Does Miami have a local personal income tax?

[ryan_gz]

Absolutely cannot find anything online that answers this question directly. I'm sure a lot of New Yorkers looking to make a move to Florida understand that there is no Florida state income tax. But what about Miami? Does it have a local city income tax like New York City does?

I'm just wondering what the catch is to moving to Florida from NYC. In NYC we have a ~4% personal income tax, plus if you own a pass-through business you get taxed another 4% (UBT - Unincorporated Business Tax) by NYC, so it's basically a ~8% personal local income tax. Plus NY State levies a ~9% state income tax. It's excruciatingly painful.

So when I heard from a friend about Florida and Miami truly not having any sort of tax burden, I got curious. Can anymore confirm this?

[aslan]

Florida does not have an income tax, period. It's actually prohibited by the state's constitution, which makes it very hard to impose one in the future. And you guessed it, Miami does not have a local city income tax either as a result.

I know it's hard to digest because New Yorkers are so used to having your city government tax your income, but it's actually quite rare for cities to have their own local income tax.

Just FYI, there are 7 states that have no state income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

[Benny]

Keep in mind that Florida does have to fund its services through other means, and that involves a somewhat high 6% sales tax on most goods, with exceptions for some essentials like groceries and medicine. The vast majority of counties in Florida also levy their own sales tax of ~1-2% on top, so you're talking about sales tax in Florida of roughly 7.5%.

Property taxes in Florida are also a bit higher than the national average. You need to fund basic government services somehow.

With that said, to be fair to Florida, I think their sales taxes are still lower than New York's which as of 2018 range up to 8.875% for most goods and 18.375% for parking: https://www1.nyc.gov/site/finance/ta...sales-tax.page

Also, you're not going to be able to avoid closing costs in either New York or Florida. See below for an interesting overview of closing costs and other real estate related taxes in NYC:

[ryan_gz]

I'm not so concerned about sales taxes (they appear to be lower in Florida vs New York anyway) nor high property taxes (some NYC suburbs like Westchester County boast the highest property tax rates in the country at over 2%, you can't beat that right?).

What does interest me is how Florida treats small business owners. Can anyone confirm that Florida doesn't have some sort of crazy UBT tax like NYC?

Is there a corporation tax?

[aslan]

Both Florida and New York have state corporate income taxes. Florida levies a 5.5% state tax on federal taxable income for corporations. New York has a General Corporation Tax (GCT) of 8.85%.

More info on GCT: https://www1.nyc.gov/nycbusiness/des...ration-tax-gct

The big difference for small business owners between New York and Florida is that Florida doesn't have any sort of franchise or privilege tax, nor any sort of UBT tax on pass-through entities. This means that unless your Florida business is structured as a traditional C corporation, neither your business's income nor its assets will be subject to state taxation.

The UBT tax (https://www1.nyc.gov/site/finance/ta...s-tax-ubt.page) is something most New York small business owners forget or don't know about until it hits them. This is primarily because pass through entities by definition are not taxed at the entity level, because the taxation is supposed to happen at the personal level. However, NYC is let's say ... unique ... in not recognizing this. So the 4% income tax on pass through entities is usually a surprise for small business owners.

Of course, none of this matters for the big corporations like the big Wall Street banks or technology companies that have operations in NYC. They usually have tax break deals or other tax incentives made with NYC resulting in little or no tax for years. It makes sense for NYC because these big boys bring jobs to the city, and the employees often don't even think about their income on a tax adjusted basis until it's too late. So the burden is effectively shifted onto the employees. Win win for the city and the big corporations.

But if you're a little company, it's important to understand what UBT and GCT are!

[ryan_gz]

So NY State income tax ranges up to 8.82% at the top bracket, and NYC personal income tax ranges up to 3.876%. If you run a small business that's structured as a pass-through entity (i.e. LLC, S-Corporation, Sole Proprietorship) you pay another 4% in NYC UBT tax.

That's 16.696% right? Or am I crazy? I realize there are probably arcane exemptions and offsets etc. but that's the math no?

And from the extensive research I've been doing Florida and Miami in particular really doesn't have any state or local income tax, nor any sort of tax on pass-through businesses. So if you run a small business in Florida vs New York City, you're saving essentially 16.7% of your income in taxes?

That is insane. Truly. How is this allowed? Why are there small businesses that still operate in New York given the differential?

[showtime]

It’s allowed because people want to live in NYC. Studies show that people generally move for job opportunities and family reasons, and the local tax code is not at the top of most people’s priorities.

I’m not saying it’s right, but the reason NYC gets away with it is probably because there are more exciting job opportunities in NYC vs say Wyoming.

Plus, you have to think about opportunity cost. What’s the point of living in a low cost state if you can’t make any money? No tax and no income is pointless.

If you run your own business, think about all the spending power in NYC. Where else can you charge $30-40 for a plate of pasta? Where else can you get people to over pay you for basic services like baby sitting or cleaning windows?

