New to Florida? Your Tax Planning Checklist

Florida has no state income tax. No tax on wages, retirement income, Social Security, or investment gains at the state level. For someone moving from New York, New Jersey, California, or Illinois, that difference can add up to tens of thousands of dollars a year.

But the savings are not automatic. Your old state will not simply let you go. High-tax states aggressively audit former residents who claim to have moved — and if they can show you still have significant ties there, they will continue taxing you as a resident.

Here is what you need to do to establish Florida domicile properly and protect your tax status from day one.

Step 1: Understand What Domicile Actually Means

Residency and domicile are not the same thing.

Residency is where you physically live. Domicile is your permanent legal home — the place you intend to return to, the place that is the center of your life.

For tax purposes, your domicile determines which state can tax your income. You can only have one domicile at a time. To establish Florida as your domicile, you need to demonstrate that Florida is your permanent home — not just a place you spend part of the year.

This matters because states like New York have a "statutory residency" rule: if you maintain a permanent place of abode in New York and spend more than 183 days there in a year, New York can tax you as a resident regardless of where you claim to be domiciled. The rules vary by state, but the principle is the same — your old state will look for reasons to keep taxing you.

Step 2: Take the Legal Steps to Establish Florida Domicile

These are the concrete actions that establish Florida as your legal home. Do them as soon as possible after moving.

Get a Florida Driver's License

This is one of the clearest signals of intent to establish Florida domicile. Surrender your out-of-state license and get a Florida license within 30 days of becoming a Florida resident.

Register Your Vehicles in Florida

Transfer your vehicle registrations to Florida. This is another concrete step that demonstrates your intent to make Florida your permanent home.

Register to Vote in Florida

Update your voter registration to Florida. Cancel your registration in your old state.

File a Declaration of Domicile

Florida allows you to file a Declaration of Domicile with the Clerk of Court in your county. This is a sworn statement that Florida is your permanent home. It is not legally required, but it creates a dated, official record of your intent — which can be valuable if your old state ever questions your domicile change.

Apply for the Homestead Exemption

If you own a home in Florida and it is your primary residence, apply for the Homestead Exemption with your county property appraiser. In Sarasota County, you can apply online or in person. The exemption reduces your assessed value by up to $50,000 for property tax purposes and also triggers Save Our Homes protection, which caps annual increases in assessed value at 3% or the rate of inflation, whichever is lower.

The deadline to apply for the Homestead Exemption is March 1 of the tax year in which you want the exemption to apply. If you move to Florida in the fall, apply before March 1 of the following year.

Update Your Estate Planning Documents

Update your will, trust, power of attorney, and healthcare directive to reflect Florida law and your Florida address. This is not just a tax issue — it is an important legal step that ensures your documents are valid and enforceable in Florida.

Change Your Mailing Address Everywhere

Update your address with your bank, brokerage accounts, insurance companies, Social Security Administration, Medicare, and the IRS. Correspondence going to a Florida address reinforces your domicile claim.

Step 3: Reduce Your Ties to Your Old State

Establishing Florida domicile is not just about what you do in Florida — it is also about what you stop doing in your old state.

Sell or rent your old home. Maintaining a home in your old state is one of the biggest red flags for state tax auditors. If you keep a home there, document that it is a secondary residence, not your primary home. Keep records of where you spend your time.

Move your financial accounts. Transfer your primary bank and brokerage accounts to Florida-based institutions or update your address on existing accounts.

Move your safe deposit box. If you have a safe deposit box in your old state, move its contents to Florida.

Update your professional relationships. Change your primary doctor, dentist, and other professionals to Florida providers. This is a quality-of-life step that also supports your domicile claim.

Track your days. Keep a log of where you spend each night. If your old state has a 183-day rule, you need to be able to demonstrate that you spent fewer than 183 days there. A simple calendar or travel log is sufficient.

Step 4: Understand What Florida Does and Does Not Tax

Florida has no state income tax, but it does have other taxes you should be aware of.

Sales tax — Florida's state sales tax rate is 6%. Sarasota County adds a 1% surtax, for a total of 7% on most taxable purchases.

Property tax — Florida does have property taxes, but the Homestead Exemption and Save Our Homes cap provide significant protection for primary residences.

Intangible personal property tax — Florida repealed its intangible personal property tax in 2007. You do not owe Florida tax on stocks, bonds, or other intangible assets.

Estate tax — Florida has no state estate tax. Federal estate tax still applies above the federal exemption amount.

Retirement income — Social Security, pension income, IRA distributions, and 401(k) withdrawals are all free from Florida state income tax. This is one of the most significant benefits for retirees.

Step 5: Plan for Federal Taxes

Moving to Florida eliminates your state income tax burden, but federal taxes remain. For many new Florida residents — especially retirees — federal tax planning becomes more important, not less, because it is the only income tax you owe.

Key federal planning opportunities for new Florida residents include:

• Roth conversions — With no state income tax, the cost of converting traditional IRA funds to a Roth IRA is lower in Florida than in most other states. This can be a significant long-term planning opportunity.
• Required minimum distributions — If you are 73 or older, you must take RMDs from traditional IRAs and 401(k)s. Planning the timing and amount of these distributions can reduce your federal tax bill.
• Capital gains planning — Florida's lack of state income tax makes it a favorable state for realizing capital gains. Timing asset sales to manage your federal capital gains rate is an important planning tool.
• Medicare premium surcharges — Higher income can trigger IRMAA surcharges on Medicare Part B and Part D premiums. Managing your income through careful planning can reduce or eliminate these surcharges.

Get Help From a Sarasota Tax Professional

Establishing Florida domicile correctly is not complicated, but it does require attention to detail and timing. Getting it wrong — or failing to document it properly — can result in your old state continuing to tax you for years.

Katie C. Pepin, CPA, EA has helped many clients make the transition to Florida residency and establish domicile in a way that holds up to scrutiny. If you have recently moved to Sarasota or are planning to, contact Sarasota Tax Planning to schedule a consultation.