“Governor Murphy’s plan to raise taxes is a boon to Florida’s economy and a nightmare for New Jersey,” Assembly Minority Leader Jon Bramnick said in a statement. “Passing another ill-conceived tax will worsen emigration. It will also shift the tax burden onto the middle class as others leave. So what’s the high tax exodus for Florida?”
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This wave of migration was exacerbated by the $10,000 limit on state and local tax deductions (SALT). A recent analysis by a prominent tax attorney showed that a person (or couple) earning $650,000 in ordinary income could save nearly $70,000 by moving from New York to Florida.
As a Concierge Business Broker & Realtor, I limit my practice to working with individuals and businesses seeking a personalized approach to achieving their goals. I work with an attorney specializing in establishing a domicile in Florida. This is because the process becomes complex when moving from a high-tax state that doesn’t want to lose the taxes you’re paying.
Below I have described the basic steps to obtain a Florida Domicile:
Establishing himself as a Floridian
If you live in two different states, file a Declaration of Domicile. Simply owning a home in Florida technically isn’t enough. Since many “snowbirds” only go to Florida in the winter, a Declaration of Domicile confirms that this is your primary residence. Your signature on this document, once approved, confirms that you reside in Florida and that the state is your permanent residence. This is done through the circuit court clerk.
For this declaration to be approved, you need two things: physical presence in Florida and intent. The first is fairly self-explanatory. As for the latter, “intent” can be demonstrated by buying a business, having a job, having a doctor, being registered to vote, being involved in the community – the list is endless, and we will discuss many aspects below.
Having this means that all your taxes now go to the state of Florida and nowhere else (starting in the next full calendar year, of course). Since Florida does not levy income, death, or property taxes, this can be a wise decision.
Apply for a family home exemption.
Florida’s Homestead Act protects any Florida resident from losing their home to a lender or any other security holder, with the exception of mortgages. If you have to declare bankruptcy, having a Homestead Exemption can give you some breathing room. You can file for it as soon as you have a Declaration of Homestead in your name.
It also affects your taxes (for the better). Florida’s “Save Our Home” law states that once you qualify for the family home exemption, the assessed value of your property for tax purposes entails an exemption for the first $50,000 of taxable value for all tax entities except the school district (which allows a $25,000 exemption). Furthermore, once qualified, the assessed value for tax purposes cannot increase by more than 3% in a given year. This means assets you won’t have to pay taxes on.
Buy a business or take a job.
One of the clearest methods to make it difficult to legally argue that you are a resident of any other state is to buy a business or accept a job in Florida. With salaries coming from Florida and residency in Florida, no one will question otherwise!
If you wish to declare intent between two states, this is a good way to do it. Having employment in Florida will add weight to your case should your Declaration of Domicile be questioned.
If applicable, enroll your child in a Florida school, public or private. This is a way to show intent and move toward establishing residency in Florida.
For more information about the high-tax exodus to Florida, contact Edward Sklar.
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