Furthermore, if you work with people at all, there’s just more people here. You can find more employees, contractors, suppliers, clients and talent in general in a big city like NYC.

So it’s all relative. But hey, if you can make it work in Florida then do it. Just don’t get bored, because it’s easy to forget all the interesting nightlife, restaurants, bike paths, parks and cultural activities that this great city offers.

[hadi]

The job opportunities point is really a bit of a scam imho. The big corporations get cut these sweet tax breaks for setting up shop in the city, which in turn attracts job seekers to NYC.

Said job seekers are typically too naive to even think about the high cost of living in NYC and income taxes, and get sucked in by the higher gross income they’re offered for NYC positions.

In the end, the job seekers can’t leave because they’re tied to their job and end up paying a heavy share of the taxes. The corporations are happy because of their tax breaks, and the city is happy because they’re getting more tax revenue.

Employees and small businesses are the schmucks who get creamed.

Of course, the real estate families with their depreciation and negative income tax liabilities and the asset rich get to enjoy NYC because they’re already rich, and don’t need to worry about making income. And any investment income is taxed at half the rate of active working income!

That’s it for my rant. But I wish the media would report on this. It’s FUBAR.

[lando]

Thank god for this article. I have literally tried to Google this topic about 10-20 times before coming across this. For some reason, there's no article out there that addresses this topic. Does Miami Florida have a city or local personal income tax or not?

It's a simple question, and I think an often asked question by New Yorkers considering a move to sunny Florida. The closest thing I was able to find was a miscellaneous Real Deal article about wealthy hedge fund guys from the Northeast flocking to Miami. Makes sense. You really could buy yourself a free mansion with the tax savings. I truly don't get it - why stay and get harassed all day by potholes, bums and panhandlers. Or deal with constant construction, and not the productive kind either, but having city work crews tear up your cobblestone streets over and over again. Multiple times in the same year. Why? To provide work and handouts to De Blasio's voting base.

I've truly had it!

[showtime]

Guys, to be fair, New York City does have a lot to offer, high taxes and all. There is tons of diversity. You can probably find more diversity in 10 blocks in Manhattan vs all of Texas or Florida outside of Miami.

Also, there's the convenience and lifestyle factor. Easy transportation, access to business, job and dating opportunities. Lots of entertainment options and endless restaurants to choose from. And it's nice to feel like you're at the center of it all.

So yes the taxes are high, but I feel you certainly give some of the above up if you move.

Perhaps it's best to just be rich and make no income, but still live in NYC. I'm sure that's what a lot of people do :-)

[avajabs]

The only downside of moving to Miami is global warming it seems. There was a front page WSJ article today about how waterfront properties nationwide have appreciated way less, or in some cases stagnated vs properties based a little further inland.

I guess the constant repairs necessary when flooding happens, and the high cost of flood insurance really makes people want to pay less. Pure supply and demand.

I also heard from a local in Miami that it's a buyer's market in Miami Beach, but there are tons of new developments in downtown Miami. How things have changed!

[hadi]

There's a saying, NYC is for the old and rich and the young and poor. But not for anyone in between or anyone who is industrious. Not unless you enjoy being a wage slave and a sharecropping lifestyle, and paying substantially more than half of what you make in income in taxes of all sorts added up.

Meanwhile, the truly wealthy just smirk. What income? What does income matter when you have wealth? And rental property that you can depreciate and have paper losses? There's a whole bunch of guys smiling right now who had negative income last year from all that investment property depreciation, oh and maybe also that loss from unrisked capital (commercial investment, borrowed 90%, write the whole thing off). Or how about next year, perhaps they decide to drip $100,000 in income. So what. They dare you to raise income taxes to 70%, 90% ... they don't care.

Tax 90% of $100,000 in income they allowed to leak through. Next year they'll manage their income as to be negative. And there will still be $10 billion in post tax and unrealized capital gains. Enjoy that $90,000! Do you see what a joke this whole income tax regime is, and how regressive it is? See below for an excellent thread I found (link below) which explains why income taxes are the most regressive scam ever played upon the American people.

The middle class will continue to pay like it always has, and it's incredibly sad.

[Dendiox]

As far as I know New York and Florida have state corporate income taxes.

[showtime]

Yea Florida unfortunately does have a corporate income tax of 5.5%, though pass-through entities pay zero tax because Florida has no income tax.

New York of course is worse from a taxation standpoint. New York "doesn't recognize" S corporations, so S corporations as well as C corporations are subject to corporate income tax (GCT & BCT). These tax rates are up to 8.85% for non-financial corporations, and 9% for financial corporations.

Real harsh!

[HauseitAdmin]

No, Miami does not have a local or city income tax because levying an income tax is against the State of Florida's constitution. As a result, no one in Florida pays state or local income tax regardless of which Florida county they live in.

With that said, as with many areas, Floridians do pay transfer and other related taxes when buying and selling real estate: https://www.hauseit.com/closing-cost...er-in-florida/

However, closing costs for buyers are generally lower than they are for NYC: https://www.hauseit.com/buyer-closing-costs-nyc/