When it comes to taxes, every state has its own set of laws and regulations that taxpayers must abide by. In this blog post, we will discuss some key Florida tax laws that our clients should be aware of, including voluntary disclosure on Tourist Development Tax, Tangible Personal Property Tax, the “Truth-in-Millage” Act, and Florida County Real Estate Tax.
Voluntary Disclosure on Tourist Development Tax
One of the Florida tax laws that may be unfamiliar to many homeowners in Florida is the Tourist Development Tax. This tax is paid by homeowners who receive rental income from their properties. However, homeowners may not have reported or paid this tax in the past. This can result in penalties and interest charges from the Tax Collector’s Office.
To help taxpayers rectify this issue and avoid excessive penalties, the Tourist Development Tax Voluntary Disclosure program was established. This program allows homeowners to voluntarily report and pay any previously unpaid tax liabilities with minimal penalty. It also offers assistance with registration, tax liability determination, and other tax-related questions. To prepare for voluntary disclosure, homeowners must provide a monthly breakdown of gross rental income receipts and an Individual Tax Identification Number (ITIN) or ITIN application.
Tangible Personal Property Tax
In addition to real estate or property tax, homeowners in Florida may also be subject to Tangible Personal Property Tax. This ad valorem tax (“according to worth”) is assessed on business and rental property furniture, fixtures, and equipment. This includes the value of the property’s furnishings, in addition to the property’s assessed value. The deadline for filing this tax return is April 1, and monthly penalties are assessed on the property’s value, potentially adding a 25 percent increase.
TRIM Notice
The Florida legislature passed the “Truth-in-Millage” (TRIM) Act in 1980. This law requires that taxpayers receive a Notice of Proposed Property Taxes, also known as the TRIM notice, from the Property Appraiser’s Office in the county where their property is located. This notice informs taxpayers of the taxes levied by different governmental entities and the specific amount of tax liability owed to each entity.
It is important for taxpayers to carefully review their TRIM notice and check the assessed value, as the opportunity to appeal is only available for a short period. The property’s assessed value is based on its market value as of January 1 of each year. This value is determined by looking at sales of comparable properties in the previous year. Market value is defined as the typical price a willing buyer would pay to a willing seller.
Florida County Real Estate Tax
Similarly to the TRIM Act, Florida County Real Estate Tax (previously known as property tax) is also payable annually to the Tax Collector’s Office in the county where the property is located. This tax is assessed on the property value and is known as an ad valorem tax. The Property Appraiser’s Office establishes the assessed value and prepares the tax roll.
Tax bills are mailed out on or before November 1 each year, with payment due by March 31. Discounts are available for early payment. If you purchase a resale property, you may receive a credit on your settlement statement for the tax year that you did not own the property. However, the full-year tax bill will be sent to you in November for payment in full.
Being aware of the tax laws specific to Florida can help homeowners avoid penalties and ensure compliance with their tax obligations. At HBI Tax, we are committed to helping our clients navigate these complex Florida tax laws and stay on top of their financial responsibilities. Please contact our team for further assistance.
