Where does Florida's government get its money? (2024)

FAQs

Where does Florida's government get its money? ›

Florida does not levy an individual income tax. After federal transfers, Florida's largest sources of per capita revenue were property taxes ($1,624) and charges ($1,578), such as state university tuition and highway tolls.

Sales and Excise Taxes

Florida primarily makes up for its lack of an income tax with its sales tax, which generates around 80% of the state's revenue. Florida's sales tax is imposed on services and goods, and both the state and county levy a certain percentage.

Most of the revenue is set to come from sales tax collections. The state relies heavily on its general sales tax to balance its budget. Moreover, the governor expects the state's general sales tax to raise $1,569 per capita in FY 2024-2025. This surpasses the U.S. average and the average among Southern states.

Florida's businesses make the state's tax system work. Businesses calculate, collect, and transmit the tax money that funds state government and the services it provides. The majority of Florida's businesses voluntarily and conscientiously carry out these responsibilities, keeping the state's tax collection costs low.

The federal government collects revenue from a variety of sources, including individual income taxes, payroll taxes, corporate income taxes, and excise taxes. It also collects revenue from services like admission to national parks and customs duties.

Debt Issuance

As of June 30, 2023, the total outstanding direct debt of Florida was $16.3 billion, an $800 million decrease from the prior fiscal year.

With no state income tax — the state constitution forbids it — Florida's state government generates the bulk of general revenue (75% to 80% depending on the year) from sales tax collections. It gets the rest from a variety of sources, including documentary stamp taxes, insurance taxes and corporate income taxes.

According to the SmartAsset study, you would need to have an annual household income of $678,800 to earn your place in Florida's 1% club in 2023. That's just slightly above the national average of $645,600. And the average tax rate Florida for this group is 25.23%.

The state of Florida has one of the lowest tax burdens in the country, with no state income tax. While the state collectively paid in $252 billion between businesses and individual taxpayers, Florida also received $37.7 billion from federal funding for the coming fiscal year, according to state budget starting in July.

The regressivity in Florida's tax code is largely driven by the elimination of a personal income tax roughly 100 years ago. Florida depends heavily on its general sales tax and various excise taxes, such as taxes on motor fuel, alcoholic beverages, and tobacco, to maintain a balanced budget.

Does Florida receive more federal funds than it pays? ›

Minnesota, New Jersey, Delaware, Illinois and Florida are least dependent on the federal government. These states all contribute multiples more to the federal government than they receive, with residents paying at least $5 in taxes for every $1 in direct support received from the federal government.

If Florida were a country, its $1.3-trillion market would rank it as the 15th largest economy in the world.

The answer is that each state is different, but they all offset their lack of income tax with revenue from other types of taxes, such as sales and property taxes.

Senior Citizen Exemption – Property tax benefits are available to persons 65 or older in Florida. Seniors may qualify for an extra exemption for an additional $50,000 of home value.

Florida has no state income tax, which makes it a popular state for retirees and tax-averse workers.

While still an exceptional amount, the budget surplus is down from the $17.7 billion balance that was estimated to be remaining at the end of this fiscal year and the $22.8 billion the state had left over in FY 2021-22. The growth in revenue the state has enjoyed will likely not continue.

Does Florida Have a State Income Tax? No, Florida is one of nine states that do not tax the income of their residents. The others are Alaska, Nevada, South Dakota, Tennessee, Texas, and Wyoming. In addition, Washington and New Hampshire tax investment income, but not wage income.