State tax rates and rules for income, sales, property, estate, and other taxes that impact retirees. Go to Retiree Tax Map Florida Add to State Compare List | View List View State Compare List (0) selected | Compare up to 5 The Bottom Line Tax-Friendly The Sunshine State is state is very popular with retirees, not just because of its forgiving climate but also because it has no state income tax. Sales taxes, though, can go as high as 8.5%, depending on where you live. The average combined state and local sales tax rate is 7.08%, which is about average.Property taxes are reasonable in Florida, and residents ages 65 and older who meet certain income, property-value and length-of-ownership restrictions can also receive an extra homestead exemption. Any widow or widower who is a Florida resident may claim an additional $500 exemption as well. Income Tax Range Florida has no state income tax. Taxation of Social Security Benefits Social Security benefits are not taxed by the state. Tax Breaks for Other Retirement Income Florida has no income tax. Sales Tax 6% state levy. Localities can add as much as 2.5%, and the average combined rate is 7.08%, according to the Tax Foundation.Groceries: ExemptClothing: TaxableMotor Vehicles: Taxable (additional county tax on first $5,000 of purchase price may apply)Prescription Drugs: Exempt Real Property Taxes In Florida, the median property tax rate is $830 per $100,000 of assessed home value. Florida residents ages 65 and older who meet certain income limits can receive an extra homestead exemption of up to $50,000 from some city and county governments and/or an exemption equal to the assessed value of the property, as long as the real estate has a fair market value of less than $250,000, the homeowner has maintained permanent residence at the location for at least 25 years, and household income does not exceed $30,721 in 2020.Any widow or widower who is a Florida resident may also claim an additional $500 exemption. Annual Car Taxes and Fees No annual vehicle tax or fee is imposed. Estate and Inheritance Taxes No estate or inheritance tax.