New York vs. Florida: Tax differences between the two states
Countless financial advisors have said clients are moving out of New York in droves following the implementation of a $10,000 cap on state and local tax deductions, headed to states with lower tax rates – specifically Florida.
Even President Trump has weighed in on the action, tweeting last month that people are “fleeing New York in record numbers.”
Florida received more movers than any other state last year, at 566,476 people, according to data from the U.S. Census Bureau. New York's outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.
But just how much lower are taxes in Florida?
Individuals earning $650,000 can save more than $69,700 in taxes per year by moving from New York to the Sunshine State.
Here’s a breakdown of the differences between the state’s tax structures:
Income taxes
Perhaps the most well-known tax benefit of moving to Florida is that residents are not subject to a statewide income tax. That means they only have to pay federal rates.
The state tax rates in New York, on the other hand, range from 4 percent to 8.82 percent.
Death taxes
New York has an estate tax, which means that when a resident dies, property located in the state will be subject to both the federal and state rates.
Estate tax rates in New York range from 3.06 percent to 16 percent. The exclusion amount is $5.74 million.
Florida has no estate tax of its own, meaning assets are only subject to the federal tax.
Neither Florida nor New York have an inheritance tax, but residents who inherit out-of-state property may still owe taxes to another state.
Real estate property taxes
The effective real estate property tax rate in Florida is 0.98 percent, according to data from WalletHub.
That compares with 1.68 percent in New York.
Therefore, a Florida resident paying real estate property taxes on a $194,000 home would owe $1,897. A person in New York with a home valued at the same amount would owe $3,246.
Sales taxes
When it comes to total state sales and excise taxes, there isn’t much of an advantage for those living in Florida. In fact, the rate in New York is actually lower.
However, when additional local sales tax rates are taken into account, total rates can reach nearly 9 percent in New York (including New York City). That brings the top total rates nearly even in both places.
Overall tax burden
In a ranking of states with the highest overall tax burden – taking into account property taxes, individual income taxes and total sales and excise taxes – New York ranked the highest (12.97 percent overall burden).
CLICK HERE TO READ MORE ON FOX BUSINESS
On the flipside, Florida ranked 47, with an overall estimated tax burden of 6.56 percent.