If you buy a home in Florida, you not only enjoy the sunshine and the beaches, you’ll also enjoy the money that you save from not paying taxes that are normally paid by residents of other states.
Florida has been known as among the friendliest states when it comes to taxes. The following tax policies in Florida explain why:
1. No state income tax in Florida
Florida is one of the nine states that don’t collect income tax. Actually, one of seven states, as two of the states in the income-tax-free list, Tennessee and New Hampshire, collect taxes on dividend and interest incomes. The others, which are just like Florida, are Alaska, Washington State, Nevada, Texas, South Dakota and Wyoming.
2. Lighter state-local tax burden in Florida
According to the national tax experts bbb statements, Florida residents have much lighter state and local tax burdens than residents of most other states. Florida has been in the lowest portions of charts of state and local tax burdens of the 50 U.S. states over the years, based on studies conducted by the Tax Foundation. In 2009, Florida was 31st, with the per capita tax paid amounting to $3,897, lower by 6.3 percent than the U.S. average per capita tax paid, which was $4,160.
Florida’s state-local tax burden in 2009 was also nearly half that of New Jersey, the state with the highest level of state and local tax burden. Florida’s per capita tax is lower by 42.3 percent than the $6,751 per capita tax paid in New Jersey,
Over the period from 1977 when the Tax Foundation started publishing its state and local tax burden estimates, Florida had its lowest state-local tax burden compared to other states’ burdens in 1982, when it was 44th in the chart. Its ranking on the charts did not go up past the 40th for 19 annual rankings.
3. Tax Freedom Day comes to Florida earlier
In 2010, Tax Freedom Day, the time of the year when a taxpayer has been estimated to have worked for all his federal, state and local taxes, has been estimated by the Tax Foundation to come to Florida earlier than 30 other states. Florida’s Tax Freedom Day occurred on April 5 last year, 22 days before that of Connecticut, which was April 27.
Florida taxpayers need 95 days of paid work to be able to pay all their taxes, 22 days lower than that of Connecticut, whose residents need 117 days. New Jersey was second with 115 days.
4. Homestead and other residential property tax exemptions in Florida
The state of Florida offers homestead and a host of other residential real estate tax exemptions to homeowners. The homestead exemption offers up to $50,000 in tax deductions. The other exemptions are those for widows, widowers, veterans, handicapped persons, seniors and homeowners providing accommodations for their parents or grandparents.
Find the best affordable homes in tax-friendly Tampa, Florida.