At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. The structure of the partnership would be no different than an out-of-state limited partnership. This is supported by some of the language in a few Florida Department of Revenue technical assistance advisements (TAAs) and some of the language in the now partially obsolete safe harbor rules.9 For example, in a typical education trust for a grandchild, the trustee (not the grandchild) has the discretion to distribute income to the grandchild until a specified age (e.g., 18 or 21), and thereafter the income must be distributed. • The Current Right to Income Neither the statutes nor the Florida Administrative Code explains what constitutes a “current right to income.” However, a plain and literal reading of the statute leads me to believe that a discretionary right in the trustee to distribute income would not satisfy this prong of the test. Welcome to the Florida Revenue Law Library. However, with the repeal of the trustee provisions, one could argue that this would effectively make obsolete the part of the rule in which a grantor could not act as trustee. 98-000040 Barnett Banks, Inc., Successor By Merger To First Florida Banks, Inc. vs. Department Of Revenue; 88-004100 Murray Kramer Corporation vs. Department Of Revenue • Other Trusts Not Subject to the FIT Other implications of repealing the trustee provisions are enormous. The recurring Annual Intangibles Tax (Florida Statutes, Chapter 199) will not be addressed in this handbook. An issue that muddies the water is what effect does what this author calls the “regulatory rule” have on this? On February 7, 2019, the Florida Department of Revenue issued a comprehensive report addressing the Tax Cuts and Jobs Act and how the changes in the Act affect Florida corporate taxpayers. The other good news is that the tax is essentially voluntary, and can be avoided by using either the FLITE trust or an out-of-state limited partnership. The report also provides estimates of the fiscal impact of certain provisions of the TCJA. See generally Fla. Stat. One benefit of this is that it is usually easier to coordinate efforts with in-state trustees versus out-of-state trustees. The bigger issue to address is whether the use of a FLITE trust in combination with a family limited partnership would trigger any adverse federal income tax ramifications. State sales tax needs to be paid for internet or other out-of-state purchases, even if no tax … If the senior family member is a Florida resident, it would be very difficult for the senior member to give up control for intangible tax purposes, yet retain control of the partnership otherwise. ET, at 1-800-352-3671 (in Florida only) or 904-488-6800. Browse Categories. If the taxpayer is married, the spouse could serve as trustee. Florida's intangible personal property tax is an annual tax based on the current market value, as of January 1, of intangible personal property owned, managed, or controlled by Florida residents or persons doing business in Florida. The purpose of the article is not to enumerate the lists of intangible personal property. 203 (b) Amounts considered compensation include deferred compensation, value of board, rent, housing, lodging, and other benefits or services furnished to employees by the taxpayer in return for personal services provided that such amounts constitute income to the recipient under the Federal Internal Revenue Code. §2056(b)(7), where it provides an income interest for a surviving spouse. ~ From the Rules Regulating The Florida Bar, The American Influence on International Commercial Arbitration: Doctrinal Developments and Discovery Methods. Law Tax As a result of recent changes to the Florida Intangibles Tax (FIT), the legislature has all but repealed the FIT. Chapter 199, Florida Statutes (F.S. Department of Revenue : 12C : Corporate, Estate and Intangible Tax View Individual Chapters: ... Department of State; Under Florida law, E-mail addresses are public records. The issue is not crystal clear; however, planners would probably be better suited to avoid the issue in the first place by creating irrevocable trusts and not providing prohibited powers in the trust, if at all possible.11 • Section 2041 Power As indicated above, this author believes that the §2041 power requirement was designed to deal with situations related to trusts when the grantors were not the beneficiaries. Most individuals pay this tax each year on a routine basis in the same way they pay their annual federal income tax obligation. Employer Links. Thus, a partnership could create and fund a FLITE trust to avoid any FIT that the partnership would otherwise be subject. Not all states require intangible tax on loans, and those that do can vary in the amount. Under Tax Information, click on Reemployment (Unemployment Tax). One of the tax benefits under the current federal tax laws is that the taxpayers could receive significant discounts for estate and gift tax purposes. Thus, the author, siding on the side of conservatism, would advise the taxpayer not to be his or her own trustee of his or her FLITE trust. If the beneficiary and the grantor are different, one merely reviews the trust provisions to determine if the beneficiary has a current right to income coupled with the §2041 power. Accordingly, some believe that the period should be no shorter than a month. In no event will the tax be calculated on an amount greater than the fair market value of the collateralized Florida real property. Examples of this would include the qualified terminable interest property (QTIP) trust,20 the typical applicable credit trust (also sometimes still referred to as the credit sheltered trust, the $600,000 trust, or the family trust),21 GST-exempt dynasty type trusts, and charitable remainder trusts. Further, by definition, the trust could not give the surviving spouse a §2041 power, otherwise it would not qualify as a QTIP trust. 17 This assumes that the trusts were properly crafted and that the trusts last for more than one year. Florida Revenue Law Library. This column is submitted on behalf of the Tax Section, Marvin Gutter, chair. , on all sorts of investments reason for this tax is $.20 per $ 100 of value TIP. The rules were issued, many practitioners reduced the time that this article not... Made reference to “ foreign ” trusts and 199.052 ( 1999 ) ; supra. Which will clarify this issue at 850-488-6800 and select the `` general information '' option the reason for tax! 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