Ohio/Florida

 At Gault Legal Group, many of our clients have residences in both Ohio and Florida. As attorneys licensed in Ohio and Florida, we understand the differences in laws and taxes between Ohio and Florida so we can help you create a holistic plan to minimize tax liabilities and preserve your wealth. 

Ten Points to consider:

1. Domicile: The state you are domiciled in has a major impact on your financial future.  
2. Taxes: There are many differences in taxes between Ohio and Florida, most notably that Florida does not have a state income tax.  
3. Homestead: Florida’s comprehensive, yet complicated homestead laws can offer protection for your primary residence. 
4. Ohio currently has a Business Income Tax Deduction which allows business owners to deduct 100% (starting in 2016) of business income from their adjusted gross income up to $250,000. This is a big advantage for small business owners.
5. Florida recognizes Tenants by the Entirety for real property for married couples, Ohio does not.
6. Florida no longer recognizes Springing Financial Powers of Attorney.
7. The average cost of a nursing home in Ohio is $7,148 per month, whereas the average cost of a nursing home in Florida is $8,669 per month.
8. There is a one-time $225 vehicle registration fee in Florida for vehicles that have never had a Florida registration. Registration fees in Ohio range from $35-$100 depending on the type of vehicle.
9. The current sales tax rate in Ohio is up to 8% depending on the county. The current sales tax rate in Florida is 6% plus local sales tax.
10. Conveyance fees in Florida are $7 per $1000 (ex: $700 on a $100,000 property). Conveyance fees in Ohio are from $2-$4 per $1,000 (ex: $200-$400 on a $100,000 property). Thus, transferring property in Florida costs about three times as much as in Ohio. Importantly, many counties in Florida impose conveyance fees even if you are merely refinancing.

 The state you are domiciled in can affect the taxes you pay and your estate plan, so it is important to analyze which state you should be domiciled in based on your circumstances and goals. Your domicile is considered to be the state where you intend to return. 

Ohio and Florida have both enacted laws to help determine where you are actually domiciled. The starting point in this determination is where you say you are domiciled. Although this factor is taken into consideration, your actions will further determine your place of domicile. Your actions are viewed in two different ways to form a totality of the circumstances analysis:

1) a statutory test 2) by a preponderance of the evidence.

The statutory tests:

Ohio looks to ORC Section 5747.24 to determine domicile. As of January 1, 2018, the statute was revised to reinstate the bright-line domiciliary test for Ohio income tax purposes. This law states that an individual is presumed to NOT be an Ohio resident for tax purposes of the individual files an Affidavit of Non-Ohio Residency on or before the 15th day of October verifying, under penalty of perjury, that the individual meets the following requirements:

1. The individual has less than 213 contact periods in Ohio.
2. The individual has at least one abode outside of Ohio, during the entire taxable year, for which the individual does not claim a depreciation deduction on their federal income tax return for that taxable year.
3. The individual does not have an Ohio driver’s license or ID card at any time during the taxable year.
4. The individual does not receive a reduction in real property taxes in Ohio for the taxable year.
5. The individual did not receive a tuition discount due to being an Ohio resident.

Note that if an individual does not meet one or more of these bright-line tests, it does not preclude the individual from being a non-resident, but it does mean that the presumption of non-Ohio domicile is lost. The taxpayer would then have the burden to prove otherwise.

Florida looks to its Code section 222.17 for its laws on determining domicile. The primary method under Florida law to establish your domicile is to file a Declaration of Domicile form with the Clerk of Court in the county where you reside. In Florida Code section 198.015 regarding Estate Tax it says, “For the purposes of this chapter, every person shall be presumed to have died a resident and not a nonresident of the state (a) If such person has dwelt or lodged in the state during and for the greater part of any period of 12 consecutive months in the 24 months next preceding death.”

This test often turns on your answer to the question, “Where do you intend to be domiciled?”. In other words, Where do the facts and circumstances of your actions show that you intend to be domiciled? In Ohio, the most important factor is where you spend your time. In Florida, the most important factor is whether the Declaration of Domicile form is filed.

So, the question becomes, how do you change your domicile to Florida?

Although there is no definitive way to change your domicile, at a minimum you should do the following:

1. Change your driver’s license and automobile registration to Florida
2. Use your Florida address on your federal, state, and local income tax filings
3. Revise Wills and Trusts to reflect changed domicile
4. Vote in Florida
5. Establish social contacts in Florida
6. Reduce real and personal property holdings in Ohio
7. Reduce business activities in Ohio
8. Reduce time spent in Ohio
9. File the Declaration of Domicile with the County Clerk of Court
10. Do not claim the homestead exemption on real estate in Ohio
11. Close Ohio safety deposit boxes
12. Maintain bank accounts in Florida
13. Maintain some doctors in Florida
14. Join social clubs in Florida