TAMPA, Fla. — If you are moving to Florida, you may be taking on a new job. Or, with today’s remote opportunities, your job may be coming with you.
You may be moving from a state that charges a progressive income tax where higher earners pay more. Or, a state with a flat income tax where everyone pays the same regardless of income.
Either way, there is some good news for your paycheck if you move to Florida.
Florida is one of only nine states with no income tax. Along with income, Florida doesn’t place a tax on inheritances, gifts or intangible personal property, like shares.
If you’re moving from states like California, New Jersey, or even Hawaii, you’ll see even more money coming your way every month. These states have the highest income tax rates, reaching more than 13% for high earners.
To make things easier, moving to Florida also means only having to file a federal tax return when tax season rolls around.
Using SmartAsset, we calculated the differences in net income depending on the income tax rate. If you have a salary of $50,000 a year while living in the Tampa Bay area, your gross bi-monthly paycheck is about $2,100. After federal income tax is taken out, along with FICA and state insurance, you’re walking away with $1,676.
You won’t be taking home as much with the same salary in San Francisco. After federal, state, and local income taxes are taken out, you’re taking home $1,582 per paycheck.
In New York City, it’s even less, with $1,512 per paycheck. That money saved can add up in the long run.
However, states that do not have income tax must make up that money elsewhere. Typically, it is through a higher sales tax.
For example, Tennessee, another state with no income tax, has one of the highest sales tax rates in the country, only second to Louisiana.
Luckily, that’s not the case in Florida.
In Florida, sales tax is applicable to each sale, admission, purchase, storage or rental, unless the transaction is exempt. The state places a general state sales tax rate of 6%, but you could still end up paying a little bit more.
Florida allows counties to tack on a discretionary sales surtax. The county surtax rate applies to a taxable item or service delivered and can vary by county, falling anywhere between 0.5% to 1.5%.
Most counties in the Tampa Bay area impose a rate of 1%, but some, like Hernando County, have a lower rate of 0.5%. Even further north in Citrus County, they have no additional surtax.
On the other hand, Hillsborough County’s rate is on the high end at 1.5%.
The average combined state and local sales tax rate is a little more than 7% for Florida, putting the state at No. 23 for the highest sales tax rates.
With no income tax, there is a little give and take on other taxes. Overall, Florida is considered one of the most tax-friendly states for middle-class families, which could mean more money in your wallet.