The fact that Florida doesn't impose a personal income tax can make your choice of entity for operating your business more important than ever. If it is possible to set up your business as a sole proprietor, partnership or S corporation, you will not have to pay Florida tax on your income. Of course, business considerations other than state tax implications must be taken into account when making a decision as to how to best operate your business. You may want to consult with your financial professional when making this important decision.