Q:I’d like to move to Florida because it doesn’t have an income tax. But what’s this I hear about an asset tax that taxes all of the assets you own?

When Northern snowbirds land in Florida, they expect to be home free because the state doesn’t have an income tax. But their feathers are soon ruffled when they discover the asset tax. The asset tax can end up costing as much as an income tax would.

Otherwise known as the Florida Intangible Tax, it applies to nonretirement investments, such as stocks and bonds, but excludes bank deposits. Tangible assets like cars and homes are not taxed. With the current rate at 0.1 percent, an unsuspecting relocator would pay about $1,000 annually on a million dollars
in investments.

The tax even applies to money Florida resi- dents have tucked away outside the state. “If your assets are in New York and you’re a Florida resident, you owe tax,” says Mari B. Adam, MBA, certified financial planner, and president of Adam Financial Associates in Boca Raton, Florida. “That’s why some people are surprised. They have money with a broker in another state and incorrectly assume it means the money is not taxable in Florida. Wrong!”

The good news: The tax is deductible on your federal return, as long as you itemize.