Merchant Local Business Tax Return & 1% Fee

The City of Panama City imposes a monthly Merchant Fee of one percent (1%) on all retail merchant gross sales. This 1% Merchant Fee applies to ALL retail sales including, but not limited to the following: restaurants, grocery stores, retail shops, hotels, short-term rentals and medical marijuana dispensaries. For lodging establishments, the Merchant Fee is in addition to the five percent (5%) Tourist Development Tax imposed by Bay County. The Merchant Fee is not a tax.

Per Section 7-53 of the Panama City Code of Ordinances, the merchant fee shall apply only to the first $5,000.00 collected for any single item of merchandise sold. 

Frequently Asked Questions (FAQs)

How do I collect the merchant fee?

The City ordinance does not require separation of the merchant license fee from the sales price and may be included within the gross sales price or shown as a separate item as a charge to the customer. Many of our local merchants have decided to pass this amount on to the consumer at the 1% rate and show the charge as a separate line item on receipts. 

 

However, according to the Florida Department of Revenue, the State Sales Tax should be computed on the sales price plus the Merchant Fee. The computation should match one of the below options:

  1. If the merchant chooses to separately list the 1% Merchant Fee, the computation should look like the following:  

 

$499.98 Amount of Sale 

+ 5.00 1% Merchant Fee 

$504.98 Total Sales Price 

+ 35.35 7% State Sales Tax 

$540.33 Total 

OR 

  1. If the merchant chooses to include the 1% in the Sales Price, the computation should look like the following: 

 

$504.98 Amount of Sale (includes the 1% fee) 

+ 35.35 7% Sales Tax 

$540.33 Total 


Where do I pay the merchant fee?

Starting with the 2024-2025 license year, all businesses must use the GovOS online portal for filing Local Business Tax Returns. Paper coupons or payments made without online filings will not be accepted. You will be able to pay online through the GovOs portal.

You can access the portal at https://panamacity.munirevs.com/. 

Alternative Payment Options (only after filing local business tax return online): 

  • In Person: Visit City Hall to pay by cash, check, or money order. Card payments are only accepted online. 


  • Drop Box: Place your payment in an envelope labeled “ATTN: Business Services Department” in the drop box behind City Hall on Grace Avenue. 


  • Mail: Send a check or money order to:  

  • City of Panama City 

  • Attn. Business Services Department 

  • 501 Harrison Avenue

  • Panama City, FL 32401 



When is the merchant fee due?

Payments must be made on a monthly basis. Payments are due by the last day of the month, for the preceding month (for example: January is due by the last day of February, February is due by the last day of March, etc.)

Are there any discounts for the merchant fee?

If payment is received by the 20th of the month in which they are due, you will receive a three percent (3%) discount on the fee amount. For example, if November’s payment is paid on or before December 20th, the discount can be applied.

What if I miss a merchant fee payment?

If the fee is paid after the last day of the month in which it is due, an 8% penalty will be added to the total payment due. The 8% penalty will continue to accrue up to 24% at which time the Business Tax Receipt may be revoked. The penalty will be applied to each and every monthly payment that is delinquent. 

30 Days = 8% penalty

31-60 Days = 16% penalty

61 Days+ = 24% penalty

After 60 Days of delinquency, a FEE VIOLATION sticker may be placed on the front door of the business until the account is made current. This violation sticker can only be removed by an officer of the Code Compliance Department.

After 90 Days of delinquency, your business may be subject to revocation of the Business Tax Receipt, civil actions, and penalties that may include court costs, attorney fees, and administrative costs. Reinstatement will be at the discretion of the City.

What if I did not have any sales for the month?

The minimum monthly payment to keep the local business tax return active and not delinquent is $1.50. This means that you are required to file monthly $1.50 for any sales less than or equal to $150.00.