customer none. A retail sale plus installation contract makes you a retailer: you buy with a resale certificate and collect tax from the customer on the materials price. The test for the second is strict and it happens up front, since every material to be incorporated must be itemized and priced in the contract before work begins. Fail it and the contract reverts to real property treatment with you as consumer of everything.

The state rate is 6%. Your county's discretionary sales surtax sits on top, and it is the one number here only you can look up. Two things about it are worth saying plainly. The Department of Revenue's general surtax page describes the range as 0.5% to 1.5%, and for 2026 the actual rate table does not agree: Hamilton County reaches 2.0%, being a 1% small county surtax plus a 1% enhanced fire protection surtax, while Citrus and Collier impose none at all and Palm Beach and Martin both dropped from 1% to 0.5% for 2026. The authority is the DR-15DSS table for the calendar year, and the file name matters, because the unsuffixed copy still serves last year's rates. The surtax is sourced to the delivery county, which on a job means where the materials land, and it applies only to the first $5,000 of the price of any single item of tangible personal property. Contract by contract, that is Florida sales tax on construction contracts; what it does to a quote is pricing Florida jobs.

The same DR-1 opens the reemployment tax side, which switches on with wages. Register within 20 days of becoming liable, meaning $1,500 of wages in a quarter or one employee in 20 weeks. The wage base is $7,000, the return is the quarterly RT-6, and every new hire is reported to the Department of Revenue's Child Support Program within 20 days of the hire date.

One more rule to set up front rather than discover in an audit. Paying a helper on a 1099 does not make him a contractor here. Under s.440.02(18)(c) a construction worker you pay is your employee unless he carries his own coverage or his own valid exemption. When you are the one hiring subs, s.440.10(1)(c) requires you to obtain evidence of a subcontractor's workers' compensation insurance, and s.440.10(1)(b) leaves you as statutory employer on sublet work. Skip the check and the sub's payroll lands on your premium audit while his injured employee's benefits land on you. Both sides of that are the Florida workers' comp exemption.

Buy the local business tax receipt in the county and in the city

Chapter 205 receipts are local and they stack. Work in Orlando and you are likely looking at Orange County and the City of Orlando, both. Miami-Dade, Broward, Hillsborough and Duval each run their own, and a contractor crossing a metro area holds several.

The receipt year expires September 30, renewals open July 1, and on October 1 the penalty is 10% plus 5% for each additional month, capped at 25%. Small money, and exactly the kind of small money that stops a permit desk mid conversation.

What it costs

There is no monthly subscription. The platform fee is 2.5% of each invoice processed through AEC Stack, collected on payment due dates.

Everything below goes to the state, the county or the federal government, not to us.

Registering a Florida business on AEC Stack starts at the new market registration. You pick Florida, then the entity form from the live US-FL registry, and each form carries the state's own facts on its face: the sole proprietorship row says in as many words that a construction sole proprietor is an employee under Chapter 440 and cannot take the exemption, and the LLC row carries the $138.75, the May 1 date, the non-waivable $400 and the ordered exemption chain. The formation package is then assembled for you, with the three things it will not guess at asked as questions: your registered agent and their street address, the member whose recorded ownership carries the exemption, and the license holder who will qualify the entity. You press submit at Sunbiz yourself, so the state account, the document number and the login stay in your name.

Open the new market registration, choose Florida, and read the trap text on the two entity cards before you fill anything in. Those few lines are the $75 decision, and they take a minute to read.