There are countless reason why you choose to live where you live; the climate, the schools, job and recreational opportunities to name just a few. But state and local taxes can make a big difference and have a significant impact on your take-home pay. According to research completed by The Tax Foundation, Florida ranks very favorably in the 13th position when comparing the percentage of income absorbed by state and local taxes. At 10% only in Alaska, New Hampshire, Delaware, Tennessee, Alabama, Oklahoma, Texas, Wyoming, Montana, North Dakota, New Mexico or South Dakota will you find yourself paying a smaller percentage on average.

Even with a favorable state tax environment there is much controversy surrounding property taxes in the state. Some observers suggest we should not gripe too much since we have no state income tax. Still, Governor Crist is committed to a comprehensive examination of Florida’s property tax structure. One of the main issues is the “homestead” provision that the state adopted in the 1990’s that caps a homeowner’s property tax increases at 3% a year. When the house is sold, the cap no longer applies; creating situations in which neighbors with similar homes pay disparate amounts in property taxes. There are many deals on the table but one thing is clear; all parties want a large reduction over the next 5 years. The major sticking point is somehow doing away with the homestead caps, which are confusing but nonetheless popular with homeowners who currently benefit from them.

So with property tax reform on the table we still enjoy a more favorable tax liability that 37 other states and that will probably only improve with whatever reform eventually is agreed upon.