State officials often tout the state’s lack of an income tax as a big perk. Yet other taxes dent a company’s income.
Florida’s reputation as a relatively low tax state remains intact, according to a new report — but the state ranks high in collecting funds from citizens in some unusual ways.
The report, How Florida Compares: Taxes, is from Florida TaxWatch, a non-partisan, nonprofit independent watchdog and taxpayer public-policy research institution. Overall, the report shows, per capita state and local revenue collections increased from $5,679 in fiscal 2014-15 to $5,733 in fiscal 2015-16. That moved the state from No. 42 to No. 40 among the 50 states in total tax burden, one spot ahead of Arkansas, one spot behind South Dakota. New York has the highest total tax burden, at $11,810 per capita, while Tennessee has the lowest, at $5,066.
When broken down for specific taxes from a variety of sources, the verdict for Florida is akin to winning a silver medal: it’s a stellar record but areas for improvements are in the offing. “While Florida remains a low tax state, this report shows that opportunities remain for our state to become even more competitive as we continue to attract families and business to make Florida home,” says Florida TaxWatch Chairman Pat Neal, a former state senator and co-founder and chairman of the executive committee and Neal Communities, a $467 million homebuilder based in Lakewood Ranch.
Highlights of the report include:
• Florida relies more heavily than any other state on local tax revenues, which make up nearly 55% of total non-federal tax revenue in the Sunshine State. Florida edges out New York, Texas and Colorado in that list, while Hawaii, Delaware and Vermont have the lightest local tax revenue burden nationwide;
• Businesses pay more than half, 53.6%, of all state and local taxes in Florida. This is the 9th highest percentage in the nation and higher than the national average of 43.7%;
• Florida relies more heavily on transaction taxes than most states. Transaction taxes — general and selective sales taxes — account for 83.8% of all Florida’s state tax collections, compared to the national average of 47.7%;
• Florida has the highest state and local selective sales/excise taxes on utilities nationwide. It also taxes motor fuels and alcoholic beverages higher than average, ranking No. 17 and No. 21, respectively.
• Florida’s state and local cell phone tax burden remains high, even after the Legislature addressed the issue in 2015. The state had the fourth-highest cell phone tax burden in the country in 2015, which improved to No. 8 in 2016 and No. 10 in 2017. It ranked No. 9 in 2018, and, at 14.83%, the report states “our cell phone tax rate is significantly higher than both the U.S. average of 12.46% and Florida’s average state and local general sales tax rate of 7.05%.”