Florida Tax Advantages

While many new arrivals to Florida come for the beaches and balmy temperatures, they are often pleasantly surprised by some of the tax advantages to living in the Sunshine State.

No State Income Tax

If you are moving from a high-income tax bracket in your home state, becoming a Florida resident can provide some immediate financial benefits. Florida is just one of nine states in the U.S. that does not impose an income tax. Moreover, its state constitution expressly prohibits imposing any individual income tax. The net result is higher disposable income and less of a tax bite on an annual basis.

Property Tax Exemptions

Purchasing a home in Florida and declaring it as your primary residence allows you to take advantage of two property tax benefits. First, you can qualify for up to $50,000 in tax exemptions with the Homestead Exemption, which decreases the taxable value of your property. Second, the “Save Our Home” cap helps limit annual increases in the assessed value of a property to 3% or the change in the Consumer Price Index, whichever is lowest.

No Tax on Retirement Benefits

For retirees or those close to retiring, it’s nice to know that Florida doesn’t tax retirement benefits. Exemptions include social security income, pensions, income from part time work, and income from an IRA or 401 (k).

No Estate Tax

While Florida maintained estate taxes before 2005, changes in federal law eliminated this provision. Today, there is no estate or “death tax” charged on the transfer of the estate or any assets of a person who dies.

Business-friendly Climate

Florida attracts businesses of all sizes and maturity levels because of its 5.5 percent corporate tax rate and lack of payroll taxes, among other benefits. For a company that’s just ramping up or a more established business looking to relocate, Florida not only provides an alluring business climate but also maintains a number of universities providing a skilled and educated workforce from which to draw. In addition to no payroll taxes, Florida does not tax limited partnerships or LLCs and also provides favorable exemptions for clean energy operations.

One of Florida’s wonderful secrets is that its tax advantages are not just for older residents – younger tax payers and young families can also benefit from moving to Florida and building a business and life in a sunny business climate.