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January 4, 2002

No Major Changes for Intangible Tax Law for 2002

Florida intangible tax law will contain no change for most taxpayers for 2002, the Florida Department of Revenue (DOR) announced Thursday.

Exemption levels for the tax will remain at the same level for 2002 as for 2001. Tax rates also will remain at $1 in tax for each $1,000 in taxable assets.

Because proposals to change intangible tax law have received wide publicity in recent months, busy taxpayers may have lost track of where the law stands today. DOR is launching an outreach program through the accounting community, Florida business organizations and its own taxpayer education staff to help taxpayers understand how the current law applies to them.

"We want to help taxpayers comply with the law," said Dr. Jim Zingale, executive director of DOR. "To do so, taxpayers must understand what the law requires, what has changed, and what has not."

The intangible tax, established in 1931, applies to stocks, bonds, mutual funds and certain other assets. No tax applies to Individual Retirement Accounts (IRAs), 401K retirement plans, pension or Social Security benefits, many money market accounts, certificates of deposit, or tax-exempt Florida or U.S. government bonds.

Information on the intangible tax is available on the DOR Website at http://www.myflorida.com/dor/ Zingale urged taxpayers and their accounting professionals to check this site frequently. DOR expects to launch an Internet-based filing capability by early 2002. Online filing will speed the processing of returns, help avoid common filing errors and save money and time, Zingale said. Taxpayers who file electronically will receive an automatic receipt that they can keep for their records. Online filing also is faster and more convenient.

As in previous years, individual filers will be allowed to exempt the first $20,000 in taxable assets from intangible tax. Couples filing jointly may exempt the first $40,000 in taxable assets. These exemption levels are unchanged from 2001, Zingale noted. Under a law adopted in December 2001, exemption levels are scheduled to increase in 2004.

Also unchanged in 2002 is the $60 minimum payment threshold. Under this provision, taxpayers who owe less than $60 are not required to pay tax. In combination with allowable exemptions, this threshold means that an individual taxpayer must own at least $80,000 or more in taxable assets to be required to pay tax. For couples filing jointly, the $60 minimum payment means that the couple must own at least $100,000 or more in taxable assets to be required to pay tax. Businesses may own up to $60,000 in taxable assets without being required to pay tax. The minimum payment threshold is calculated before applying appropriate discounts for early filing.

Individuals and joint filers who are not required to pay tax are not required to file a tax return. Corporations that owe no tax are required to file a return, but may use DOR's "TeleFile" telephone filing system or its electronic filing options to file a return quickly and easily. For more information, see the DOR Website at http://www.myflorida.com/dor/eservices/

Taxpayers can save money by filing their returns early. By law, taxpayers can earn a 4 percent discount if they file their return on or before February 28, 2002. A 3 percent discount applies to returns filed on or before March 31, 2002, with 2 percent discounts applying to returns filed on or before April 30, 2002 and a 1 percent discount for returns filed by May 31, 2002.

Taxpayers who file late, or who fail to file, may face penalty and interest costs. DOR receives information about who may be liable for intangible tax from the IRS and stockbrokers throughout the United States.

DOR expects to mail hundreds of thousands of intangible tax forms to taxpayers in mid-January 2002. Taxpayers also may download forms from the DOR Website. However, DOR urges taxpayers to file the personalized returns they will receive in the mail, to speed processing and cut costs.

For more information about intangible tax, please contact the nearest DOR service center. To find out how to contact your local service center, point your Internet browser to the DOR Website listed above, or look in the Government Listings (the "Blue Pages") of your telephone directory. Look under "Florida, State of" and "Revenue, Department of."

In addition, DOR tax education experts frequently conduct free seminars on intangible and other taxes. For more information about seminars, go to the Website or call the nearest DOR service center.