TAMPA TAXES

AD VALOREM Ad Valorem taxes on real and personal property in Florida are assessed locally by counties and municipalities. There are no state level ad valorem taxes in Florida.

In most counties, ad valorem tax rates (millages) are set once a year by the Board of County Commissioners, the independent taxing Authorities (schools, port, etc.) and the respective City Councils of the three municipalities. The total millage due varies by taxing district depending on the government services provided. However, within a single taxing district there is only one millage that applies to all types of property. Businesses do not pay different millage rates than individuals. Every legal entity pays the same millage rate. Commercial and non-homesteaded properties are assessed equivalent to the “highest and best use” of that property, and do not qualify for the 3% cap on the annual growth of the property valuation reserved for homesteaded residential properties only. Residential properties that qualify for homestead exemption status also receive an automatic $25,000 deduction off of their annual property valuation. (This is all subject to change depending on the outcome of the vote on January 29th, 2008)

Millages for each year are normally finalized during September of each year in preparation for the start of a new fiscal year October 1. The final rates for all municipalities and the county are published annually during October by the Tax Collector's Office The total millage rates for Tampa Bay Golf and Country Club is 15.36 mills. One mill equals $1 of tax per $1000 of assessed valuation (explained below).

Property taxes are normally due and payable on November 1 of each year which is about 30 days after the tax rates are finalized for that year. However all property owners are given until April 1 of the following year to pay the tax without penalty or interest. A sliding scale of discounts (savings) can be taken depending on how soon the taxes are paid in full after the November 1 notice. Taxes paid in full during November are entitled to a 4% discount from the rates above. Taxes paid in December, January, February and March receive 3%, 2%, 1% and 0% discount, respectively. Higher discounts up to 6% are available if quarterly installment payments are made during the year.

ASSESSMENTS, REAL, & PERSONAL PROPERTY

Separate annual assessments of real and tangible personal property are made by the Property Appraiser's Office.

All owners of real property (land and buildings) are assessed annually. This includes both businesses and individuals.

Only businesses are assessed for tangible personal property. This group includes all proprietorships, partnerships, corporations, self-employed agents and contractors. Individuals do not pay this tax on their personal property.

REAL PROPERTY: Land and buildings are individually assessed each year by the Property Appraiser's Office. The appraiser uses three approaches to determine the annual assessment: Market Approach - the current market value if the property were to be sold today. Cost Approach - what it would cost to replace the facility, less depreciation for age and condition. Income Approach - the present value of the income stream that would be derived if the facility were to be leased. All three approaches are used to arrive at a coordinated valuation for every commercial and industrial property each year.

However, if a specific facility was sold in an arm's length transaction very recently, the price paid will be the primary factor in the new fiscal year assessment. In this case, the price paid will be compared to the prices paid for similar facilities in the same fiscal year; if the price is in line with the others like it, the price paid will become the basis for the new assessment.

Basis for tax: The annual assessment amount above is called "Just Value". The Florida Statutes pertaining to property taxes presume that this Just Value includes some costs that are not intrinsic to the land and buildings, such as broker's fees, closing costs, etc. These other costs are called "1 through 8 criteria" and by Florida law must be subtracted before arriving at Taxable Value. The amount of adjustment is shown on the annual assessment statement mailed to each property owner by the county's Tax Collector's Office, usually in August of each year.

TANGIBLE PERSONAL PROPERTY: Each business must file an annual Tangible Personal Property return with the Property Appraiser's Office. This consists of a report of ownership of items like furniture, fixtures, equipment, vehicles, etc. This return is due April 1 of each year based on tangible personal property owned as of January 1 of the previous year.

Most tangible property assessments are based on the "Replacement Cost New less Depreciation" (RCNLD) method. Each business reports the original cost of tangible property. Then an inflation factor (CPI) is applied to determine the approximate cost of that item today. Then depreciation is deducted based on the economic life of the item in question. Each Florida County determines its own factors for economic life but they must follow Florida State Department of Revenue rules and regulations.

In most counties, the presumed economic life (also called useful life) of items like computers and hand tools is three to five years, so their valuation and corresponding tax falls much faster than items like furniture which have an assigned life of 10 years. In times of zero or minimal inflation, the assessment is basically original cost less depreciation.

The State of Florida issues a guideline for counties to use in assessing the useful life of tangible property. However, counties are allowed to vary from the state Useful Life Table if local evidence supports a different assessment method.

If warranted, other methods of assessing the current value of tangible personal property may be used if authorized by the Property Appraiser's Office.

Production/Non-Production Equipment/Tooling. The assessment rate of this tax is the same for all types of property. However, the assigned economic life varies for each type of personal property. In general, durable items like furniture and machinery carry an economic life of 10 years. However there are many specific categories within these broad areas that have different economic lives, almost all of which are less than 10 years.

Inventories. Since 1981, the Florida legislature exempted all categories of goods held for resale from ad valorem taxes. Florida Statute 196.185 provides that all types of inventory are exempt. This included raw materials, goods-in-process and finished goods.

Pollution Control Equipment. In order to promote installation of pollution control equipment, Florida Statute 193.621 allows Florida counties to offer exemptions from ad valorem taxes for pollution control equipment. The amount of exemption varies from county to county. A requirement of obtaining this exemption is that the main purpose of the equipment be for control, not monitoring. Therefore a stand-alone monitoring system does not qualify for this provision.

