Florida does not charge state income tax on wages, salaries, or investment income
Florida is one of nine states with no state income tax. That means if you work in Florida or live there as a resident, you do not pay a state income tax on money you earn from a job, retirement accounts, or investments. You still owe federal income tax to the IRS — that does not change — but the state itself takes nothing from your paycheck or investment gains.
This applies whether you are a full-time employee, self-employed, or retired. A person earning $60,000 a year in Florida pays the same state income tax as someone earning $600,000. Both pay zero.
The other eight states without state income tax are Alaska, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire (which taxes only investment income, not wages).
Key Takeaways
- Florida residents and workers pay no state income tax on wages, retirement income, or investment gains.
- You still owe federal income tax; Florida's lack of state tax does not reduce what you owe the IRS.
- Florida makes up lost tax revenue through sales tax (currently 6 percent statewide, higher in some counties) and property taxes.
- If you move to Florida from a state with income tax, your federal tax burden stays the same, but your total state and local tax may drop.
- Retirees moving to Florida from high-income-tax states often see a real reduction in total tax paid, though property taxes vary by county.
How Florida funds state services without income tax
States need money to run schools, roads, courts, and other services. Florida replaces income tax revenue with sales tax and property tax.
Florida's statewide sales tax is 6 percent, but most counties add a local sales tax on top of that. Depending on where you live in Florida, the total sales tax ranges from 6 percent to 7.5 percent. Every time you buy something taxable — groceries are exempt, but most other goods are not — you pay this tax at the register.
Property tax in Florida is based on the assessed value of your home or land. The statewide average is around 0.83 percent of property value per year, but this varies significantly by county. Some counties charge less than 0.7 percent; others charge more than 1 percent. If you own a $300,000 home in a county with a 0.83 percent rate, you would pay roughly $2,490 per year in property tax.
Florida also collects corporate income tax, documentary stamp tax (a small fee on real estate transactions), and various licensing and permit fees.
What happens to your total tax bill if you move to Florida
Whether moving to Florida reduces your overall tax burden depends on where you came from and what you own.
If you earned $75,000 a year in New York and paid roughly 6.5 percent in state income tax (about $4,875), moving to Florida eliminates that payment. You would no longer owe New York state income tax. However, you would now pay Florida sales tax on purchases and property tax if you own a home. For someone who rents and spends modestly, the net savings can be real. For someone who owns expensive property, Florida's property tax might offset the income tax savings.
A retiree living on $40,000 a year from Social Security and a pension in California (which taxes retirement income) might save $2,000 to $3,000 per year by moving to Florida, depending on their home value and spending. Someone moving from Texas (also no income tax) would see little change in state and local tax, though property tax rates differ between the two states.
The only way to know your personal situation is to calculate what you would pay in property tax and sales tax in the specific Florida county where you plan to live, then compare that to what you currently pay in state and local taxes where you are.
Which types of income are not taxed in Florida
Florida's lack of state income tax covers all forms of earned and unearned income. Wages from employment, self-employment income, interest, dividends, capital gains, rental income, and retirement distributions (from IRAs, 401(k)s, and pensions) are all free from Florida state tax.
Social Security benefits are not taxed by Florida, which is a significant advantage for retirees. Some states tax Social Security; Florida does not. If you receive $30,000 per year in Social Security and move from a state that taxes it, you keep the full amount.
The only major income-related tax Florida does impose is the corporate income tax, which applies to business profits, not individual income. If you own a business structured as a corporation, you would owe Florida corporate tax on profits, but as a sole proprietor or LLC member, you would not.
Federal taxes still explore in Florida
Living in Florida does not change what you owe the federal government. You still file a federal tax return and pay federal income tax at the same rates as someone in any other state. The IRS does not care whether your state has income tax or not.
If you earned $100,000 in 2023 and are single, you owe the same federal tax whether you live in Florida, California, or Maine. The difference is only in state and local taxes.
Some people mistakenly believe that moving to a no-income-tax state reduces their federal burden. It does not. The benefit is only at the state level.
Sales tax and property tax rates vary by county
Because Florida has no state income tax, the burden falls on sales and property taxes, and these are not uniform across the state. Where you choose to live in Florida matters for your tax bill.
Sales tax ranges from 6 percent (the state minimum) to 7.5 percent depending on county. Duval County (Jacksonville) charges 7 percent. Miami-Dade County charges 7 percent. Broward County charges 7 percent. Some rural counties stay at 6 percent. Over time, a 1 percent difference in sales tax adds up if you spend a lot.
Property tax rates are even more variable. Alachua County (Gainesville) has an effective rate around 0.71 percent. Brevard County (Melbourne area) is around 0.74 percent. Collier County (Naples) is around 0.96 percent. If you are buying a $500,000 home, the difference between a 0.71 percent county and a 0.96 percent county is roughly $1,250 per year.
Before moving to Florida, research the specific county's sales tax and property tax rates. The difference between counties can be as significant as the difference between states.
Frequently Asked Questions
Do I have to live in Florida to avoid paying Florida income tax?
No. If you work in Florida but live in another state, you do not owe Florida income tax on that income. Florida only taxes residents on income earned anywhere if they are considered Florida residents for tax purposes. If you work in Florida but maintain your primary residence in another state, you typically do not owe Florida tax.
Does Florida tax retirement income or pensions?
No. Florida does not tax income from pensions, IRAs, 401(k) withdrawals, or Social Security. This is one reason many retirees move to Florida — they can withdraw retirement savings without paying state income tax on the distributions.
What if I own rental property in Florida?
Rental income is not subject to Florida state income tax. However, you still owe federal income tax on the rental income. You would also pay property tax on the rental property itself based on its assessed value and your county's rate.
Is Florida income tax-free for non-residents who work there?
If you work in Florida but live in another state and are not a Florida resident, you generally do not owe Florida income tax on your wages. However, if you become a Florida resident (by establishing a permanent home there and meeting other residency tests), you would owe Florida tax on all income, regardless of where you earn it. The definition of residency varies, so check with a tax professional if you are unsure.
Does Florida have any other taxes I should know about?
Yes. Florida charges sales tax (6 to 7.5 percent depending on county), property tax (varies by county, typically 0.7 to 1 percent of home value), corporate income tax, and documentary stamp tax on real estate transactions. There is also a small intangible personal property tax in some cases, though it is rarely enforced on individuals.