An Overview of Taxes in Florida
Sizing up Florida State Tax Rates
Florida's state tax burden has consistently ranked among the nation's lowest for decades, according to the Tax Foundation, a non-profit and non-partisan educational and research organization that's been analyzing such issues since 1937. Florida doesn't have a personal income tax, although it does impose sales and property taxes.
Florida Property Tax
The Florida constitution reserves all revenue from property taxes for local governments -- the state itself doesn't use any of this money. Property taxes are based on the "just value" or market value of properties, assessed by a local appraiser on Jan. 1 of each year. Increases in value are limited to 3 percent of the previous year's assessment or the Consumer Price Index (CPI), whichever is less. This limitation is known as the "Save Our Homes" cap.
Taxes are based on millage rates set by local governments, with 10 mills being equal to 1 percent. The millage rate is multiplied by the value of the property to determine the dollar amount of property tax. County, city, and school districts are permitted to levy taxes at up to 10 mills each. Special districts, such as water management, can levy additional taxes, usually at under 2 mills.
Property Tax Exemptions
Florida offers several property tax exemptions that can help reduce your tax bill if you qualify for any of them. They include a homestead exemption of up to $50,000, exemptions for senior citizens over age 65, and exemptions for veterans and the disabled.
Florida is one of only seven states that have no personal income tax. The state tax on intangible assets such as stocks, bonds, and mutual funds was repealed in 2007 so this type of property is no longer taxed. Florida does impose a 5.5 percent corporate income tax.
Florida Estate and Inheritance Taxes
There are no "death taxes" in Florida, either on the value of estates or on gifts received by beneficiaries. The Florida estate tax was repealed effective Dec. 31, 2004.
Other Florida State Taxes
Florida state taxes apply to several other types of purchases:
- The document stamp tax: A tax of 70 cents per $100 of value is assessed on documents that transfer interest in Florida real estate, such as warranty deeds and quit claim deeds. A tax is also levied on notes, bonds, mortgages, liens and other written obligations to pay that are filed or recorded in Florida. The rate for these types of contracts is 35 cents per $100 of value. Counties are permitted to add additional fees.
- Sales tax: Florida charges a sales tax of 6 percent. Food, prescription drugs, and non-prescription drugs are exempt from taxation. Counties can charge their own additional sales taxes, bringing the tax rate up to 9.5 percent in some areas. Of Florida's 67 counties, 55 charge an additional sales tax.
- Gas tax: The Florida gas tax is 34.4 cents a gallon for unleaded and 29.6 cents a gallon for diesel fuel.
- Cigarette tax: Florida charges a $1.34 tax on each pack of 20 cigarettes. There is also a surcharge for other tobacco products, excluding cigars, equal to 60 percent of the wholesale price.
- Hotel taxes: Rates vary by county and range from 2 to 6 percent. These taxes are known as the Tourist Development Tax and are charged on hotel rooms in addition to the regular sales tax rate.
On the bright side, you can buy a flag in Florida--either the U.S. flag or that of the state--without paying any tax at all.