Florida Axes Intangibles Tax

Klotz on Bonds

Home > News and Perspectives > Florida Axes Intangibles Tax

<h3>James A. Klotz</h3>

James A. Klotz

Several years after they began chipping away at the state Intangibles Tax, Florida lawmakers this week voted overwhelmingly to repeal it.

The tax affects investors holding bonds issued by states and political subdivisions outside of Florida. Legislators began reducing it in earnest in 1999. By Jan. 2006, the rate was dropped from $1.00 to $.50 per thousand of market value.

The state House of Representatives approved the measure in March, while the state Senate passed the bill by a 30-9 vote earlier this week.

The tax affected individuals with more than $370,000 in intangible personal property and married couples with more than $620,000.

Gov. Jeb Bush considered repeal of the tax one of his main priorities for this legislative session. On numerous occasions, he called it “a penalty for people who are taking responsibility for their own retirement by saving and investing over a lifetime.”

The bill is now awaiting Bush’s signature.

James A. Klotz

President

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

Apr 27, 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.