No Snow. No State Income Tax. No Problem.
Saunders Blog February 2, 2016
Last week we saw a set of statistics
that adds an interesting perspective to Florida’s explosive new
In 1910, New York had 43 seats in the U.S. House of Representatives
while Florida had four. Today both states have 27 representatives in the
House, with Florida having recently moved past New York to become the
third most populous state in the country.
After overtaking New York, and with more than 1,000 new residents moving
here each day, Florida has since surpassed the 20 million population
Why so many people choose to live full- or part-time in Florida will
scarcely shock anyone who watched as 25 to 40 inches of snow fell on the
D.C.-Philadelphia-New York metro corridor a few weekends ago. Ask any
Florida transplant what first caused them to seriously consider
relocating here and you will undoubtedly hear: To escape the ice, cold
Probe deeper though—especially now that tax season is officially
here—and you’ll likely uncover another big reason why so many people
happily relocate to Florida: Low taxation.
Like winter, tax season in the Sunshine State is a very benign affair.
For one thing, Florida does not burden its residents with a state income
tax and has safeguarded this hands-off policy in the state’s
constitution. As such, it is consistently ranked number one for its
individual income tax structure by the non-partisan, not-for-profit Tax
Additionally, Florida does not collect a state inheritance (or estate)
tax above the federal estate tax; and protects its residents from losing
their homes to creditors other than their mortgage holders.
While on the subject of homes, Florida homeowners are now
constitutionally protected against the sort of runaway property
appreciation that occurred in many U.S. markets during the housing boom.
The “Save our Home Act,” as amended by Florida voters in 2008, provides
for an increased homestead exemption on a primary residence. Previously
capped at $25,000, the assessed value of a property for tax purposes now
has an exemption from the first $50,000 of taxable value—for all taxing
bodies except the local school district—and a $25,000 exemption on
taxable value for the school district. Moreover, once the property is
officially homesteaded, its assessed value for tax purposes cannot
increase more than 3% or the Consumer Price Index (CPI), whichever is
less. It is also worth noting that if the property is not your primary
residence, its assessed value for tax purposes is limited to 10% each
(Important note: If you plan to make your Florida home your primary
residence in 2016 you must file for a homestead exemption by no later
than March 1.)
The Tax Foundation analyzes each state’s tax code in several additional
categories; with Florida landing in fourth place overall. Only Wyoming,
South Dakota and Alaska offer a friendlier tax climate, if not the
friendliest of winter climates.
As it turns out, escaping winter’s annual assault is only one reason why
people are moving to Southwest Florida in record numbers. Our undisputed
reputation as Florida’s cultural capital is another major draw. Still
another is the incredible assortment of recreational opportunities for
people of all ages, interests and abilities. Plus, if you are seriously
considering moving yourself, a business—or both—to Florida for any of
these reasons, don’t forget that you won’t face a blizzard of taxes