Does Florida have an estate tax? The answer is no, currently Florida does not collect a state estate tax, although things were different prior to January 1, 2005, when Florida, like many other states, collected a separate state estate tax, called a "pick up tax," that was actually equal to a portion of the overall federal estate tax bill.
While I've lived in Florida since 2004, it still surprises me how many people mistakenly believe that Florida never collected an estate tax - yes, it did! - until January 1, 2005, when the pick up tax was officially phased out under the provisions of the Economic Growth and Tax Relief Reconciliation Act ("EGTRRA"). In response to this change in federal law, some states that used to collect a pick up tax chose to enact laws that allow the state to still collect a state estate tax. But Florida, like Alabama and Nevada, would require a constitutional amendment to allow the state to enact a separate state estate tax, so don't expect Florida to begin assessing a state estate tax any time soon.
Of course, not so fast, because the pick up tax just might come back. Under EGTRRA the federal estate tax is scheduled to completely disappear in 2010, but then the provisions EGTRRA will sunset so that the estate tax, along with the pick up tax, will come back on January 1, 2011. But no one really believes that Congress and President Obama will allow EGTRRA to sunset. Instead, it is anticipated that at the very least a two or three year patch will be enacted that will keep the federal estate tax in place and possibly bring back the pick up tax, which has already been proposed by H.R. 2023, introduced by Rep. Jim McDermott (D-WA) in April 2009.
2011 Update: On December 17, 2010, President Obama signed the Taxpayer Relief Act of 2010 (TRA 2010) into law, which overrode the provisions of EGTRRA with regard to estate taxes. As a result of this new law, the pick up tax was not reinstated, and so Florida will not collect a state estate tax for the 2011 and 2012 tax years. Nonetheless, the provisions of TRA 2010 are set to sunset on December 31, 2012, in which case the pick up tax, as well as the Florida estate tax, will return on January 1, 2013. Stay tuned for updates as they become available.
- Understanding Death, Estate and Inheritance Taxes
- What is the Pick Up Tax?
- Which States Still Collect a State Estate Tax?
- Does Florida Collect an Estate Tax?
- Information on the Florida Estate Tax - from the Florida Department of Revenue
- State Estate Tax and Exemption Chart
- State Inheritance Tax Chart
- What is the Future of the Federal Estate Tax?
- Estate Tax Repeal Update - Predictions About the New Law