For Professional Tax Guidance contact your Certified General Accountant …. below is a laymens helpful guide…
Florida Residents enjoy some of the lightest tax burdens in the country. Florida residents do not pay personal income tax, inheritance tax, or gift taxes. These tax breaks by themselves bring many people from higher tax states to Florida every year.
You are considered a Florida resident when your primary residence is in Florida. Filing a declaration of domicile, registering to vote, or qualifying for homestead exemption in Florida can establish residency. Obtaining a Florida driver license does not establish residency, it only indicates an intent to establish residency.
Real Estate Transfer Taxes
Documentary stamp tax (also know as Doc Stamps) is levied on documents that transfer interest in Florida real estate. This tax is paid to the Clerk of Court at the time the deed is recorded. This tax is typically paid by the property owner at closing and is based upon the SALE PRICE of the property. The tax rate is $0.70 (seventy cents) per $100 of value. For example, a seller would pay $1,750 in Documentary Stamp Taxes for a home that they sold for $250,000.
Documentary stamp tax is also levied on the amount of the mortgage. This tax is typically paid by the BUYER at closing. The tax rate is $0.35 (thirty-five cents) per $100 of mortgage. For example, a buyer who is purchasing a home for $250,000, and who is financing $200,000 of the purchase, would pay $700 in Documentary Stamp Taxes.
Tourist Tax on Rentals Properties for less than 6 months and 1 day stay.
Sarasota Tourist Tax: 13%
Manatees Tourist Tax: 13%
Sales Tax; Florida’s sales tax rate is 6 percent. Each retail sale, storage fee, admission charge, use charge, or rental is taxable, along with some services. There are some items that are specifically exempt. Some counties impose a sales surtax in addition to the 6 percent state tax. The county tax rates range from .25 to 2.5 percent. These taxes are only levied on the first $5,000 of the purchase price. This $5,000 limit does not apply to services or commercial rentals. Consumers must pay all sales taxes to the seller at the time of purchase.
Here are the sales tax rates of Sarasota-Area Counties:
Manatee County…….. 6.5%
Sarasota County…….. 7 %
Charlotte County……. 7 %
Hillsborough County…. 7 %
Pinellas County……… 7%
Use Tax; Unless specifically exempt, items purchased out of state is subject to a 6% tax when brought into Florida within 6 months of the purchase date. Examples of taxable purchases include purchases made by mail order or the Internet. Items purchased and used in another state for 6 months or longer are not subject to use tax when the items are later brought into Florida.
No use tax is due if the out-of-state merchant charged sales tax of 6 percent or more. If the merchant charged less than 6 percent, you must pay the difference to equal 6 percent.
Ad Valorem (Property) Tax; If you purchase real estate in Florida, you will pay ad valorem or “property” tax based on the taxable value of the property. Ad valorem taxes are assessed by each county’s property appraiser and collected annually by the county’s tax collector’s office. The property tax is NOT BASED ON THE PURCHASE PRICE.
A homestead exemption on assessed value is available to homeowners who meet certain requirements. On average, a homestead exemption reduces the property taxes by $600 to $700 per year. Having a homestead also “freezes” the taxes on a property for as long as the homeowner maintains the exemption (which renews automatically each year). State law prohibits property assessments from increasing more than 3% per year for properties protected by a homestead. Properties not homesteaded are capped at 10% per year.
Certain exemptions are also available to blind persons and other physically challenged residents.
For more Sarasota information on Florida’s Homestead Exemption, CLICK HERE.
To apply for a Manatee HOMESTEAD EXEMPTION, CLICK HERE
Motor Vehicle Registration and Taxes
Florida’s 6 percent use tax is also due on motor vehicles brought into this state within 6 months from the date of purchase. Use tax does not apply if a like tax equal to or greater than 6 percent has been paid to another state. To qualify for exemption from use tax on motor vehicles, you must provide documents to prove that the vehicle was used outside Florida for at least 6 months.
The full amount of use tax (6 percent) applies and is due on any motor vehicle imported from a foreign country into Florida, regardless of when it was purchased or if any taxes were already paid on the vehicle in another country. The tax is calculated on the value of the vehicle when it was brought into Florida, not on its original sales price.
Other Taxes and Fees
The State of Florida does not impose personal income, inheritance, or gift taxes. There are some other taxes and fees that Florida residents may be required to pay, such as: convention development tax, communications services tax, local option tourist tax, fuel, gross receipts tax, tire fee, lead-acid battery fee, Lemon Law fee, or rental car surcharge.