Florida Tax System
Although Florida has no income tax, intangibles tax, gift tax, estate tax or generation skipping tax, Florida still has a few taxes that new residents need to be aware of.
Sales Tax: Florida has a state sales tax that is 6%. Each county then may impose an additional sales tax from .25% to 2.5% which is computed on the first $5,000 of the purchase price. The $5,000 limit, however, does not apply to certain rentals or services. The sales tax is paid directly to the seller at the time of the purchase.
Use Tax: Florida has a “use” tax which is a tax on certain purchases made outside of the state within 6 months of bringing it into Florida. The tax rate is 6%. Examples of purchases subject to this tax are items bought online or furniture bought in another state. Items that are bought in another state and used there for over 6 months are exempt from the use tax. Further, you do not owe the tax if you paid at least 6% in tax when you purchased the item. However, if you paid less than 6% tax on the item, you will owe the difference to equal 6 percent. Finally, if the tax, once computed, is less than $1.00, you do not have to pay the tax.
Ad Valorem Tax: Also known as property tax. This tax is assessed by the county’s property appraiser and collected on an annual basis. If your property is homesteaded property, you get a $25,000 exemption plus a cap on the assessed value and the amount it can be increased per year. There are additional exemptions for disabled individuals.
Doc stamp tax: When you purchase a piece of real property, you pay a doc stamp tax based either upon the amount paid for the property or the mortgage on the property. Most documents that are recorded with the Clerk of the Court require the doc stamp tax to be paid. This tax is paid usually to the Clerk of Courts office.
There are other taxes such as the registration fees you pay for your motor vehicle, fuel taxes, hotel taxes and the list goes on and on. To find out more information about the taxes that Florida residents must pay, please contact a tax professional with knowledge of the Florida tax system.
