Articles

By: Deb Risik, CPA / Smith & Howard, PC

Getting ready to pack up your Dawg paraphernalia and exchange it for all things Gator? The decision becomes easier this year thanks to the upcoming repeal of the Florida Intangible Tax (effective January 1, 2007 once the governor signs the bill.) Add that to Florida’s absence of income tax, 6-percent sales tax and real estate taxes that can only increase 1 percent a year, and even the least tax-conscious Georgia resident may consider heading south.

So, here’s how it’s done:
You: Know what a resident is for tax purposes. This does not mean that you have to be able to recite the Georgia Code that states, for tax years beginning on or after January 1, 2005, a resident is someone who is a “legal resident” of the state on December 31; resides within the state on a more-or-less permanent basis and has been residing within the state for at least 183 days or part-days out of the immediately preceding 365-day period. People will giggle behind your back if you do that. Just remember there are residency rules in place and once you’ve become a Georgia resident for tax purposes, you’re deemed to remain one until you show you’ve become a legal resident of another state.

Therefore, make your change of residence public knowledge. Don’t hesitate to tell your Georgia friends and neighbors that you’re a Florida resident. List yourself as a Florida resident in your will, legal documents, your passport, and on debt instruments. Exchange your Georgia driver’s license for a Florida driver’s license. Get a Florida hunting license. Affiliate with a church or synagogue in Florida. Register to vote in Florida. Get a job in Florida. Give up your Georgia country club membership and get one in Florida. In simple terms, move there, stay there and intend to remain there.

Your house: A Florida resident needs to have a permanent home in Florida. You’re too big to live in a P.O. box. Buying or renting a home in Florida and living in Georgia does not a Florida resident make in the vigilant eyes of the Georgia Department of Revenue. You must take extra steps such as filing a Florida Declaration of Domicile with your Florida county of residence clerk of circuit court for a nominal fee of $10-$15, and obtaining a homestead exemption for your Florida domicile (and giving up your homestead exemption for your Georgia house.) Use your Florida address on your Federal tax return.

Your stuff: Take your personal belongings with you to Florida and do not store them in Georgia. Open a bank account in Florida. Register and insure your car in Florida. Change your credit cards to your Florida address. Put your valuables in a safe deposit box at a bank in Florida.

Lastly, know this: If you have an aversion to state income taxes and Florida doesn’t work out for you, there’s always Washington, South Dakota, Wyoming, Alaska, Texas, or Nevada ….. and New Hampshire and Tennessee, if you don’t mind paying tax on your dividends and interest and wearing, um, orange.

For further details or a printed copy of this article, please contact Smith & Howard at 404.874.6244.

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This article is written to provide you with an informative summary of this issue. Do not apply this information to your specific situation without additional details and professional advice.