If you're thinking about moving/retiring to Florida, you find far more benefits here than just our sunny weather.
Successful retirement means successful financial planning. When choosing a place to retire, it makes sense to choose somewhere that won’t extract precious dollars through heavy taxation. While Florida does not impose personal income, gift taxes, inheritance or intangible personal property taxes, it does require residents to pay fuel tax, property tax and sales tax. Overall, TopRetirements.com lists Florida’s total state/local tax burden as one of the lowest of any state, giving it a ranking of 47th in the entire country.
Personal Income Tax
Forty-one states tax personal income. Florida isn’t one of them, being included instead with the seven states that refrain from imposing income tax. This means retirees do not have to file an annual intangible personal property state tax return reporting their mutual funds, money market funds, stocks, bonds, unsecured notes and shares of business trusts.
The sales tax rate in Florida is 6 percent. This is lower than California, Indiana, Mississippi, New Jersey, Rhode Island, Tennessee, Minnesota, Nevada, Arizona, Washington, Kansas, Texas and Illinois. Some counties within Florida impose a discretionary sales surtax in addition to the 6 percent state tax. Prescription and nonprescription drugs and groceries are exempt from sales tax.
All property in Florida is taxable at 100 percent of its valuation, though a homestead exception of $50,000 is available for a permanent residence. Some Floridian city or county governments allow an additional homestead exemption of up to $50,000. To qualify, the taxpayer must be at least 65 years old, legally able to make the property a permanent residence and submit a statement of income and meet the income limit. Other exemptions and discounts relevant to retirees include a widows and widowers reduction of $500, and a reduction for the disabled of $500. Disabled ex-service members can receive a reduction of up to $5,000.
Inheritance and Estate Tax
Florida does not impose inheritance tax, which requires the recipient of a deceased person’s property to pay money to the state. Before 2005, estate tax was due when the estate's gross value was above the minimum federal estate tax filing threshold. After 2005, the state ceased to impose estate tax, although the personal representative of an estate might still need to complete certain forms.