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Florida Tax Guide: Income, Estate and Property Taxes 2021

Florida Tax Guide: Income, Estate and Property Taxes 2021
20 Jul
7:58

Updated on Monday, July 19, 2021

There’s a reason retirees and millionaires flock to Florida, besides the warm weather and miles of coastline: Florida has one of the lowest tax burdens of any state. The Sunshine State has no state income tax, average sales tax rates compared to other states and relatively low property taxes. Florida is able to fund government operations without levying a personal income tax or high property taxes largely because of revenue from sales taxes paid by tourists.

If you’re considering a move to Florida, a financial advisor can help you navigate the nuances of federal, state and local taxes. Check out our list of the best financial advisors in Florida if you need help finding one or read on to learn more about taxes in Florida.

Tax overview in Florida

Florida does not have a state income tax for individuals.

Florida imposes a corporate income/franchise tax on all corporations (and LLCs that elect to be classified as a corporation for tax purposes) that conduct business, derive income or exist within the state.

From Jan. 1, 2019 through Dec. 31, 2021, the Florida tax rate is 4.458% of the corporation’s Florida net income. On Jan. 1, 2022, the corporate tax rate is scheduled to increase to 5.50%. However, even with the increase, Florida’s corporate tax rate will still be one of the lowest in the U.S.

Since Florida has no individual income tax, pass-through businesses (those structured as sole proprietorships, partnerships, LLCs and S corporations) don’t pay Florida state income taxes on their profits.

Property tax in Florida

In Florida, property taxes are levied by counties, and rates vary by jurisdiction. According to the Tax Foundation’s 2020 analysis of data from the U.S. Census Bureau, the average property tax rate (as a percentage of owner-occupied housing value) in Florida is 0.94%, putting Florida right in the middle to rank at No. 25 out of 50 for states with the highest residential property taxes.

The state has a few property tax exemptions and other benefits that can reduce property owners’ tax liability. These include:

  • Homestead exemption: The homestead exemption provides a $50,000 maximum exemption off the home’s value for a taxpayer’s permanent residence, or the permanent residence of their dependent. According to the Florida Department of Revenue, “[t]he first $25,000 applies to all property taxes, including school district taxes. The additional exemption up to $25,000 applies to the assessed value between $50,000 and $75,000, and only to non-school taxes.” To apply for the homestead exemption, the property owner must complete an application, Form DR-501.
  • Save Our Homes Assessment Limitation: The Save Our Homes (SOH) Assessment Limitation caps the percentage by which a homeowner’s assessed property value can increase each year. After the first year a homeowner receives a homestead exemption and the assessor values their property, the assessment for each subsequent year cannot increase more than 3% or the percent change in the Consumer Price Index (CPI) — whichever is less.
  • Active duty military and veterans: Honorably discharged ex-servicemembers who are disabled to a degree of 10% or more can receive a $5,000 reduction in their property’s assessed value. Veterans with a service-related total and permanent disability, as well as those who use a wheelchair, may be able to receive a total exemption from ad valorem taxes on their homesteads. Those who are 65 or older may also be eligible for a discount on the assessed value of their property. Current and former service members may receive an exemption if they were deployed outside of the U.S. during the previous calendar year.
  • Exemptions for seniors: Florida homeowners age 65 or older may be eligible for an additional $50,000 homestead exemption on their permanent resident if their income falls below certain income limitations, or a total exemption if the value of their home is less than $250,000 and their income is below the limit. Each county or municipality decides whether to adopt these exemptions and sets its income limitations.

Sales tax in Florida

Most states in the U.S., including Florida, charge a statewide sales tax on the sale of products to consumers. Sales taxes typically help states pay for service like schools, roads and emergency response.

The Florida tax rate for general sales tax is 6%, with the following exceptions:

  • 4% on amusement machine receipts
  • 5.5% on the lease or license of commercial real property
  • 6.95% on electricity

Many Florida counties also assess their own sales tax on top of the statewide rate. Sixty-six of Florida’s 67 counties add a discretionary sales surtax to the state’s general sales tax, bringing the combined average state and local sales tax to 7.08%, according to the Tax Foundation. Citrus County is the only one that doesn’t tack a sales surtax onto the statewide sales tax.

