How do Florida’s residential property tax rates rank among the states? A recent study by the non-profit Tax Foundation ranks the effective owner-occupied residential property tax rates of all fifty states. To provide a meaningful comparison, the study takes into account percentage value increase limitations (like Florida’s “Save Our Homes” cap) and exemptions (like Florida’s “Homestead Exemption”).
The study ranked Florida twenty-five out of the fifty states, with a 1.06% average effective tax rate after taking into account exemptions and limitations. Hawaii’s 0.28% mean effective tax rate ranked lowest. New Jersey’s 2.38% mean effective tax rate was the highest, followed by Illinois, New Hampshire, and Connecticut, respectively.
Three of the four states with the highest property tax rates also impose significant state income taxes. While we wish Florida ranked at the bottom of the property tax rate list with Hawaii, we are grateful Florida does not impose a personal income tax in addition to its property tax.
In a closely watched case, the Florida Supreme Court recently ruled that the tourist development tax (aka the bed tax) is not applicable to the total monetary amount charged by online travel companies, like Expedia, to secure hotel reservations. Counties may only tax the actual amount paid by the online travel company to secure the hotel reservation. Several counties filed a declaratory judgment action against Expedia and other online travel companies. The counties were seeking to tax online travel companies for the total amount a customer pays for making a hotel reservation. Customers make reservations for a hotel on the online travel company’s website, and the price paid by the customer includes a “mark-up” that is greater than the amount paid by the online travel company to the hotel. The counties sought to tax the total amount paid by the customer to the online travel company for securing the hotel reservation. In analyzing the legislative history of the tax, the Court ruled that the tax is be imposed only on the lower amount that hotels receive from the online travel company for the rent of their rooms. A link to the case is here: http://www.floridasupremecourt.org/decisions/2015/sc13-838.pdf.