So if Florida doesn't have me file state taxes, why am I being charged by Turbo tax to file?

[mesquitebean]

Florida doesn't have state income tax, but some filers will need to file a DR-405 if they have "tangible personal property" in their Florida business or rental property.   Did you start a Florida state form by mistake?   See the full info below on what to do to delete it if it doesn't apply to you.

[mesquitebean]

Florida does not have a state income tax.   Only people who have Florida businesses or rental property with tangible personal property have to file a DR-405 with the county property appraiser by April 1 each year.

http://floridarevenue.com/property/Pages/Taxpayers_TangiblePersonalProperty.aspx
and
http://floridarevenue.com/property/Documents/pt114.pdf

If you don't have a Florida business or rental property with such tangible personal property, then you do not have to file a Florida return.    On the screen that mentions the Florida state return, you can choose to decline the Florida return, or if you've passed that, delete the Florida return before paying and filing if it's not needed.

https://ttlc.intuit.com/questions/1900608-how-do-i-delete-my-state-return-in-turbotax-online

If you've already paid for it and don't need it as explained above, you can talk to TurboTax Customer Support and tell them you didn't need it.

FAQ:  What is the TurboTax phone number?

https://ttlc.intuit.com/replies/3300041

[lissmarie216]

That's why I'm confused. Turbotax even acknowledges that my state I don't need to file for, but it still shows up and turbotax is charging me money and I don't even have to file.

[mesquitebean]

If you don't need it and haven't paid, then you should be able to delete it.   If you can't solve it with the info above, you'll need to phone the folks at TurboTax Support for assistance.

[KUKIM]

What does it mean by "tangible personal property." I have a rental property in Florida so i am not sure if i fit into this criteria. I am having the same issue where Turbo tax is telling me to pay for the Florida tax but i only have rental property. 

[mesquitebean]

---

@ KUKIM wrote:

What does it mean by "tangible personal property." I have a rental property in Florida so i am not sure if i fit into this criteria. I am having the same issue where Turbo tax is telling me to pay for the Florida tax but i only have rental property. 

---

See this:

https://floridarevenue.com/property/Documents/pt114.pdf

I'm not a tax expert and a long way from being knowledgeable about Florida, so I can't help you any further with some specific examples.   So I'll also ask @ tagteam and/or @ Carl if they can help you more specifically with this when they are next in the forum.

I see you also started another thread with some additional questions about your Florida rental property.  So keep watching it, too, at this link:

https://ttlc.intuit.com/community/state-taxes/discussion/florida-property/01/1660918#M72110

[tagteam · Accepted solution]

---

@KUKIM wrote:

What does it mean by "tangible personal property." I have a rental property in Florida so i am not sure if i fit into this criteria. 

---

@KUKIM You should visit the web site of the county property appraiser for further information. There should also be a contact number in the event you have any further questions. 

See https://floridarevenue.com/property/Pages/LocalOfficials.aspx

For the majority of counties, "tangible personal property" used in residential rental real estate would include furnishings, appliances, and the like. 

The Florida form you would file to report tangible personal property is Form DR-405. Note that filing Form DR-405 provides the taxpayer (owner) with an exemption of the first $25,000 in valuation of personal property. If your rental unit (house, condo, etc.) is unfurnished, odds are the value of items that are considered "tangible personal property" on the premises and used by the tenant(s) will be well below that figure.

[Carl]

Again, FL does not tax personal income. No state tax forms exist for doing so.

Tangible personal property is non-real estate property that you can physically see and touch. As an example, if you are a dentist that runs your own dental practice as a single member LLC, you may own the building that your practice is set up in. IN that building you have dental chairs that cost about $6000 each. Those chairs are tangible personal property. You don't rent them out. But you do use those chairs on a recurring basis in the production of income.

In Florida, 63 of the 67 counties impose a tangible property tax on any non-real estate property used to produce income. This is *NOT* a state imposition on the business owner. It's a "COUNTY" tax. So with TurboTax it's perfectly possible to complete the Florida form DR-405 to report your tangible personal property and pay the property taxes on it *every* *single* *year* it's used in the production of income. This tax is "NOT" paid to the state. It's paid to the county property tax assessor. So it can't be e-filed. The DR-405 has to be mailed or hand delivered to the local county tax assessor's office with payment each year.

So if you have residential rental real estate in Florida, and you break things down so that you are depreciating your appliances separately, as far as the county is concerned those appliances you separated out are tangible personal property.Therefore, any "savings" you may "think" you realize by depreciating the appliances separately, is basically lost *every* *single* *year* in the form of personal property tax paid to the local county.

So those who believe they're saving money by separating out appliances from rental property so they can depreciate them over 5 years, aren't saving a single penny. In fact, they're spending "more" money on taxes than they would if they just leave well enough alone and include the value of the appliances in the rental property that's already depreciated over 27.5 years.

So breaking it down and listing appliances and other things separately from the rental property so you can "depreciate them faster" is just plain nonsense in my book. It makes absolutely no sense. Since rental property almost "always" operates at a loss on paper at tax time, Doing this will not make one single penny of difference to your tax liability.

However, when you sell or otherwise dispose of that asset in a later year, the depreciation recapture "WILL" increase your overall AGI and has the potential to bump you into a higher tax bracket. That's gonna heppen weather you paid tangible property taxes or not. So if you're separating appliances out from your rental property in the state of Florida, welcome to the double-taxable that "you" consented and agreed to, by doing so.

