Ray of Sunshine in Florida : Intangible Tax on the Ropes

Klotz on Bonds

Home > News and Perspectives > Ray of Sunshine in Florida : Intangible Tax on the Ropes

<h3>James A. Klotz</h3>

James A. Klotz

Florida lawmakers are in the process of making 2007 a happy new year for Florida investors holding out-of-state bonds.

A bill to repeal the Intangible Tax, paid by approximately 300,000 wealthy residents, easily passed the state House of Representatives last week, while similar legislation is moving through the state Senate.

Legislators have been chipping away at the Intangible Tax. In January 2006 they reduced the rate from $1.00 to $.50 per thousand of market value. The current bill (HB 209), sponsored by Rep. Fred Brummer (R-Apopka), passed by a 100-20 vote.

If the Senate approves the bill, the tax will be completely repealed, which Gov. Jeb Bush has supported since taking office in 1999. The governor has expressed his disenchantment with the tax on numerous occasions, calling it a “penalty for people who are taking responsibility for their own retirement by saving and investing over a lifetime. It is a bad tax and it is bad government.”

James A. Klotz

President

James A. Klotz is the President of FMSbonds, Inc.
Email the Author

Mar 28, 2006

Please note that all investing entails risk. Fixed income securities are subject to risks that will affect their value prior to maturity. Some of these risks can be related to changes in market conditions, issuer creditworthiness, and interest rates. This commentary is not a recommendation to buy or sell a specific security. All references to tax-free income refer to U.S. federal income tax. Income earned by certain investors may be subject to the Alternative Minimum Tax (AMT), and or taxation by state and local authorities. Please consult with your tax professional prior to investing. For more information on these topics please click on the “Bond Basics” link below or search by keyword at the top of this page.