Florida Living In The Sunshine Tax Free

Florida Living In The Sunshine Tax Free

taxes-by Realtor Kate Smith

Sunshine and tax break, this must be heaven! Yes it is, it’s called #Florida!

We’ve all heard Benjamin Franklin’s old quote that nothing is certain in life but death and taxes.

Cold and snow aren’t the only reason hordes of people want to become Florida residents. Escalating taxes in other states are driving them to the welcoming arms of the low-tax Sunshine State, too. The wealthy have known about Florida living in the sunshine tax free and its tax benefits for decades, it’s about time to bring it to the attention of all looking for a tax break.

Well, that may be especially true for property taxes. No matter where you live in the U.S., if you own real estate you’ll have to pay property taxes. However, some states have much higher property taxes than others. The nonprofit Tax Foundation has used Census data over a three year period to find the states with the highest and lowest property taxes.

Florida is undeniably very attractive from a tax standpoint. In terms of having a favorable tax climate, it ranks first in the nation for individual income tax; sixth for unemployment insurance tax, 13th for corporate tax; 16th for property tax and 18th for sales tax, according to the Tax Foundation’s 2014 State Business Tax Climate Index.

Overall, Florida ranks fifth as the best state to live and do business from a tax standpoint, the foundation found, after Wyoming, South Dakota, Nevada and Alaska. Despite the risk of an audit, or worse, a greater number of wealthier people than ever before, are trying to establish residency in Florida because of its indisputable tax benefits.

Conversely, the foundation found the heaviest tax burdens are generally in northern states, including New York, New Jersey, Rhode Island, Vermont and Connecticut, and Maryland, as well as some Midwestern ones like Minnesota and Wisconsin.

That’s led to some high-profile defections, including the well-publicized departure of billionaire philanthropist and Paychex founder Tom Golisano, who moved to Florida from New York in 2009. He now lives in Naples. The move saved him $5 million a year in taxes, (he wrote at the time in an essay in the Niagara Falls Reporter about why he made the move), not to mention that the dollar in Florida buys a lot bigger and more luxurious home than in NY. “I love New York,” he wrote. “But how much should it cost to call New York home?”

The IRS isn’t the only one who wants a piece of your paycheck – 41 states have a broad-based individual income tax. Only seven states lack an income tax altogether. They are:

• Alaska
• Florida
• Nevada
• South Dakota
• Texas
• Washington
• Wyoming

Note: Two states have a limited income tax on individuals. These states tax only dividend and interest income:

• Tennessee
• New Hampshire

Will I Pay Less Taxes Overall in These States?

Not necessarily. States need revenue to function, and these states will have to make up for the lack of income tax somehow. New Hampshire and Texas, for example, make up for it in property taxes. Both states have some of the highest property taxes in the nation. The cost of higher property taxes, sales taxes, fuel taxes, and other taxes could amount to higher overall taxes in some of these states.

Best States for Property Taxes

1. Louisiana – 0.18%
2. Hawaii – 0.26%
3. Alabama – 0.33%
4. Delaware – 0.43%
5. West Virginia – 0.49%
6. South Carolina – 0.50%
7. Arkansas – 0.52%
8. Mississippi – 0.52%
9. New Mexico – 0.55%
10. Wyoming – 0.58%

Worst States for Property Taxes (Compare to Florida, WHICH IS ABOUT 1.1%:)

1. New Jersey – 1.89%
2. New Hampshire – 1.86%
3. Texas – 1.81%
4. Wisconsin – 1.76%
5. Nebraska – 1.70%
6. Illinois – 1.73%
7. Connecticut – 1.63%
8. Michigan – 1.62%
9. Vermont – 1.59%
10. North Dakota – 1.42%

If you are contemplating such lifestyle: tax free and sunshine, your answer is: Florida Living: In The Sunshine Tax Free!

Copyright © 2012 | Kate Smith, LLC | Information deemed reliable, but not guaranteed |