2003 June – Backgrounder #40 – Flor⁠i⁠da’s In⁠t⁠ang⁠i⁠bles Tax: The Case for Repeal

By: The James Madison Institute / 2003

Executive Summary
• Florida’s intangibles tax is a tax on certain financial assets, including stocks
and bonds.
• The intangibles tax raises a relatively small amount of revenue. It is forecast
to raise about $600 million in fiscal year 2003-04, out of a total state budget
that will exceed $50 billion. Revenues from the intangibles tax finance
about 1.2 percent of total state expenditures.
• A tax on intangible financial assets has some similarities to a tax on income
from those assets. While income taxation is prohibited by the Florida Constitution,
an intangibles tax gets around that restriction by taxing the wealth
on which income is earned.
• The tax places a significant reporting burden on some individuals. This is
the only Florida tax that requires individuals to fill out a tax form.
• The tax discriminates against those who earn investment income as opposed
to labor income. This group includes wealthy people and retirees, who in
general contribute more to the finances of Florida’s government than they
take away.
• Because it is a tax on investment, the intangibles tax discourages economic
• If the tax were completely eliminated, state government expenditures would
still increase because the revenues lost would be more than replaced by the
normal growth in the state’s other revenue sources.
• Florida’s economy and its state government would fare better if the intangibles
tax were repealed.