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Saving on State Income Tax by moving to Florida

It’s annoying enough having to pay federal income taxes. Paying extra income tax to the state is even more disturbing. If you live in California, Oregon, Minnesota or New York, you’ll pay some of the steepest income taxes in the nation.

The cat-and-mouse game among state tax authorities and wealthy New Yorkers who are moving to Florida has reached new levels — and gone high tech. New federal tax laws restricting the deduction of state and local income taxes have generated reasons for wealthy New Yorkers to move to Florida or other lower-tax states.

Moving to a tax-free state permits you to save your money and increase your revenues. Here are the main advantages of moving to Florida instead of any other tax-free state.

    No Individual Income Tax

Florida is one of only seven states that don't collect a personal income tax. Moving to Florida from a state like New York can save someone in a high-income tax bracket many thousands of dollars in taxes. This prohibition on collecting an individual income tax is part of the Florida Constitution, so Florida won't be requiring a state individual income tax anytime soon. A legal amendment would be required to change this provision.

    No Death Tax

Florida’s constitution also prevents the imposition of a state death tax. Moving to Florida from a state like Massachusetts or New York could save a family significant money when a loved one dies.

    Asset Protection Benefits

A Florida Asset Protection Trust has made asset security for state residents available and has become one of the top estate-planning tools.  The assurance trusts one of the best ways to protect assets in Florida from future lenders and gives many other benefits.

    Florida Tax Benefits: Business

Like its real climate, Florida's tax climate is extremely welcoming to businesses. Here's just a sampling of the business-related taxes you won't have to pay in the panhandle: corporate income tax on confined partnerships or subchapter S-corporations, corporate franchise tax on capital stock, property tax on business inventories or goods-in-transit (for up to 180 days on the latter), sales tax on the acquisition of raw materials for use in a product meant for resale or sales or use tax on the co-generation of electricity.

As a state all too common with rising sea levels, Florida also offers a group of environmentally minded exceptions. These include exemptions for the use of electricity or steam used in production, natural gases used to produce electricity and solar energy systems.

Becoming a Florida resident is not complex or complicated. It's just a matter of taking some necessary steps. The most difficult part will be cutting ties to your previous state of residence to convince that state's tax department that you're no longer living there and therefore can't be taxed there.

  

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