With state income tax rates continuously creeping up, many of our clients are considering a new state of residence. One increasingly popular "tax destination" is Florida. Forget about the nice weather, Florida has no state income tax! Florida has no estate tax! Florida residents receive preferential treatment on their residential real estate taxes as a result of the Homestead and Save-Our Home Exemptions! And Florida no longer taxes intangible personal property (stocks, bonds, etc)!
Now the down side: In addition to the occasional hurricane and tornado, Florida law mandates a minimum sales tax rate of 6% and the law also provides for a local option sales tax that lets each county set its own local tax that is collected on top of the general state rate.
Still interested? Here's how to start the process of establishing Florida residency:
- File a sworn statement with the Clerk of Circuit Court in your new Florida county of residence.
- Obtain a Florida driver's license.
- Register to vote in Florida.
- Keep a log or calendar of your whereabouts with as much support as possible.
- Complete new federal and state withholding tax forms with your new address.
And just as important, don't forget to sever ties with your previous state:
- Change your mailing address to the Florida address with your previous state's taxing authorities, banks, employers, vendors, etc.
- Notify the MVA in your old state of your address change (which should flow to the board of elections).
- Spend less than the statutory minimum number of days in your old state (varies by state).
Additional criteria used to determine a person's domicile include home, time, items near and dear, active business involvement and family connections.
If changing state residency for tax purposes or for any other reason is in your future, please contact us for specific steps that need to be taken to establish residency in your new state of choice.