Many states in the United States are facing challenges with revenue collection thus, they have to increase the taxes they collect. This is the reason why many who are living above the average as well as those who are financially struggling are trying to reduce the income tax bills they are paying. Aside from the income taxes that many states are collecting, they are also charging state death tax. No wonder many businesses are starting their Florida application for a tax ID because the state is considered to be a tax haven.
The state of Florida is the go-to place of the rich who are planning to relocate in order to lessen the taxes they are paying. Aside from the fact that there are no taxes in the states, there are other reasons why the rich are moving in Florida.
- There is no personal income tax in Florida. When one becomes a resident of Florida, they are automatically exempted from paying a personal income tax. This is something that the rich are aiming for. All of the states, there are only seven that are not collecting personal income tax including Florida, Wyoming, Alaska, Washington, Nevada, Texas and South Dakota.
- There is no state death tax in Florida. This is another attractive for the wealthy. Until 2005, Florida was collecting state estate tax which they call pick up tax but it was eliminated by federal laws. According to the constitution of Florida, the state is not allowed to impose state death tax.
- Assets are well protected in Florida. This is ideal for the rich with a lot of assets because the state offers various protections such as protection of life insurance’s cash value, protection from annuities as well as the IRAs, protection for homestead creditor, protection of assets under business entity and tenacity by the entirety for both personal and real estate properties.
- Florida has the best estate planning lawyers, tax advisors and wealth strategists.
The state is also a magnet to business as long as they process their Florida application for a tax ID in order to enjoy the tax benefits that is not found in other states.