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Taking Advantage Of Florida’s Favorable Tax Laws

It’s no coincidence that many tax professionals, financial planners and estate planning attorneys make their homes in Florida. The Sunshine State is a haven from many taxes and has one of the lowest overall tax rates in the country.

Which is not to say Floridians don’t have tax problems or can’t benefit from targeted tax strategies. At Goldburd McCone LLP, we counsel clients statewide from our tax law office in Hollywood, Florida. We help individuals and businesses reduce their tax burdens and resolve tax controversies.

The Only Thing Better Than Low Taxes…

No income tax: Florida is one of seven states with no individual income tax. That’s a big draw, especially for retirees who do not have to pay state taxes on their Social Security benefits and other revenue streams.

No death tax: Florida has no estate tax, and heirs do not pay an inheritance tax. (The federal estate tax was phased out in 2010 for all but the wealthiest Americans.)

Where Florida Gets Its Tax Revenue

A thumbnail of taxes that Florida residents and businesses do pay:

• Property taxes: The state of Florida derives one-third of its revenue from property taxes. Two key provisions help keep a lid on this burden: First, up to $50,000 of the taxable value can be exempted, and second, increases in valuation are capped at 3% per year or the Consumer Price Index amount, whichever is lower.

Some “snowbirds” get into trouble for claiming Florida as their homestead if they winter here for less than half the year or rent out their Florida home during the summer. Living in Florida for “six months and a day” satisfies the residency rule.

NOTE: People who recently moved to Florida from high-tax states (such as New York) may face residency audits to prove they are in fact domiciled in Florida and not just dodging income taxes. Our attorneys provide representation in state and IRS tax audits, including residency-based audits. We also counsel our New York, New Jersey and Connecticut clients on residency compliance before relocating to Florida or other low-tax states.

• Sales taxes: Sales and use taxes account for 38% of Florida’s tax revenue. Florida’s 6% state sales tax is the sixth-highest in the country. County or city surtaxes bump up the tax on purchases to as much as 7.5%.

Florida sales and usage taxes apply to tangible personal property, services, electricity (6.95%), vending and amusement machines, commercial rent and transient residential rent (motels, timeshares, RV parks, etc.). Food, prescription drugs and over-the-counter drugs are exempted.

• State corporate taxes: Florida’s corporate income tax is a flat rate (no brackets or exemptions) of 4.458%, among the lowest in the United States. Florida is also a mecca for pass-through entities such as LLCs, partnerships and S corporations, as the individuals do not pay state taxes on that income.

• Gas tax: At 42 cents per gallon in 2020, Florida has the eighth-highest surcharge on gasoline.

• Tobacco taxes: The state of Florida levies $1.34 per pack of cigarettes and an 85% excise tax and surtax on cigars and tobacco.

Helping Floridians Reduce Taxes Or Challenge Tax Debts

We represent individuals and corporate clients in all facets of tax law, including IRS and Florida Department of Revenue audits, resolution of tax disputes, property tax appeals and abatements, advice to nonprofit/tax-exempt organizations, tax structuring and tax fraud defense. Our tax attorneys provide sophisticated tax counsel to companies based in Florida or operating in Florida, from payroll, corporate income and usage taxes to taxation on real estate transactions, condominiums and rental properties.

Goldburd McCone LLP is recognized as a leader in the field, not only for our attorneys’ tax expertise but for our attentive and responsive service as well. To schedule a consultation with one of our lawyers, call our Florida tax office at 754-465-0728 or connect with us by email.