In yet another slap in the face from the winter season that just wouldn't quit, a spring snow storm tore across the U.S. on April 15th, just as taxpayers were racing to settle-up with Uncle Sam as the final moments of tax season ticked down. Presumably, neither season will be recalled with unmitigated joy by those who experienced the harshest effects of each. That is unless you live in Florida, where both seasons are among the gentlest of their type in the nation.
Weather-wise, Southwest Florida enjoys an average high of 75 degrees between December and April. The average low is 56 degrees and the average monthly precipitation is a scant 2.8 inches. This adds up to precious few winter days that can’t be spent enjoying your favorite warm weather pastimes with virtually no threat of rain.
A Favorable Tax Climate Although most people are aware that moving to Florida establishes a safe distance between you and the worst winter tricks Mother Nature has up her sleeve, what is less well known is that residents of Florida also enjoy an especially favorable tax climate.
For decades—according to the independent research organization Tax Foundation—Florida has rewarded its residents with one of the lowest levels of taxation in the U.S. Indeed, having minimized the overall tax burden it places on residents and businesses, Florida ranks fifth-lowest of states. This is due largely to the absence of a state income tax, making Florida one of only seven states without one—although we daresay that none of the other six states offer such dependably warm winters. Florida’s constitution, in fact, prohibits a state income tax.
Residents of Florida are also exempt from estate taxes, with no portion of what is willed to an individual subject to state inheritance taxes. Likewise, they are immune to taxes on intangible goods such as investments.
States must collect revenues from some taxable sources in order to operate effectively. As such, Florida derives the bulk of its annual revenues mainly from a combination of sales taxes (6%) and property taxes. However, the state’s homestead exemption limits taxation on residential real estate by reducing the value of a primary home that is homesteaded by $50,000 annually for the purpose of assessing taxes. Thus a home valued at $100,000 will be taxed as if it were worth only $50,000. Additional property tax exemptions are available for widows and widowers, senior citizens, disabled homeowners and veterans.
One of the Least Costly in the Nation Florida also generates revenue from other taxable goods and services its residents pay for. These include Documentary Stamp Taxes, which are assessed on documents that transfer ownership of Florida real property, such as warranty deeds and quit claim deeds. Additionally, taxes are charged on fuels, tobacco products, communications and other services.
Florida’s level of corporate taxation, though more complicated to explain, is also ranked fifth lowest in the nation by the Tax Foundation.
Needless-to-say, you should always consult a knowledgeable tax professional to understand Florida’s tax codes and what your personal and/or corporate tax obligations will be once you become a resident. But, just as you can change your winters from a tableau of snow and ice to one of sunshine and warmth, you can change your yearly tax climate to one of the least costly in the nation.
