Below is an anonymous comment on a “how to make Florida your resi- dence” blog:

1. May 2013
State Income Tax?
Below is an anonymous comment on a “how to make Florida your resi-
dence” blog:
First thing you do is go to a UPS store and rent a box. Do not get a US
Postal Service mailbox as this will not work. Once you do that, go to
the nearest bank and open an account using the UPS store address.
Make one small change to the address. Don’t say Box #, say Suite #.
Take your new bank book or whatever ID card they give you and go to
the DMV. Tell them you just moved to Florida. When they ask for proof, you have a bank statement. Now
you have a Florida Driver’s License. Next you get insurance on your vehicle. Then back to DMV with your
drivers license and proof of insurance and you register your vehicle using your new address. Change the ad-
dress on your bills to the new Florida address. The UPS store will forward them to you as often as you want
for a fee. Congratulations, you’re a Floridian and your home state can’t touch you.
I am not endorsing this idea, but I have no doubt someone somewhere is doing just this to avoid their home state
income taxes.
At $7,000 in income, GA’s top state income tax rate of 6% kicks in. Most of us pay the maximum rate. For many
years now, large numbers of people from places with state income tax have retired to states with no income tax;
Florida and Texas are two prime examples. The warmer climate adds to the allure, and in Texas gas and oil reve-
nues help. How do our neighboring states stack up? The maximum state tax rates are as follows: Alabama 5% /
Florida 0% / North Carolina 7.75% / South Carolina 7% / Tennessee 6% (only on interest and dividend income).
They all have varying rates of sales tax. The Tax Foundation’s State Business Tax Climate Index ranks Georgia
29th out of 50. We are close to the middle nationally; but we are ranked worse than 4 of our 5 neighboring states
with Alabama ranked 19th, Florida 5th, Tennessee 22nd and South Carolina 26th.
The last state to do away with income tax was Alaska in 1980. Once again, energy revenue made their decision
easier. (TaxFoundation.org) State Representative Tom Kirby introduced a bill to end Georgia’s income tax system
and replace it with an increase of the sales tax from 4 percent to 7 percent. (cbsatlanta.com) This bill was introduced
so late in the session it kind of looks like a trial balloon for everyone to mull over until next year, when it might gain
some momentum. Arguments on both sides of this issue have already been circulating.
Corporate taxes are a whole other argument. There are so many tax breaks, exceptions, etc. it is hard to see a true
advantage for one state over another.
Retirement income is the most important issue driving retirees’ and po-
tential retirees’ plans. Giving up 6% or more to your home state can influ-
ence many decisions. The State of Florida has certainly been a beneficiary
of an influx of many new retirees. The amount of money you keep after
taxes makes relocating that much easier.
Thanks,
Andy McClung, CFP
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Source the Wall Street Journal 05/02/13
Andy McClung, CFP®
Maximum Wealth Management Inc.
295 Culver St., Suite C
Lawrenceville, GA 30045
PHONE (770) 381-7155
E-MAIL Andy@AndyMcClung.com
WEBSITE AndyMcClung.com
Maximum Wealth Management Inc. is a Registered Investment Advisor.
Andy McClung, Certified Financial Planner™, owner of
Maximum Wealth Management Inc., an advisory services firm
with over $25,000,000 under management.