Taxation & Finance

Question 1

State Taxation

Answer 1

1. NO ad valorem taxes on real property – power limited to local government
2. No personal income tax in Florida, but there is a corporate income tax of 5.5%.
3. Intangible Tax (stocks, bonds, memberships) not to exceed 2 mills
4. Sales Tax reserved exclusively to the state unless state law gives local government entities power to do so.
5. Estate tax

Question 2

Local Government Taxation

Answer 2

ad valorem taxation only; in order for local governments to levy any other tax, there must be enabling legislation

Question 3

Ad Valorem Taxation Requirements

Answer 3

1. Millage rate at 10 mill cap for each unit of local government
2. Uniformity: all property must be taxed at a uniform rate within each taxing unit
3. Just Valuation (best and highest use)

Question 4

Factors in considering just valuation

Answer 4

1. present cash value of the property
2. the highest and best use to which the property can be expected to be put in the immediate future and the present use of the property
3. the location of said property
4. the quantity or size of said property
5. the cost of said property and the present replacement value of any improvements thereon
6. the condition of said property
7. the income from said property and
8. the net proceeds of the sale of the property as received by the seller.

Question 5

Cap on Homestead Annual Assessment

Answer 5

3% or the percent change in the CPI

Question 6

Leaseholds & taxation

Answer 6

a private party leasing government-owned property may have to pay a property tax on the lease interest if the property is used for commercial or proprietary purposes

Question 7

Prohibition Against Double Taxation

Answer 7

Property located in a municipality cannot be subject to taxation for services rendered by the county exclusively for the benefit of residents in the unincorporated area

Question 8

Land Immune from AVT

Answer 8

1. Federal government property
2. State government property
3. County government property

Question 9

Exemptions from AVT

Answer 9

GR: all property is subject to taxation unless specifically exempted by the Florida Constitution or State Law

1. Municipal Property used exclusively for municipal or public purposes
2. Personal Property
3. Economic Development
4. Philanthropic Property (ownership + use) for educational, literary, scientific, religious, charitable purposes
5. Renewable Energy Source Device
6. Homestead exemption ($50,000)
7. Historic Preservation

Question 10

Fee - Requirements

Answer 10

Amount of the fee must be pegged to the per capita cost of the facility AND

Fee money can only be used for the facility (thing) the fee is for.

Question 11

Revenue Bonds

Answer 11

bondholders will be paid back out of the revenues generated from the project. They are non-recourse so the bondholder cannot go against the issuing governmental unit for repayment

Question 12

Revenue Bonds - State Government

Answer 12

• No referendum needed
• Must be for a capital project
• Exceptions: scholarship loans, housing, conservation

Question 13

Revenue Bonds - Local Government

Answer 13

• No referendum needed
• Must be for a capital project
  e. g., airports, port facilities, industrial, manufacturing plants

Question 14

General Obligation Bonds

Answer 14

secured by the taxing power of the issuing government unit - paid back from the tax revenue

Question 15

GOB - State Government

Answer 15

Referendum required

Question 16

GOB - Local Government

Answer 16

• referendum required if the source of funds used to pay back is AVT and the bonds mature more than 12 months after issuance
• Exceptions: pollution control, state roads and bridges, local roads, schools, refunding

Question 17

Finance Questions: Analysis

Answer 17

1. How do you pay back bonds?
2. Is referendum required?
3. Is there a public purpose?

Question 18

Scope of Inquiry Permitted in Bond Validation Proceedings

Answer 18

1. Determining if the public body has the authority to issue the bonds
2. Determining if the purpose of the obligation is legal
3. Ensuring the bond issuance complies wirth the requirements of law.

Question 19

Generally, under Art. VII, § 10

Answer 19

There is a prohibition against pledging credit. However, (a)-(d) are exceptions.

Question 20

To get around the prohibition of lending or pledging credit to aid the private sector:

Answer 20

• Non-recourse revenue bonds must be for a public purpose

- Any other type of bond must be for a paramount public purpose

Question 21

Paramount Public Purpose

Answer 21

major benefit to the public and incidental benefit to the private sector

Question 22

Public Purpose

Answer 22

Primary benefit goes to the private sector and there is an incidental benefit to the public