In general, Florida residents benefit from a
very tax-friendly jurisdiction. There is no state
income tax. There are frequent tax holidays and
refunds. There is no state estate tax. And a few
years ago, Florida passed a "Save our Homesteads"
law capping annual increases in property values
for real property taxes at the lesser of 3% or the
CPI. (See Article VII, ?4(c) of the Florida
Constitution.)
And now, there is no intangible personal
property tax either.
The repeal of the Florida Intangible Tax seems
a natural step in the progression of Florida's
favorable tax policy. Florida obviously wants to
be considered a tax-favorable haven for its
residents and wants to attract new residents.
Florida uses the tax-favored status to lure both
retirees and working people. For example, Governor
Bush has touted the tax-favored status of Florida
in his efforts to recruit new businesses to
Florida. Thus, the repeal of the intangible tax
fits in the Governor's mission of an inexorable
march toward tax freedom.
Now, when coupled with the lack of an income
tax and the lack of an estate tax, Florida looks
even more favorable as a residence when compared
to the places many of its residents are moving
from the northeast and the mid-west.
In states like New York, New Jersey and
Massachusetts, for example, it is compelling for
residents to shift to Florida to avoid the
compound effect of paying 5-10% + in annual income
taxes and 10%+ (16% even) in state estate taxes.
Also, given the meteoric rise in many Florida
property values, the move to become a Florida
resident has also been pushed by the Save Our
Homes cap on real property taxes. Many of our
non-Florida clients have decided they need to
become Florida residents just to stem their
ever-growing real property taxes.
Repeal becomes effective Jan 1, 2007, so you
still must plan for 2006 taxes.
If you have any questions on this or any other
tax matter, please do not hesitate to call our
office. We will be more than happy to answer all
your questions.
