Florida tax analysis: state taxes remain low, local taxes still high

Florida TaxWatch (FTW) has released a new analysis examining Florida tax rates and comparing them to the 49 other states and the national average.

The nonprofit government watchdog group released 2021 How Florida Compares: Taxes on Wednesday as part of the taxpayer research institute’s larger How Florida Compares series. In the report, FTW found that per capita state tax collections fell by 4.9 percent in Fiscal Year 2019-20, significantly higher than the national average of 1.9 percent. Additionally, FTW highlighted Florida’s per capita property tax ranking, which sits above the median at 24th. FTW noted before the housing bubble burst, it reached as high as 12th, but dropped to 26th in 2014 and has since remained stable.

“As outlined in this one-of-a-kind report, Florida continues to be a relatively low tax state, with extremely low per capita state taxation, but considerably higher local taxes. While our ‘Per Capita State Tax Collections’ rank rose from 50^th to 49^th, our per capita amount still decreased by just over $100 per Floridian. On the other hand, our ‘Per Capita Local Tax Collections’ ranks 28^th, as we rely more heavily on local revenue to fund government than any other state, said Florida TaxWatch President and CEO Dominic M. Calabro.

Other key findings outlined in FTW’s report include:

• Ranked 9^th largest in the U.S., Florida classifies 38.6 percent of its state and local own-source general revenue as non-tax revenue. In fact, nearly half (46 percent) of local own-source revenue is classified as non-tax, highlighting local governments’ use of special assessments, charges for services, and impact fees.
• Transaction taxes (general and selective sales taxes) account for 81.5 percent of all Florida’s state tax collections, with the national average at just 48.2 percent.
• Businesses pay more than half (53 percent) of all state and local taxes in Florida, the 9^th highest percentage in the U.S., higher than the national average of 44 percent.

“Florida TaxWatch is hopeful that this comprehensive data and the insight it offers will serve as a resource for taxpayers and policymakers alike, allowing them to understand the costs of our state and local governments and how they stack up on a national level,” Calabro continued.

To read the full report, click here.