Here’s How Tax-Friendly Florida Is: Kiplinger

FLORIDA — Because it has no income tax, Florida is labeled as one of the most tax-friendly states in the country, according to a finance publication. However, other taxes in the Sunshine State are average, or even above-average, when compared to other locations.

The designation comes from Kiplinger’s tax map for 2019, which was updated in October. The map divides states up into five categories for taxes: most tax-friendly, tax-friendly, mixed, not tax-friendly and, finally, least tax-friendly.

According to the map, the most tax-friendly state in the country is Wyoming, where there is no state income tax and a 0 percent effective income tax rate. Two other states out West — Nevada and Alaska — along with Tennessee and Florida rounded out the top five spots for the most tax-friendly states.

"Property taxes, for instance, are right around the national average. For a $400,000 home in Florida, the average annual property tax bill will be about $4,166," Kiplinger writes. "The state’s average combined state and local sales tax rate is middle-of-the-road, too. It’s 7.05%, according to the Tax Foundation.

"Motorists get hit hard, though: Florida’s gas tax of 41.99 cents per gallon is the 10th-highest state tax on gasoline in the country," the editors said. "Florida is one of only two states to exempt cigars from all taxation, a reflection of its long history as a cigar-manufacturing location."

Here’s what makes Florida one of the most tax-friendly states in the nation:

• Sales tax: 6% state levy. Localities can add as much as 2.5%, and the average combined rate is 7.05%, according to the Tax Foundation.
• Effective tax rate: There is no state income tax.
• Property taxes: In Florida, residents pay an average of $1,041 in taxes per $100,000 of assessed home value.
• Vehicle taxes: 6% state sales tax is due on the entire purchase price. Additionally, county sales tax (based on where the buyer lives) is due on the first $5,000 of the purchase price (or on each lease payment).
• Inheritance and estate taxes: None.

See your state’s full tax profile.

Illinois topped Kiplinger’s list as the least tax-friendliest state in the nation. Along with Wisconsin, the tri-state area consisting of Connecticut, New York and New Jersey, made up the remainder of the top five least-friendliest states in the U.S.

Kiplinger used tax data from each state’s tax agency, the U.S. Census and other sources to compare each state’s tax burden. The tax-friendliness was calculated based on the sum of income, sales and property tax that a sample filer paid in each state. The full methodology and the profile of the sample filers are found on Kiplinger’s website.