Note that if you run a short term rental in this state (such as AirB&B) there's no getting out of the tangible property tax. If you're registered with the county as a short term rental (and a majority of counties *require* this) then they already "know" you have tangible property in the real estate you're renting out. So if you don't file the DR-405 with the county to report "at least" the beds in the property, you can expect them to come looking for you sooner or later.

[tagteam]

---

@Carl wrote:
The DR-405 has to be mailed or hand delivered to the local county tax assessor's office with payment each year.

---

No payment is due at the time of filing of Form DR-405. Rather, the valuation of each item is reported and totaled and then assessed by the county property appraiser for the county in which the personal property is located.

The tax bill on the personal property, if any, is generated and sent at the same time as the bill for the real property.

---

@Carl wrote:

In Florida, 63 of the 67 counties impose a tangible property tax on any non-real estate property used to produce income. 

---

I would also like to know which 4 of the 67 counties in Florida do not impose a tangible personal property tax. I have visited virtually every county property appraiser's web site and have yet to find a county that does not levy the tax or require that a Form DR-405 be filed.

[tagteam]

---

@Carl wrote:

So if you have residential rental real estate in Florida, and you break things down so that you are depreciating your appliances separately, as far as the county is concerned those appliances you separated out are tangible personal property.Therefore, any "savings" you may "think" you realize by depreciating the appliances separately, is basically lost *every* *single* *year* in the form of personal property tax paid to the local county.

---

Depreciation for federal income tax purposes and personal property tax on tangible personal property imposed at the county level are two completely forms of taxation. 

If appliances must be included as tangible personal property used in residential rental real estate (as is typically the case in most counties in Florida), then it makes no difference whether or not those appliances have been depreciated separately for federal income tax purposes. In other words, even if the appliances are expensed for federal income tax purposes, they must still be included on Form DR-405 (if the form is required to be filed or is otherwise filed for the sole purpose of the exemption).

[KUKIM]

@Carl Thank you! I really do appreciate taking your time with the detailed information. To confirm if i am only depreciating the property i dont have to worry about the tangible property tax? This is not a short term rental and i do have appliance but i will not be depreciating any of those appliances. 

[tagteam]

---

@KUKIM wrote:

....To confirm if i am only depreciating the property i dont have to worry about the tangible property tax? This is not a short term rental and i do have appliance but i will not be depreciating any of those appliances. 

---

One (depreciation for federal income tax purposes) has nothing to do with the other (the tangible personal property tax).

In fact, you could have taken enough depreciation deductions over the years on your federal income tax returns such that the bases of all of the appliances were reduced to zero and they could still have value for the purposes of the tangible personal property tax. 

Regardless, since you mentioned the rental is not a short-term rental (which, I presume, means the unit is unfurnished), you will in all likelihood not be subject to the tangible personal property tax since the first $25,000 in valuation is exempt from taxation. However, you do need to file a DR-405 for the automatic exemption to kick in.

[Carl]

Generally, the county doesn't mess with long term rentals to much - so long as you don't give them reason to. When I purchased my 3 rentals (at different times of course) they all came with the appliances already in them. So my cost basis on the entire property already included the appliances. Would be unnecessary paperwork to separate them for depreciation.

Now I've had appliances go bad over the years. For example, a dishwasher lasts on average 5 years. When that happens I just go out and buy a new dishwasher. Technically speaking, that's a property improvement. But the IRS says for those property improvements that cost less than $2,500 (plus meet a few other criteria) I can just expense them in the year purchased. This is referred to under the "safe harbor de-minimus" act. Apparently the IRS agrees that depreciating a $300 dishwasher over 5 years is stupid, as it makes not one penny of difference to your tax liability.

Now a central A/C unit is a different story. When I had to replace the outside compressor at a cost of $2,400 I could not invoke the "safe harbor" act to expense it. That's because by IRS standards a central A/C until becomes "a physical and permanent part of" the structure when installed. So I had no choice but to capitalize and depreciate. But on the tangible property tax that is also not considered "a separate peice of equipment" utilized in the production of income, since when installed it becomes " a physical part of" the structure. So no separate tangible property tax there.

The above also holds true for a hot water heater. The typical cost of a new hot water heater is $800 including installation. When installed a HW heater does in fact become a physical part of the plumbing system in the house, and of course the plumbing system is already a physical part of the structure. So a hot water heater is not eligible for the safe harbor expense deduction. It's unfortunate, but that $800 cost has to be capitalzed and depreciated over 5 years as "equipment". But again, my county doesn't see it as a separate price of equipment used in the production of income, since in the end it is "a phyiscal part of" the plumbing system, when is "a physical part of" the structure.

So the difference here (As I see it) is that while a built in dishwasher may be a physical part of the structure, if that dishwasher is removed the property is still 100% functional and livable. Dishes can still be washed in the sink.

But without hot water that's a different story - particularly for a family with small kids or an infant where hot water is a necessity for sterilization. While selling a house without a dishwasher is easy, good luck finding a buyer if there's no hot water.

[tagteam]

---

@Carl wrote:

...So my cost basis on the entire property already included the appliances. Would be unnecessary paperwork to separate them for depreciation.

---

Except the issue in this thread involves the Florida tangible personal property tax and appliances, in the vast majority of counties, do have to be separated for the purposes of filing a Form DR-405. It also does not matter whether those appliances were included in the purchase price of the real estate.