Florida State Taxes: What Residents Need to Know

Florida is one of the most tax-friendly states in the country, particularly for individuals. It has no state income tax, no inheritance tax, and no estate tax. This combination makes it an attractive destination for retirees, high-income earners, and business owners relocating from higher-tax states. But "no income tax" doesn't mean no taxes — here's the full picture.

No Personal Income Tax

Florida has no individual income tax. All income — wages, investment gains, retirement distributions, Social Security, pension payments, business profits — is free from Florida income tax. This is enshrined in the Florida Constitution, making it difficult to change.

Sales Tax

Florida's state sales tax rate is 6%. Counties can add a discretionary sales surtax, typically 0.5% to 1.5%, bringing combined rates in most areas to 7-7.5%. Florida does not tax most groceries or prescription drugs, but most other goods and services are taxable.

Property Tax

Property taxes in Florida are administered at the county level and vary significantly by location. The Save Our Homes amendment limits annual increases in the assessed value of homestead properties to 3% or the CPI (whichever is less), which protects long-term residents from rapidly increasing tax bills as values rise. New buyers don't get the prior owner's capped assessment — you start fresh at market value.

The Homestead Exemption

Florida offers a significant homestead exemption: the first $25,000 of assessed value is exempt from all property taxes, and an additional $25,000 exemption applies to the assessed value between $50,000 and $75,000 for non-school taxes. Combined, this can save homeowners hundreds to thousands of dollars per year.

Establishing Florida Domicile

Former residents of New York, California, and other high-tax states who move to Florida need to take concrete steps to establish Florida domicile. Get a Florida driver's license, register to vote in Florida, update your homestead exemption, update professional registrations and voter registration, and reduce time spent in your former state. High-net-worth individuals should document domicile changes carefully.

No Inheritance or Estate Tax

Florida repealed its state estate tax in 2004 and has no inheritance tax. Large estates are subject only to the federal estate tax, which currently applies only above the federal exemption (over $13 million per person in 2024).