Florida Retirement Buzz

Effective January 1, 2007, the repeal of Florida’s Intangible Personal Property Tax will take effect. The Florida Intangible Personal Property Tax is an annual tax based on the fair market value of intangible personal property. In general, intangible personal property includes stocks, mutual funds, bond and notes receivable. The intangible personal property tax is imposed on Florida residents and corporations, partnerships, fiduciaries, and others that have a Florida taxable status.

The current intangible tax rate is fifty cents per one thousand dollars of taxable intangible personal property. This would amount to $500 per one million dollars of taxable intangible personal property. A Florida resident can exempt $250,000 (or $500,000 for a married couple) of taxable intangible personal property from the tax. This tax was avoided by many in the past by creating an irrevocable trust to hold the Florida resident’s taxable intangible personal property. With repeal, these types of trusts will no longer be needed. Governor Bush estimated that the repeal of the tax would save approximately 300,000 taxpayers more than $131,000,000 next year.

What is remarkable about this development is that a government is actually repealing a tax on its citizens. How often have you seen that happen? This says something about the governance mindset extant in the state of Florida. This is also reflected in the fact that the Florida Constitution prohibits the imposition of a personal income tax! How’s that for an added incentive to retire to Florida.