INTANGIBLE PERSONAL PROPERTY The State of Florida imposes an intangible tax that is handled by filing an annual intangible tax return directly with the State. Corporations, affiliated groups, partnerships, and fiduciaries have an annual tax of $1 per $1000 of value of stocks, bonds, accounts receivable and other taxable securities. As of 2001, all of accounts receivables arising out of the normal course of trade or business are exempt from the intangible tax. Banks and Savings & Loans are annually taxed $1.00 per $1,000 of value on stocks, bonds, accounts receivable and other taxable securities. Cash is not taxed. Other exemptions are certificates of deposit, U.S. government issues, real estate, retirement funds and Florida municipal and local bonds. Both individuals and businesses are assessed this tax, however individuals receive an exemption on the first $20,000 of intangibles and are assessed $1 per $1000 of intangible assets. Businesses do not receive the $20,000 exemption.

There is a non-recurring intangible tax on mortgages and documents secured by Florida real estate. The tax is $2 per $1,000 at recordation. The Florida Department of Revenue administers all intangible taxes.

CORPORATE INCOME TAXES Florida's corporate income tax is imposed upon all corporations doing business in the state. The rate is 5.5% of Florida's portion of Federal taxable income, less an exemption of $5,000. Florida's corporate income tax rules are piggy backed to the Internal Revenue Code of January 1, 1990. The Florida rate for the Federal Alternative Minimum Tax is 3.3%. The Florida Department of Revenue administers the corporate income tax.

Florida Investment Tax Credit Program provides an annual investment credit against the corporate income tax for up to 20 years in an amount up to 5% per year of the eligible capital costs generated by a qualified project (Qualified Target Industry Tax Refund Program eligible projects). In order to qualify, projects must be in a designated high impact sector (silicon technology, transportation equipment manufacturing, information technology), create at least 100 new jobs in Florida, and make a cumulative capital investment of at least $25 million.

UNEMPLOYMENT AND WORKERS COMPENSATION Unemployment Compensation is a federally levied tax but assessed and collected by each state. Florida limits the amount of taxable payroll to the first $7,000 of wages per employee. New employers receive an initial assessment rate of 2.7 %. After the initial period, the assessment rate is adjusted up or down, according to a fixed assessment method which uses the business's ratio of unemployment claims to taxable payroll. That figure is then statistically standardized and weighted against State totals, and factored by a quotient reflecting the solvency of the State Unemployment Compensation Trust Fund. Currently, the range of Unemployment Compensation Rates is 0.1% to 5.4% of the first $7,000 of taxable payroll.

Worker's Compensation, an additional federally mandated business expense for Florida employers is the cost of Worker's Compensation Insurance. This cost varies widely for employers because the insurance premium is based upon the type of work and the individual risk of injury placed upon that type of work. The individual injury experience of the employer is also factored in, by the use of an experience modification factor. So, the safer an employer can make its workplace, the lower these costs can be. Over the past several years, reforms to the Worker's Compensation Law have reduced risk classification rates, lowering the cost of Worker's Compensation Insurance for many employers in Florida. A discount of 5% is available to companies that are certified as a drug-free workplace.

SALES AND USE TAXES Sales Tax Over 60 percent of Florida's general tax revenue is generated from sales tax collections. Statewide, the sales tax rate is six percent, plus additional local option sales taxes which are capped at one percent.Pasco County's sales tax rate is 7%. Hillsborough County levies an additional one-half percent to provide indigent health care in the county. Another optional one half percent has been approved by Hillsborough County voters in September, 1996 as a Community Investment Tax to support public construction, schools, and a new stadium. Thus, the current total sales tax percentage in Hillsborough County is 7%.

Not all items are subject to sales tax. Among the exemptions, groceries and medicines are very significant for individuals. For businesses, all materials incorporated in a final product plus containers and packaging are exempt. Of special interest to office operations, purchases of custom software are exempt from payment of sales tax. All materials included in a final product, containers, and purchases by government and qualified non-profit organizations are also exempt. Other exemptions include electricity used in manufacturing, pollution control equipment, machinery and equipment for new business, and industrial machinery and equipment purchased for an expanding business. Certain industries are exempt from taxes of labor charges for repairs of industrial machinery and equipment. There are many other exemptions for specific goods and services. The Florida Department of Revenue should be consulted for exemption eligibility for a particular business or employer.

Businesses that are located in Enterprise Zone and/or employ an eligible resident of an Enterprise Zone area or eligible WAGES participant earn Job Tax Credits which can be applied toward Florida corporate income taxes or Florida sales taxes.

Gasoline and Fuels Tax All gasoline is taxed on a per gallon basis. The tax consists of a state portion and a local option portion levied by counties. By state law, pump prices already include all taxes. Currently the total gas tax in Hillsborough County is 47.0 cents per gallon on motor fuel and 53.0 cents per gallon on diesel.

Occupational Licenses Occupational license fees are assessed on most businesses by counties and municipalities in Florida. In some cases the state also has licensing requirements for certain businesses. However, the total costs for these licenses tend to be modest. For example, Hillsborough County's occupational license fees range from $15 to $1350 total per year depending on how many employees the company has.

Tourist Development Tax Tourist development tax of 2% is levied on the rental of hotel/motel accommodations with in the County to support the tourist development activities. The tax also applies to the rental of accommodations in a hotel, apartment hotel, motel, resort motel, apartment, apartment motel, rooming house, mobile home park, recreational vehicle park or condominium if rented or leased for six months or less. Patrons of hotels, motels, inns and similar establishments pay a sales tax of 5% to support tourist development activities. This is in addition to the regular sales tax. Other types of businesses, such as manufacturers, do not charge this tax. This is in addition to the regular sales tax.

Documentary Stamp Tax A State Documentary Stamp tax is assessed on deeds, mortgages and other recorded documents by all counties in Florida. Recording deeds are taxed at $.70 per $100, and recording mortgages are taxed at $.35 per $100.

Utility Tax Many municipalities in Florida assess a tax on utilities using various rates and methods.