Florida and Texas both skip personal income tax, so the real question in any Florida vs. Texas taxes comparison is what happens to everything else. Texas wins on property purchases and fuel. Florida wins for long-term homeowners, for many small business owners, and for anyone who pays regularly for services. Which state actually costs you less depends on what you own, how your business is structured, and where your money goes each month.
Personal Income Tax: A Tie
Neither state taxes wages, dividends, interest, capital gains, retirement distributions, or pension payouts. Both protections sit in the state constitution.
Florida’s constitution, revised in 1968, prevents the state from taxing individual income beyond what could be credited against a similar federal tax, and because the federal government no longer offers such a credit, the practical effect is a complete prohibition.1FindLaw. Florida Constitution Art. VII, 5 – Estate, Inheritance and Income Taxes Texas voters went further in 2019, approving a constitutional amendment that flatly bans an individual income tax.2Justia. Texas Constitution Art. 8, Sec. 24 – Personal Income Tax
Neither state imposes an estate tax or inheritance tax either.1FindLaw. Florida Constitution Art. VII, 5 – Estate, Inheritance and Income Taxes For income and inheritance, the two states are functionally identical. Everything else is where the money actually moves.
Property Tax: Where the Biggest Difference Lives
Texas has one of the highest effective property tax rates in the country at roughly 1.40%, ranking seventh nationally. Florida’s effective rate is about 0.78%.3Tax Foundation. Property Taxes by State and County, 2026 On a $400,000 home, that gap is roughly $2,500 more per year in Texas before exemptions.
Texas cushions the blow with a $100,000 mandatory homestead exemption for school district taxes.4Texas Comptroller. Valuing Property Individual cities, counties, and special districts may add optional exemptions on top. Texas also caps annual appraisal increases on homesteads at 10% above the prior year’s value.
Florida’s protections favor long-term ownership more heavily. The homestead exemption knocks up to $50,000 off assessed value: the first $25,000 applies to all property taxes including school levies, and an additional $25,000 applies to non-school taxes on assessed value above $50,000.5Florida Department of Revenue. Homestead Property Tax Exemption More importantly, the Save Our Homes amendment caps annual increases in assessed value at 3% or the change in the Consumer Price Index, whichever is lower.6Florida Department of Revenue. Save Our Homes Assessment Limitation and Portability Transfer In a rising market, that 3% Florida cap outperforms the 10% Texas cap year after year. Over a decade, the gap between market value and taxed value can widen into six figures.
Florida also lets you take that benefit with you. Portability transfers the accumulated Save Our Homes gap to a new Florida homestead, up to a $500,000 cap.6Florida Department of Revenue. Save Our Homes Assessment Limitation and Portability Transfer Texas has no comparable statewide portability.
The takeaway: buy and stay, Florida wins. Buy and sell frequently in the same state, Texas has no comparable long-hold discount, but its higher base rate hurts less if you never build up a Save Our Homes gap.
Real Estate Purchase Costs
Florida charges taxes at closing that Texas does not permit at all. Deeds are subject to a documentary stamp tax of $0.70 per $100 of the sale price.7Florida Dept. of Revenue. Documentary Stamp Tax On a $400,000 home, that alone is $2,800.
Financing adds two more Florida layers. The promissory note carries a documentary stamp tax of $0.35 per $100 of the loan amount, capped at $2,450.8Official Internet Site of the Florida Legislature. Florida Statutes 201.08 – Tax on Promissory or Nonnegotiable Notes A nonrecurring intangible tax of 2 mills (0.2% of the mortgage amount) applies to the obligation secured by the property.9Florida Dept. of Revenue. Nonrecurring Intangible Tax A $320,000 mortgage owes $640 in intangible tax plus $1,120 in note stamps. Add the deed stamps, and state-level transfer taxes on a $400,000 purchase run roughly $4,500 to $5,000.
Texas prohibits all of this. The state constitution explicitly bans any transfer tax on transactions conveying real property.10FindLaw. Texas Constitution Art. 8, 29 – Transfer Tax on Transaction Conveying Fee Simple Title to Real Property Prohibited No documentary stamps, no mortgage taxes, nothing. Frequent buyers and sellers should weigh this heavily.
Business Taxes
Florida taxes only C corporations and other entities taxed as corporations federally, at 5.5%, with the first $50,000 of taxable income exempt.11Florida Dept. of Revenue. Corporate Income Tax S corporations, sole proprietorships, and most LLCs owe nothing at the state level, because their income passes through to owners whose personal income Florida doesn’t tax. Florida LLCs do owe an annual report fee of $138.75, due by May 1, with a $400 late fee for missing it.12Florida Department of State Division of Corporations. File Annual Report
Florida also repealed its sales tax on commercial rent effective October 1, 2025.13Florida Department of Revenue. Sales Tax on Commercial Rentals Repealed Effective October 1, 2025 That was a longstanding Florida-specific cost, and it’s gone.
