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Sunday, April 30, 2006

ANOTHER REASON TO MOVE TO FLORIDA [FLORIDA]

The State motto of New Hampshire is "Live Free or Die." Perhaps Florida should adopt the variation "Live Here or be Taxed," as another Florida tax enters the dust bin. Last week, the Florida Senate voted to repeal the annual intangibles tax. The Florida House had previously voted on the same thing. Governor Bush is expected to sign the bill into law, fulfilling a campaign pledge from when he first ran for office. While Governor Bush had successfully reduced the rate of tax over his two terms of office, the elimination of the tax was his ultimate goal.

Florida is often thought of as a "debtors haven, " with its expansive collection of laws protecting debtors. It should likewise be considered a "tax haven," since it has no State income tax, no State estate or gift tax, has a 3% per year cap on increases in ad valorem taxes on homesteads, and has sales tax holidays for back to school shopping and hurricane supply shopping. For those that are concerned that Florida has too little tax revenue - the fight in Tallahassee this year is not about how to raise taxes but how to (or whether to refund to taxpayers) the large tax surplus Florida presently enjoys.

For those clients who have used annual intangibles taxes to minimize or avoid the intangibles tax, assuming the bill is signed into law, this end of year chore will not be needed anymore. This is good news for clients, but even better news for their brokers and financial advisors who had to do the annual paperwork to shuffle assets into and out of these trusts.

1 comment:

Anonymous said...

If ones Parents set up a Life Estate for their domicile to go to their surviving children and after their deaths, what are the obligations to the children to The IRS when that domicile is sold?
The time between the last death and sale of the domicle was about 3 & 1/2 years.