No income tax: what that does and does not mean

A Florida resident files one income tax return, the federal one. There is no state return to attach, no state estimate to pay in April, June, September and January, no state refund to wait for, and no state withholding box on the W-2 that needs checking. The Florida Constitution forbids a tax on the income of natural persons, Article VII, section 5, and the legislature cannot change that without sending an amendment to the voters. Wages, pensions, Social Security, IRA withdrawals, capital gains, rental profits, lottery winnings and unemployment all go on the 1040 and stop there.

That is the easy half. The other half is that the state still has to be paid for, and it is paid for with taxes that do not show up on any income tax return: a 6% sales tax with a county surtax on top, property tax administered county by county, a documentary stamp tax every time a deed or mortgage is recorded, and a tourist tax on short-term lodging. A Floridian who has never seen a state income tax bill has paid the state at the register, at the closing table and in the November property tax envelope. The rest of this article is about where the absence of an income tax shows up on the federal return, and where it does not.

What the federal return looks like without a state tax

The only line on Form 1040 that cares which state you live in is the state and local tax deduction on Schedule A, line 5. A taxpayer who itemizes deducts either state and local income taxes or state and local general sales taxes, never both, plus property taxes, up to the cap. For a resident of Georgia or New York, the income tax is usually the biggest piece. For a Floridian there is no income tax to deduct, so the SALT line is built from two things: property tax on the home and other real estate, and the sales tax election. The box on line 5a has to be checked for sales tax; software that carries a prior state’s habits forward sometimes leaves it unchecked and deducts nothing.

The cap matters more than it used to. For 2026 the SALT deduction is limited to $40,400 on a joint or single return, $20,200 married filing separately, and it phases back toward a $10,000 floor once modified adjusted gross income passes $505,000. A Florida couple with $9,000 of property tax and $2,500 of table sales tax is nowhere near the cap, and the question for them is whether itemizing beats the standard deduction at all. Many Floridians, especially retirees with a paid-off homestead and a mortgage-free balance sheet, take the standard deduction and the SALT line never comes up.

Everything else on the federal return is identical for a Floridian and a Minnesotan. The senior deduction, the tips and overtime deductions, the child tax credit, the taxation of Social Security, the capital gains brackets, the net investment income tax, IRMAA surcharges on Medicare: none of them know or care that Florida has no income tax. The common misreading is that moving to Florida lowers the federal tax. It does not. It removes the state tax, which for someone leaving a 5% to 10% state is a real number, but the federal bill on the same income is unchanged.

The sales tax election

Because Florida has no income tax, an itemizing Floridian always elects sales tax on line 5a; there is nothing to compare it against. The IRS lets the taxpayer use actual receipts or an optional table built from income, household size and the state and local rates. Almost everyone uses the table, through the worksheet in the Schedule A instructions or the Sales Tax Deduction Calculator at IRS.gov/SalesTax. The local rate entered is the county surtax where the taxpayer lives, from 0% in Citrus and Collier to 2% in Hamilton (verify), so two households with the same income in different counties get different table amounts.

On top of the table amount the instructions allow the sales tax actually paid on a few large purchases: a motor vehicle, including a leased one, a boat or aircraft, and a home or the building materials for one, as long as the tax was charged at the general rate. For a Floridian who bought a car in 2026, the 6% state tax on the purchase price, plus the county surtax on the first $5,000 of it, is added to the table figure. Keep the bill of sale. It is the one sales tax receipt worth saving.

What Florida still files, and what it does not

No state income tax means no state income tax return, extension, estimates or refund for an individual. It does not mean the Florida Department of Revenue never hears from a Floridian. The department administers sales and use tax, reemployment tax, the documentary stamp tax and the corporate income tax, and some of those reach ordinary people:

• An owner who rents a Florida property for six months or less at a time is a dealer for sales tax purposes and must register, collect the state tax and surtax, and remit it, plus the county tourist development tax where one exists. Details are in Short-term rentals.
• A Floridian who buys something out of state or online without paying Florida sales tax owes use tax on it, reported on Form DR-15MO. It is widely ignored on small purchases and routinely enforced on boats, aircraft and vehicles brought into the state.
• A sole proprietor with employees registers for reemployment tax; a business selling taxable goods registers for sales tax. Neither is an income tax, but both are state filings with due dates and penalties.
• A Florida corporation, including an S corporation in a few circumstances, files a Florida corporate return. The ordinary S corporation with no built-in gains or federal tax at the entity level files nothing.

Then there is the property tax, which is not a Department of Revenue tax at all. It is assessed by the elected property appraiser in each of the 67 counties and collected by the elected tax collector. The one filing almost every Florida homeowner makes with the state is not a return but an application: the homestead exemption, due March 1 on Form DR-501, which starts the Save Our Homes assessment cap. Missing it is the single most expensive paperwork mistake a new Floridian can make. See Homestead and Save Our Homes.

Who actually gains from the move

The savings from relocating to Florida are the old state’s income tax on the income that will continue after the move. For a working household from New York, New Jersey, California or Minnesota, that can be a five-figure number every year. For a retiree whose income is mostly Social Security and whose old state exempted it, the saving is small. For a retiree from a state that taxes pensions and IRA withdrawals in full, Florida saves the state rate on every dollar withdrawn, which is why large IRA balances and Roth conversions are so often timed to the year after a move south. The arithmetic for retirees is in Retiring to Florida.

Two costs offset the saving. Florida property tax on a newly purchased home is figured on the full purchase price, with no Save Our Homes history to cap it, and in the coastal counties the effective rate on a new buyer runs well above what a long-time owner next door pays. And the old state does not always agree that the taxpayer has left. New York, Illinois, Minnesota, California and others audit domicile changes, and a part-year or nonresident return to the old state is usually required in the year of the move. That is covered in Moving to Florida.