Florida combined state and local sales tax by county

County

Tax rate

Alachua 7.00%
Baker 7.00%
Bay 7.00%
Bradford 7.00%
Brevard 7.00%
Broward 7.00%
Calhoun 7.50%
Charlotte 7.00%
Citrus 6.00%
Clay 7.50%
Collier 7.00%
Columbia 7.00%
DeSoto 7.50%
Dixie 7.00%
Duval 7.50%
Escambia 7.50%
Flagler 7.00%
Franklin 7.00%
Gadsden 7.50%
Gilchrist 7.00%
Glades 7.00%
Gulf 7.00%
Hamilton 7.00%
Hardee 7.00%
Hendry 7.00%
Hernando 6.50%
Highlands 7.50%
Hillsborough 7.50%
Holmes 7.50%
Indian River 7.00%
Jackson 7.50%
Jefferson 7.00%
Lafayette 7.00%
Lake 7.00%
Lee 6.50%
Leon 7.50%
Levy 7.00%
Liberty 7.50%
Madison 7.50%
Manatee 7.00%
Marion 7.00%
Martin 6.50%
Miami-Dade 7.00%
Monroe 7.50%
Nassau 7.00%
Okaloosa 7.00%
Okeechobee 7.00%
Orange 6.50%
Osceola 7.50%
Palm Beach 7.00%
Pasco 7.00%
Pinellas 7.00%
Polk 7.00%
Putnam 7.00%
St. Johns 6.50%
St. Lucie 7.00%
Santa Rosa 7.00%
Sarasota 7.00%
Seminole 7.00%
Sumter 7.00%
Suwannee 7.00%
Taylor 7.00%
Union 7.00%
Volusia 6.50%
Wakulla 7.00%
Walton 7.00%
Washington 7.50%

Estate tax in Florida

Florida does not have a state-level estate tax. However, residents may still be subject to the federal estate tax depending on the size of the estate.

Inheritance tax in Florida

Florida does not have a state-level inheritance tax.

Other taxes in Florida

Alcohol and tobacco tax

The federal government and many states impose excise taxes on alcohol and tobacco products to generate additional tax revenue and discourage consumption of these products.

In addition to general sales taxes, Florida taxes alcohol vendors for:

  • Beer: $0.48 per gallon
  • Cider: $0.89 per gallon
  • Wine:
    • $2.25 per gallon under 17.259% alcohol by volume (ABV)
    • $3.00 per gallon 17.259% or more ABV
    • $3.50 per gallon for natural sparkling
  • Liquor:
    • $2.25 per gallon under 17.259% ABV
    • $6.50 per gallon of liquor 17.259% – 55.78% ABV
    • $9.53 per gallon over 55.78% ABV

Florida also imposes an excise tax on the sale of cigarettes at $1.339 per pack and chewing tobacco and snuff at 85% of the wholesale price.

Gas tax

All 50 states and many counties impose a gas tax to help cover road construction and maintenance costs. In Florida, the average gas tax is $0.4229 per gallon, making it the eighth most expensive state in the U.S. for gas taxes.

Use tax

A use tax is a tax on the use or consumption of a taxable product or service on which no sales tax has been paid within the tax jurisdiction. For example, if a Florida resident purchases a car in Delaware (where there is no sales tax), they will need to pay a 6% use tax to the state of Florida when they register the car. They may also need to pay a discretionary surtax to their home county: Every Florida county (other than Citrus County) adds a surtax ranging from 0.5% to 1.5% to the statewide use tax.

Intangible tax

An intangible tax is paid for the privilege of owning, transferring or otherwise benefiting from intangible assets, such as brands or stocks. Florida levies a one-time tax on mortgages or liens on Florida real property.

The nonrecurring intangible tax is due when the mortgage or lien is filed or recorded in Florida. The rate is two mills, meaning it is calculated by multiplying the mortgage amount by 0.002.

Re-employment tax

Re-employment taxes — also known as unemployment taxes in some states — are a type of payroll tax designed to finance the cost of state unemployment benefits.

In Florida, new employers pay a re-employment tax of 2.70% on the first $7,000 of wages paid to each employee in a calendar year. After the employer has reported wages to the Florida Department of Revenue for 10 quarters, it is eligible for an experience rating based on its employment history. The minimum tax rate allowed under state law is 0.10%, and the maximum rate is 5.40%.

FAQs about taxes in Florida

No. Florida does not have a state income tax. However, residents will still have to file and pay federal income taxes if they meet the federal filing requirements.

Florida generally considers people to be residents when their “true, fixed and permanent home and principal establishment is in Florida.” Some of the steps you can take to establish residency include filing a declaration of domicile, qualifying for the homestead exemption and registering to vote in the state.

Florida does not have a personal income tax. The due date for corporate income tax returns is based on the company’s fiscal year-end.

Corporate income tax returns are due the later of:

  • For years ending June 30, the due date is on or before the first day of the fourth month after the end of the tax year. For all other year endings, the due date is on or before the first day of the fifth month following the close of the tax year. As an example, a company with a fiscal year-end of Dec. 31, 2021 would need to file its Florida corporate income tax return by May 1, 2022.
  • The 15th day following the due date, without extension, for the filing of the corporation’s federal income tax return for the taxable year.

The “Find a Financial Advisor” links contained in this article will direct you to webpages devoted to MagnifyMoney Advisor (“MMA”). After completing a brief questionnaire, you will be matched with certain financial advisers who participate in MMA’s referral program, which may or may not include the investment advisers discussed.

Source: https://www.magnifymoney.com/blog/tax/florida-tax-rates/

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