How Florida Compares: Taxes 2022

The annual Florida TaxWatch How Florida Compares: Taxes report ranks Florida’s state and local taxes against those levied around the nation. The nearly 40 tables, charts, and graphs in this report provide comprehensive information on state and local tax rates, tax collections, and other government revenues for all 50 states, and historical information for Florida.

KEY FACTS & FINDINGS:

• Florida continues to be a relatively low tax state, with extremely low per capita state taxation but considerably higher local taxes. In total, taxes paid by Floridians grew faster than the nation as a whole in FY2019-20.
• Florida’s state and local government revenue collections fared better than the average state during the COVID-19 pandemic. Floridians’ “Per Capita State and Local Own Source Revenue**” ranking jumped four spots to 35th in FY2019-20, the highest ranking since 2011 (see p. 8). While the average per capita burden for the nation fell by 1.0 percent, Florida’s increased by 3.0 percent.
• After rising one rank from the lowest state tax burden in the country in FY2019-20, Florida’s “Per Capita State Tax Collections” ranking rose another spot—to 48th—in FY2020-21 (see pp. 22). This was not due to tax hikes, but to economic growth and increased consumer spending.
• While Florida’s state tax and revenue burdens are very low compared to the other states, its local tax burdens are much higher. While the pandemic hit Florida sales taxes hard in FY2019-20, but local property tax collections were not impacted. Florida’s “Per Capita Local Own Source Revenue” and “Per Capita Local Tax Collections” rank 11th and 23rd, respectively, rising four and five spots respectively (see pp. 40-41).
• Florida relies more heavily on local revenue to fund government than any other state.
• Florida local governments account for 56.3 percent of Florida’s total state and local revenue, the highest percentage in the nation and 22.1 percent above the U.S. average. (see p. 15).
• Florida’s property tax burden increased by $82 per person in FY 2019-20, an increase of 5.6 percent. Florida’s per capita property tax ranking reached 12th in FY 2008-09. Then the housing bubble burst and property tax collections suffered. Florida’s ranking has remained stable the last few years and now stands at 24th (see p. 42).
• Nearly 40 percent of Florida’s state and local own-source general revenue is considered non-tax revenue, the 8th largest percentage in the nation (see p. 17). Nearly half (46 percent) of local own-source revenue is classified as non-tax, highlighting Florida local governments’ use of special assessments, charges for services, and impact fees.
• Without a personal income tax, Florida relies more heavily on transaction taxes than most states. Transaction taxes (general and selective sales taxes) account for 78.1 percent of all Florida’s state tax collections, compared to the national average of 43.5 percent (see p. 24).
• Florida’s state selective sales (excise) tax ranking has dropped from 19th in 2006 to 40th in 2021 (see p. 27), mostly due to net alcoholic beverage tax collections, which used to be among the highest in the nation.
• Gross collection liability is still rising, but the credits from the Florida Tax Credit Scholarship Program now total $475 million annually (57.3 percent of liability).
• Florida’s per capita (CIT) burden increased by 36.5 percent, but that huge increase could not keep up with the national spike of 67.1 percent. Therefore, despite corporations paying much more, Florida’s rank fell five places to 35th (see p. 29). This rising burden is mostly due to the base expansion measures passed by the federal government and adopted by most states. Florida’s automatic rate reduction and refund triggers helped somewhat, but with the state tax rate returning to 5.5 percent and automatic refunds ended, large increases are in store for Florida’s CIT taxpayers.
• Florida’s average “State & Local Cell Phone Tax Rate” of 15.0 percent is the 12th highest in the nation, higher than both the U.S. average of 13.2 percent and Florida’s average state and local general sales tax rate of 7.0 percent (see p. 19.)
• A sizzling housing market in 2021 increased Florida documentary stamp and intangibles tax by 45.4 percent. This is one of the state’s major tax sources and Florida collects more than four times the per capita U.S. average. Floridians’ burden stands at $224 per capita, the nation’s third largest (see p. 33.)
• Florida is one of seven states without a personal income tax. The average state relies on personal income taxes for 39.9 percent of its tax revenue (see p. 24 and 28.)

LOOKING AHEAD:

Fueled by federal stimulus payments and
a rebounding economy, Florida’s sales tax collections soared in FY 2021-22. Coupled with increasing corporate income and documentary stamp taxes, Florida tax col- lections increased by 21.3 percent. Add in rising property values and significant voter- approved tax hikes at the local level, and the next edition of How Florida Compares will likely show higher tax burden rankings for Florida.

IMPORTANT NOTES

* Per capita amounts are calculated using state popula- tion estimates from the U.S. Census Bureau. Fiscal year (FY) population is estimated by averaging the July 1 population for the two years that contain the FY. For example, FY20-21 population is the average between July 1, 2020 and July 1, 2021. However, the official April 2020 Census estimate is used for 2020.

** “Own source revenue” is a broader measure of the financial burden citizens incur to pay for their govern- ment. It counts all direct revenue, including taxes and non-tax revenue such as charges for services, special assessments, impact fees, and net lottery revenue. It does not include intergovernmental aid, revenue from government-owned utilities and liquor stores, and so- cial insurance funds. The revenue Florida reports to the U.S. Census Bureau as taxes is lower than official state data.

*** Fiscal years in this pocket guide refer to the fiscal years of each state, which may vary slightly. Forty-six states, including Florida, have state fiscal years that run from July 1 - June 30. Florida’s local governments’ fiscal year runs from October 1 to September 30.