Texas has no corporate income tax, but the franchise tax (sometimes called the margin tax) reaches nearly every entity type: LLCs, partnerships, S corporations, and professional entities alongside C corporations. For the 2026 report year, entities with annualized total revenue at or below $2.65 million owe nothing, though they still must file a Public Information Report or Ownership Information Report at no fee.14Texas Comptroller of Public Accounts. Texas Franchise Tax Report Forms for 2026 Above the threshold, the rate is 0.75% of taxable margin, or 0.375% for retail and wholesale.15Texas Comptroller of Public Accounts. Franchise Tax Because the tax is on margin rather than profit, a business with thin margins or a net loss can still owe if revenue exceeds the threshold.
The rough decision: a small pass-through business under $2.65 million in Texas revenue owes nothing, matching Florida. A C corporation with substantial Florida income pays 5.5% in Florida and franchise tax on margin in Texas. A high-revenue, low-margin business in Texas can face a bill Florida wouldn’t produce at all.
Sales Tax and What Gets Taxed
Base rates are close. Texas charges 6.25% state, Florida 6%.16Florida Department of Revenue. Tax Information Publication TIP Number 26A01-01 Local jurisdictions in both states can add up to 2%.17Comptroller of Public Accounts. Local Sales and Use Tax Frequently Asked Questions Both exempt most unprepared grocery food and prescription drugs.
Florida caps its local discretionary surtax at the first $5,000 of a single item’s price.18Florida Department of Revenue. Discretionary Sales Surtax Buy a $30,000 boat in a county with a 1% surtax, and the surtax applies only to $5,000 of it. Texas has no equivalent cap.
The wider difference is what counts as taxable. Florida generally doesn’t tax services, aside from a few exceptions like commercial pest control, nonresidential cleaning, and alarm monitoring. Texas taxes landscaping, janitorial work, data processing, web hosting, debt collection, credit reporting, real property repair, and dog grooming.19Texas Comptroller. Taxable Services Anyone running a service-based business or regularly buying services will feel Texas sales tax more.
Moving a Vehicle Into the State
Texas charges new residents a flat $90 use tax per vehicle brought from out of state, regardless of value.20State of Texas. Texas Tax Code 152.023 – Tax on Motor Vehicle Brought Into State by New Texas Resident
Florida can cost far more. The state charges 6% sales tax (plus any county surtax) on vehicles used in the state for less than six months before registration, with credit for sales tax already paid elsewhere. Vehicles owned and used outside Florida for six months or more before being brought in are exempt.21Florida Highway Safety and Motor Vehicles. Sales and Use Tax – Transfer of Motor Vehicles, Mobile Homes, and Vessels Florida also charges a $225 initial registration fee for vehicles not previously registered in the state.22Florida Department of Highway Safety and Motor Vehicles. Motor Vehicle Registrations Skip the six-month waiting period on a $50,000 car and you could owe up to $3,000 in tax on top of the registration fee.
Fuel, Tobacco, and Alcohol
Texas fuel taxes are among the lowest in the country at $0.20 per gallon for gasoline.23Federation of Tax Administrators. State Motor Fuel Tax Rates Florida’s combined rate totals roughly $0.38 per gallon and varies slightly by county.24Florida Department of Revenue. Fuel Tax Rates Adjusted Beginning January 1, 2026 Driving 15,000 miles a year at 25 miles per gallon adds about $108 to your Florida fuel tax bill compared with Texas.
On cigarettes, the gap is slim. Florida’s combined excise tax and surcharge is $1.339 per pack of 20.25MyFloridaLicense.com. Alcoholic Beverages and Tobacco – Tax Rate Info Texas charges $1.41.26Texas Comptroller. Cigarette Tax
Alcohol splits more decisively toward Texas. Texas taxes distilled spirits at $2.40 per gallon.27TABC. Alcohol Excise Taxes Florida taxes wine with more than 17.259% alcohol at $3.00 per gallon, while Texas charges $0.408 per gallon for comparable high-alcohol wine.28Official Internet Site of the Florida Legislature. Florida Statutes 564.06 – Excise Taxes on Wine and Beverages Regular wine drinkers pay noticeably more in Florida.
Which State Costs You Less
Run the numbers against your own situation. If you’re buying a home and financing it, Texas saves you thousands at closing but costs you thousands more each year in property tax. The break-even depends on how long you stay and whether Florida’s Save Our Homes cap can build up a gap in your favor. If you run a service business or a pass-through with revenue above $2.65 million, Florida’s tax structure is friendlier. If you drive a lot and drink wine, Texas wins on the small stuff. The income tax question is a tie; everything after it is arithmetic against your own life.