We assist clients with Florida intangibles tax planning using partnerships and/or intangibles trusts, as appropriate.

As of  October, 2003, Florida residents remain subject to a 0.1% recurring intangibles tax levied on the fair market value of applicable assets, including stocks, bonds, and other non-exempt investments ("intangibles"), owned as of January 1, 2004, after application of new increased exemptions of $250,000 per person ($500,000 for a married couple filing jointly).  The prior exemptions were $20,000 per person  and $40,000 for a married couple filing jointly.  However, this exemption increase has been delayed once before because of the state budget crunch, and it is possible that last minute legislation may be passed before the end of the year to delay the exemption increase again.

Changes in the intangibles tax law passed in 2000 by the Florida legislature have greatly simplified minimization of the intangibles tax through the use of intangibles trusts.  Under these new rules, no trust is subject to intangibles tax on its assets, even if it is administered by a Florida trustee and the assets are located in Florida.  Florida residents who are beneficiaries of trusts are not subject to the tax either so long as the trust is properly structured.  A properly drafted intangibles trust is specifically designed to prevent its beneficiaries from being subject to the tax. 

An excellent article published in The Florida Bar Journal on the use of intangibles trusts after the 2000 tax law changes is available here.

Intangibles trusts that are structured as grantor trusts do not generally need to obtain taxpayer identification numbers or file trust income tax returns (IRS Form 1041).  The trust's income is simply reflected on your personal income tax return (IRS Form 1040).  The Treasury Regulations permitting this simplified reporting method are discussed in more detail here.