Off the Cuff / My Other Journal

Form DR-601I - Florida intangibles tax

Yesterday and today, we did our tax by filing the form DR-601I. This tax bothers me greatly because of the work involved, but not because the money to be paid to the state government. God knows this state deserves a lot more funds coming to it.

Contrary to most everybody's belief, I like the way the state of Florida is run. True, I have little comparison to form a strong opinion on the subject, since the only other state I was a resident of was New York.

With what little comparison I have though, I think Florida takes care of its residents and infrastructure better than most. In return, Florida residents pay no personal income tax to the state. Instead, Florida has an insubstantial intangibles tax to be paid after 250,000 of intangible assets per person. If a couple has more than 500,000 in assets, they have to pay some minimal tax on that.

The law says: “Intangible Personal Property Tax in Florida is a current year tax, which means payable in the same year. If you are a legal resident living in Florida on Jan. 1 of the tax year, you must file an intangibles tax return if your tax obligation is $60 (U.S. funds) or more.” These intangibles are: stocks, bonds, certain money market funds, mutual funds, loans, notes, a portion of accounts receivable and limited partnership interests.

Like I said it isn’t the money. It is the unnecessary work, because one has to list every item, multiply, add, subtract and file his findings that come dizzily out of a mathematical maze. Also, if a person keeps the same stocks, he pays tax on them year after year, which makes it illegal, because over the years this becomes multiple taxing. We have to list the stocks, bonds, mutuals etc. at the price they were on January 1 of the tax year, and pay tax on not just the gains within the last year but the entire holdings. The amount of tax, at the end, seems minimal; however, the time spent on this work is tremendous. For example, if a couple has about 750,000 in stocks, minus the 500,000 exemption, the tax comes about to less than 200 dollars a year.

I know I am not going to be very popular for saying this, but why doesn’t the state of Florida put a personal income tax that is lawful and easy to prepare? Not only this would bring more funds to the state, but also it would be easier on the people writing down every single asset they have year after year.