Florida is consistently ranked by Kiplinger.com as one of the Top Ten most tax-friendly states for retirees.
Let's take a closer look at the reasons why.
Florida State Sales Tax
Florida has a reasonable state sales tax of 6%. It's also important to note that food (with the exception of food to be eaten immediately like in a restaurant), prescription drugs, and non-prescription drugs are exempt from sales tax.
However, some county taxes can drive the total sales tax rate up to 7.5%.
Florida State Income Tax
There is no state income tax. This is one of the main reasons Florida is considered so tax-friendly, not just for retirees, but for all residents.
The fact that there's no state income tax is one of the main reasons why Tony Robbins moved to Florida from California, and so many other high income earners are following suit.
Florida Property Taxes
According to the Tax Foundation, the median property tax on Florida's median home value of $153,300 is $1,623.
Florida achieves this low property tax rate primarily through the use of homestead exemptions.
As Kiplinger explains:
“Every person who owns and resides on property in Florida on January 1 and makes the property his or her permanent residence is eligible to receive a homestead exemption up to $50,000. The first $25,000 applies to all property taxes, including school district taxes. The rest of the exemption, up to $25,000, applies to the assessed value between $50,000 and $75,000, and only to non-school taxes.”
There are also other possible exemptions for the legally blind, widows and widowers, and more.
For more information visit Kiplinger.com’s State-by-State Guide to Taxes on Retirees.