More and more, people are discovering that declaring domicile in Florida has many different benefits. For instance, Florida is an extremely tax-friendly state. It’s one of just a few states in the country with no state income tax, which could save the average tax payer some 10 percent of his or her annual salary each year.
Additionally, Florida has no estate or gift taxes, meaning that you’re better able to protect the assets you’ve worked so hard for Virtual Tax Services . And once you pass away, your surviving family members will be better protected, too.
So, Florida sounds like a virtual tax haven. And it is – but that doesn’t mean there are no taxes in the state. The following is a run-down of the taxes you will still see once making Florida your home:
Sales Tax: In Florida, every sale, admission charge, storage fee or rental is taxable, as well as some other services (although there are a few exemptions). At about 6 percent, the Florida sales tax rate is slightly higher than that of most other states, which average just less than 5 percent.
Discretionary Sales Tax: In addition to its normal sales tax, most counties within Florida also have Florida county sales tax called a discretionary sales tax, which ranges from 0.25 to 1 percent and applies to most sales, including motor vehicles and other large purchases. The tax rate is based on the county in which the said goods are delivered.
Before you groan, it’s important to note that there is a saving grace: only the first $5,000 of a single sale of tangible personal property is subject to the Florida county sales tax or discretionary sales tax. Want to spend more? Be our guest! There are a few exceptions, such as leases, rentals, storage fees, service warranties, etc.
Use Tax: A use tax can be made on large-scale purchases made outside of Florida (such as computers, furniture and automobiles) that are brought into the state within six months of purchase. Basically, this helps Florida protect itself from having all of its residents make purchases outside the state to avoid the state sales tax. To pay the tax, you need to complete an out-of-state purchase return form (available on the Florida Department of Revenue website). If you already paid taxes in another state (and they were lower than those you would have paid in Florida), you’ll only need to pay the difference between the two. A credit is not recognized for taxes you may have paid in another country. Enquire for specific details if that situation applies to you.
Rent Tax: So, we said there’s no income tax on money you make from renting out your home or other property. However, there is a rent tax, charged at 6 percent, for Florida residents who rent their home, condo or other property for more than six months in any given year. (If renting the property as a business, the owner may pass the 6 percent fee on to his or her tenant.)
Real Property Tax: Like most states, Florida residents pay property taxes on their homes or other real estate properties. The rate is determined by county, and the value is assessed January 1 each year by the county appraiser. And, as noted above, the amount that the property tax can be raised each year is limited by the Save Our Homes Amendment, so there will never be any surprises.
Documentary Stamp Tax: In Florida, a documentary stamp tax is made on things like warranty deeds, promissory notes, mortgages, and other documents that transfer interest in Florida property (or other promises to pay money). The tax is one of the main components of Florida closing costs when purchasing a home in the state (generally 70 cents per $100), so it’s a good thing to keep in mind.