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Florida State Tax Guide: What You’ll Pay in 2023

En español | Whether you’re already living in the Sunshine State or considering a move there, here’s what you should know about state taxes in Florida. It’s among the lowest tax states in the nation, according to the Tax Foundation. 

The big picture:

  • Income tax: 0 percent
    There is no personal income tax at the state or local level in Florida. 
  • Property tax: 0.98 percent of a home’s assessed value (average)
    Real estate taxes vary widely by county across Florida, with an average tax rate of 0.98 percent of a home’s assessed value in 2021, according to the Tax Foundation. 
  • Sales tax: 7.02 percent (average combined state and local)
    The state sales and use tax rate is 6 percent, although some goods and services are exempt, such as groceries and prescription medicine. Counties are allowed to add a discretionary sales surtax, ranging from 0.5 percent to 1.5 percent. The average local sales tax rate is 1.02 percent, bringing the state’s average sales tax up to 7.02 percent.

How is income taxed in Florida?

Florida does not have a personal income tax.

Watch the video below to learn how to identify your 2022 federal income tax brackets.

Understanding Your 2022 Federal Income Tax

Are pensions or retirement income taxed in Florida?

No. Because Florida does not have a personal income tax, distributions from pensions, 401(k)s, 403(b)s and IRAs are not taxed at the state or local level. Nor is military retirement pay.

AARP's retirement calculator can help you determine if you are saving enough to retire when — and how — you want.

What about investment income?

Capital gains from investments and dividends are not taxed at the state and local level, another by-product of Florida not having a personal income tax.

Does Florida tax Social Security benefits?

No, but you may pay federal taxes on a portion of your Social Security benefits, depending on your income. Up to 50 percent of your benefits will be taxed if you file an individual tax return and make between $25,000 and $34,000 in total income — or if you file jointly and as a couple make $32,000 to $44,000 in total income. And up to 85 percent of your benefits will be taxed by the federal government if your total income is more than $34,000 individually or $44,000 as a couple.

AARP's Social Security calculator can assist you in determining when to claim and how to maximize your Social Security benefits.

How is property taxed in Florida?

Property tax in Florida is a county tax that’s based on the assessed value of your home. Homes are appraised for market value as of Jan. 1 each year. The average tax rate is 0.98 percent of the assessed value of your home, but property taxes vary widely across the state.

Residents may be eligible for a property tax break of up to $50,000 on their permanent home through Florida’s homestead exemption. If you’re 65 or older, you may qualify for an additional exemption of up to $50,000. Further discounts are offered for eligible widows, widowers and veterans 65 and older.

The Save Our Homes program limits assessments at the lesser of 3 percent or the percent change in the Consumer Price Index, offering another break on property taxes. 

Learn about property taxes in your local area on the Florida Department of Revenue website. You can learn about contesting the value of your property on the revenue department’s website.

In December 2022, Florida passed a measure allowing a property tax refund for residents who could not live in their home for at least 30 days because of damage from hurricanes Ian or Nicole. The refund is based on how many days the home was uninhabitable. Affected homeowners must apply for the rebate with their local county property appraiser between Jan. 1 and April 1, 2023.

What about sales tax and other taxes?

  • Sales and use tax: There’s a 6 percent tax on many, but not all, consumer goods and services. Counties may add a surtax of as much as 1.5 percent; a few counties do not levy the surtax. There is a $5,000 limit on the local surtax, in many cases, including on vehicles, boats, aircraft and mobile homes. The average combined rate is 7.02 percent, according to the Tax Foundation. Find your local tax rate at the state Department of Revenue website.
  • Florida doesn’t tax most groceries, although some food prepared and sold for immediate consumption, such as sandwiches, is taxable. Prescription and nonprescription drugs are not taxed, and neither are medical equipment and most over-the-counter medical items; however, contact lens solution is taxable. Clothing is taxed. A list of nontaxable items is on the Florida Department of Revenue’s website.
  • Florida’s use tax applies to items purchased out of state when brought into Florida within six months of the purchase date. Examples include items bought online and furniture delivered from another state. No use tax is due if sales tax of 6 percent or more was paid to the out-of-state seller.
  • Gas and diesel: The state gas tax is adjusted annually. As of Jan. 1, 2023, Florida’s gas tax is 0.35225, a 0.018 cents a gallon increase from 2022. The tax rates also vary by county.

  • Alcohol: Beer is taxed at $0.48 per gallon. Wine is taxed at $2.25 to $3.50 per gallon, depending on the percentage of alcohol and whether it is sparkling wine. Liquor is taxed at $2.25 to $9.53 per gallon, depending on the percentage of alcohol. The purchase of beer, wine and liquor is also subject to Florida’s general sales tax, plus any additional surtax imposed by the county.

  • Commuter tax: Florida does not have a commuter tax. In 2023, commuters will receive a 50 percent discount on tolls if their electronic-based transponder is used at least 35 times during a month.
  •  Lottery winnings: There’s no state tax on lottery winnings, but you’ll still owe federal income tax on your prize money. Find more information on the Florida Lottery website.

Will I or my heirs have to pay inheritance and estate tax in Florida?

There is no inheritance or estate tax in Florida.

If there’s no surviving spouse or joint tenant, the deceased’s property will stop receiving the homestead exemption the year following the owner’s death. But if the homeowner was married, the surviving spouse will continue receiving the homestead exemption for as long as the spouse owns the property as his or her permanent residence. The same rule applies to a joint tenant owner with rights of survivorship who meets certain criteria.

Are there any tax breaks for older Florida residents?

Residents 65 or older may be eligible for a property tax break with an additional homestead exemption set by a local government. Visit this web page to view county-specific info about property tax assessments and exemptions. Veterans 65 or older who are partially or totally permanently disabled may receive an additional homestead property discount. Widows and widowers can receive a $5,000 property tax exemption starting in 2023. 

The Save Our Homes assessment limitation caps assessments at 3 percent, or the percent change in the Consumer Price Index, whichever is less. The limit applies after the first year a home receives a homestead exemption with the property assessed at just value.

Can I qualify for Florida’s tax benefits and breaks as a part-time resident?

If you split your time between Florida and another state that has a personal income tax, that other state’s tax laws would determine whether you are a resident there who must pay personal income tax. You may be required to live in Florida at least 183 days, or one day more than six months, to be considered a Florida resident and escape paying income tax in the other state.  

To qualify for Florida’s homestead exemption, you must establish permanent residency in the Sunshine State and relinquish any similar property tax exemption in another state. Some ways to prove permanent residency may include a Florida driver’s license, license plate number or voter registration number. If you also own a home in another state, you should review that state’s residency rules as well.

Are military benefits taxed in Florida?

Because Florida does not have a personal income tax, military pensions and active-duty pay are not taxed.

What is the deadline for filing Florida state taxes in 2023?

Florida residents do not need to file a state tax return because the Sunshine State does not have a personal income tax.

Also of Interest:

Sharon Waters, a former CPA, has written for and other publications.

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