Thousands of individuals and hundreds of small businesses relocate to Florida each and every year. For some, it’s the long list of Florida tax savings that draws them to the state. For others, it’s to enjoy a warm and beautiful place to retire. The Florida weather is picture perfect year-round, and it also offers the perfect climate for business and here is why:
List of Florida Tax Savings
Comparing the state of Florida to other states, here is a shortlist of tax penalties that you may be subjected to in other states. When you move to Florida you will no longer be obligated to pay:
- Intangible Personal Property Tax: Many states collect a tax on intangible assets such as stocks, bonds, and accounts receivable. The rates vary state by state but can be as high as 2% of the assessed value of the asset. The Florida Legislature repealed the Intangible Personal Property Tax in 2006.
- Inheritance and Gift Tax: Several states collect an Inheritance or Gift Tax from the beneficiaries of an estate. The tax burden can be quite substantial. For instance, the tax rate in New Jersey can be as much as 16%. While the first $25,000 of the inheritance is exempt, anything over that amount is taxed at a rate of 11% or more. The State of Florida does not collect inheritance and gift tax.
- Vehicle Property Tax: If you live in Rhode Island you may want to consider a move to Florida. The annual tax rate there for a $24,000 vehicle is $1,144. The vehicle property tax rate in Florida is ZERO. For anyone migrating from Rhode Island, this may be your favorite of all of the Florida tax savings benefits.
- Food & Medical: For the most part, all general grocery items and most medical items are non-taxable in Florida. If you have any concern about a specific item, you can refer to this list at FloridaRevenue.com. While groceries are tax exempt in most states there are few states that charge tax on these items including Alabama, Mississippi, Kansas, Idaho and a handful of other states.
- Personal Income Tax: Florida is one of a short list of states that do not collect individual income tax. This may be the largest, or at least the most popular, of all of the Florida tax savings benefits for residents of the state. The others include Texas, Tennessee, South Dakota, Wyoming, Nevada, Washington, and Alaska. If you reside in any other state, your out of luck.
Florida Tax Savings Scenarios for Individuals & Businesses
Florida is a great place to start a small business or relocate a business from another high-tax state such as New York or Connecticut. The two tables below demonstrate the amount of tax you could save by relocating to Florida.
Overall Florida Tax Savings
When you consider the overall combined tax burden on residents, Florida ranks fairly high on the list of states with the lowest overall tax rate. With a combined rate of just 8.83%, Florida ranks 9th as one of the lowest taxed states. This calculation is a tally of the total effective tax rate, including State & Local Taxes, based on the median household income in the state. Alaska tops the list at 5.67%, but unless you like snow and polar bears, Florida is a much better choice. The map below tells the story: