USA – FLORIDA Law and Practice Contributed by: Jennifer Jordan McCall, Drew Reitz, Christine Tsai and Maria Williams, Pillsbury Winthrop Shaw Pittman LLP
Pillsbury Winthrop Shaw Pittman LLP 324 Royal Palm Way, Suite 220, Palm Beach, FL 33480-4309, USA
Tel: +1 561 232 3300 Fax: +1 561 232 3301 Email: jmccall@pillsburylaw.com Web: www.pillsburylaw.com
1. Tax 1.1 Tax Regimes
ments can include the county government, school board, water management districts, special districts and county municipalities. These taxes can be sub - ject to various property tax exemptions, including the Florida homestead exemption (as discussed in 1.2 Exemptions ). Florida has a general sales and use tax of 6%. Excep - tions apply to: 1) retail sales of new mobile homes (3%); 2) amusement machine receipts (4%); 3) rental, lease, or licence of commercial real property (4.5%); and 4) electricity (6.95%). There may be an additional discretionary sales surtax (ie, a county tax) imposed by certain Florida counties which applies to most transactions subject to the sales and use tax. Florida also imposes a corporate income/franchise tax of 5.5% imposed on all corporations for the privilege of conducting business, deriving income, or existing within Florida. 1.2 Exemptions As previewed in response to 1.1 Tax Regimes , there are exemptions from the federal estate, gift, and GST tax. This means that an individual can transfer prop - erty up to the amount of the exemption, during life or at death, without having to incur these taxes. In 2011, the exemptions were USD5 million, indexed for inflation. In 2017, Congress doubled the exemption amount to USD10 million, indexed for inflation. The One Big Beautiful Bill increased the federal estate and gift tax exemption to USD15 million for each individu - al, starting in 2026.
On a federal level, the United States generally impos - es income taxes, estate taxes, gift taxes, and gener - ation-skipping transfer taxes (GST tax) on individu - als. The estate tax, which is a tax on the individual’s right to transfer property at death, is imposed on an individual’s gross estate for transfers that exceed the exemption limit. The gift tax, which is a tax on the gratuitous transfer of property made during lifetime, is imposed on the transfer of gifts that exceed the exemption limit. The GST tax applies on the transfer of assets to individuals that are more than one genera - tion below the transferor (if it exceeds the exemption limit). The exemption limits for the estate, gift, and generation-skipping transfer taxes are discussed in 1.2 Exemptions . On the state level, Florida does not impose state income taxes, including on investment and retirement income. There are no state estate taxes, which means that the estate will not be subject to any state estate taxes when an individual passes away. Nor are there state inheritance taxes if an individual inherits property from someone else. Florida imposes property taxes on the ownership of real property, based on the assessed value of the property as of 1 January of that year, multiplied by a tax rate (eg, a millage rate) set by local governments. The millage rate is a tax rate defined as the dollars assessed for each USD1,000 of value. Local govern -
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