Your Tax & Business Advisor
What is the Florida Intangibles Tax?
By Raymond S. Kulzick, CPA, DBA
As published in the Pinecrest Tribune. January 18, 1999.
What is the Florida Intangibles Tax?
Many individuals and businesses have recently received forms and instructions for filing the Florida Intangible Personal Property tax. This is a "mysterious" tax on many types of intangible personal property (such as mutual funds, stocks, and accounts receivable). It is assessed on both businesses and individuals. Receipt of forms does not necessarily mean that you owe the tax or have to file. Likewise, not receiving the forms is not an excuse to not file, should you owe it.
In recent years, Florida has been very aggressive in pursuing individuals and businesses who have not filed, but "appear" to owe tax. Florida obtains lists of individuals from the IRS, stockbrokers, and other sources. The Department of Revenue also cross-checks against lists of Corporations and other entities registered with the Florida Secretary of State.
There have been a number of favorable changes in the law during the past year. Although these have reduced the amount of tax due for most businesses and individuals, they have added to the complexity of computation.
Generally, all intangible assets except for those exempted must be included on the return. Typical assets that are exempt are bank accounts and bank CDs (must be government insured), Florida municipal bonds, U.S. treasury notes and bonds, and assets in qualified retirement accounts (such as an IRA, 401K, or 403B).
Assets that are taxable include stocks, corporate bonds, almost all mutual funds (including money market funds), many U.S. government agency bonds, and notes and accounts receivable. If you are the owner of an unincorporated business, the intangible assets of that business are also subject to tax on your individual return. The law is somewhat complex in terms of which assets are taxable and which are not. If you think you might have assets subject to this tax, obtain the advice of a qualified professional.
For individuals, there is no tax on the first $20,000 of taxable assets ($40,000 for joint filers). Assets between $20,000 and $100,000 ($40,000 and $200,000 for joint) are taxed at $1 in tax per $1,000 in assets. Assets over $100,000 ($200,000 joint) are taxed at $2 in tax per $1,000 in assets. If less than $60 in tax is owed on a return (same for individual or joint), no tax is due, but you still need to file a return.
Most corporations, trusts, and partnerships are also subject to the tax. The tax rate for corporations is $2 per $1,000 in assets. Banks pay $1.50 per $1,000. An exemption for one-third of accounts receivable is newly available this year. Businesses must include accounts receivable, even if they file income tax returns on the cash basis. Corporations may also pay the tax on behalf of their Florida stockholders. If the business entity owes less than $60 no tax is owing, but a return still must be filed.
Unlike most other taxes, the intangible tax is a current year tax. Returns for 1999 include assets owned on January 1, 1999 and are due not later than June 30, 1999.
Raymond S. Kulzick is a CPA, and technology and management consultant with offices in Pinecrest at 12177 S. Dixie Highway. If you have questions or suggestions for future columns, please contact him at 305-233-2280 or firstname.lastname@example.org. More information is also available on the firm's Web site at http://www.kulzick.com.
This article provides information of a general nature only and should not be acted upon without seeking appropriate professional advice concerning your specific situation.
For more information:
Florida Intangible Personal Property Tax - A Summary
Florida Intangible Tax - Individuals - Q & A
Florida Intangible Tax Reduced on July 1, 2001
Kulzick Associates PA - Tax Services
© Copyright 1999 Raymond S. Kulzick. All rights reserved. 990104.
This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance.