Updated 3 yearss ago
Today, Florida TaxWatch released the 2018 edition of the How Florida Compares: Taxes report. For several years, TaxWatch has published this easy-to-use guide to help Floridians better understand their state through comparing our state's taxes to those that are levied across the nation. The report provides nonpartisan information on where Florida ranks and contains nearly 40 tables, graphs, and charts that provide a comprehensive look at tax collections and other government revenues for all 50 states.
One of the key takeaways from this year's report is that Florida continues to be a relatively low tax state. Floridians’ per capita state and local revenue collections total $5,679, the 42nd highest amount among the 50 states. While Florida’s state tax and revenue burdens are very low compared to the other states, local tax burdens are much higher. Florida’s “Per Capita Local Own Source Revenue” and “Per Capita Local Tax Collections” rank 15thand 27th, respectively.
"How Florida Compares: Taxes helps policymakers and taxpayers alike know if we are winning or losing the race to attract more wealth and opportunities for economic growth," said Florida TaxWatch President & CEO Dominic M. Calabro. "It also shows us where we need to be more competitive."
Another key takeaway shows that Florida's high reliance on local governments to provide public services results in higher local taxes.
"While overall property taxes in Florida are 'middle-of-the-road,' the current system puts an inequitable property tax burden on non-homestead property," said Vice President of Research Kurt Wenner. "Along with taxes such as Florida's unique Business Rent Taxes, this results in businesses paying more than half of all taxes in Florida, the 12th highest portion in the nation."
Key Findings By-The-Numbers
- Florida continues to be a relatively low tax state. Floridians’ per capita state and local own source revenue collections total $5,679, the 42nd highest amount among the 50 states (see p. 8 in the full report).
- Florida’s state government collects significantly less revenue per capita than the average state. “Per Capita State Own Source Revenue” is 63.8 percent of the U.S. average (Florida per capita is $2,584 compared to the U.S. average of $4,049, a difference of $1,465); “Per Capita State Tax Collections” are 64.2% of the U.S. average (Florida per capita is $1,839 compared to the U.S. Average of $2,863, a difference of $1,024). (See pp. 21-22.)
- While Florida’s state tax and revenue burdens are very low compared to the other states, local tax burdens are much higher. Florida’s “Per Capita State Own Source Revenue” and “Per Capita State Tax Collections” rank 50th and 49th, respectively (see pp. 21-22), whereas “Per Capita Local Own Source Revenue” and “Per Capita Local Tax Collections” rank 15th and 27th, respectfully (see pp. 40-41).
- Florida relies more heavily on local revenue to fund government than almost all other states. Florida local governments account for 53.3 percent of Florida’s total state and local revenue, the second highest percentage in the nation (see p. 15).
- Florida’s state and local revenue rankings reached their all-time high in 2006 (22nd for both), fueled by skyrocketing local property taxes and rapidly increasing sales and documentary stamp tax collections at the state level. As the economy soured, so did revenue collections, as they fell dramatically from their windfall levels. Florida’s ranking has dropped 20 spots to 42nd in FY 2015 (latest available 50-state data).
- Florida’s per capita property tax ranking is right at the median—25th. While state revenue collections began to improve in 2011, it took longer for local property taxes to recover. In 2014, property taxes finally began to reverse a trend of five straight years of declining collections.
- Florida also classifies 38.7 percent of its state and local own-source revenue as non-tax revenue, the 7th largest percentage in the nation (see p. 17). Nearly half (46 percent) of local own-source revenue is classified as non-tax.
- State revenues equal 5.8 percent of Floridians’ personal income, and local revenues take out 6.6 percent. This compares to the national average of 8.1 percent and 6.5 percent, respectively.
- Florida relies more heavily on transaction taxes than most states. Transaction taxes (general and selective sales taxes) account for 81.5 percent of all Florida’s state tax collections, compared to the national average of 47.2 percent (see p. 24).
- Florida has the highest state and local selective sales (excise) taxes on utilities in the nation. Florida also taxes motor fuels and alcoholic beverage higher than average, ranking 15th and 19th, respectively (see p. 14).
- Thanks to the 2015 Legislature reducing the communications services tax, Florida’s “State & Local Cell Phone Tax Rate” has fallen from 4th highest in 2015 to 8th in 2016 and 10th in 2017. Still, at 14.76 percent, our cell phone tax rate is significantly higher than both the U.S. Average of 12.11 percent and Florida’s average state and local general sales tax rate of 6.8 percent. (See p. 19.)
- Florida’s housing sector also produces significant revenue for the state. Florida’s documentary stamp taxes are rising rapidly again after falling sharply during the recession. Florida collected $276 of these taxes per capita in 2006, but that amount fell to $72 in 2009. Housing is improving again, and per capita collections have risen to $130 in 2016, the nation’s second largest burden. (See p. 33.)
- Florida is one of seven states without a personal income tax. The average state relies on personal income taxes for 37.0 percent of its tax revenue. (See p. 28.)
- Businesses pay more than half (51.7 percent) of all state and local taxes in Florida. This is the 12th highest percentage in the nation and higher than the national average of 43.9 percent. (See p. 18.)
About the Author
Kurt Wenner, Vice President of Research. Kurt has authored all of the major tax publications produced by Florida TaxWatch, including pieces on Florida’s Intangibles Tax, and general sales, property, and business tax issues.
For more research and insights, go to FloridaTaxWatch.com.