Jackson Hewitt® Informs Florida Residents On Recent Changes To Intangible Property Tax Law

2006 Marks the Final Year for State-Related Tax

(Monday, November 13, 2006) - A change in the Florida tax code may make some Floridians eligible for great savings, according to Jackson Hewitt Tax Service®, an industry leader providing full service individual federal and state income tax preparation.

"A Florida-specific tax called the Florida Intangible Tax has been recently repealed, meaning that 2006 is the final year that taxpayers will have to make this payment," comments Mark Steber, Vice President of Tax Resources, Jackson Hewitt. "Because the amount owed is based on an individual's tax status as of January 1, 2006, those who had sufficient income at that time must still file based on the prior law one final time. But the change in this particular portion of the Florida tax code is important for state residents to keep in mind as they prepare to file their 2006 tax return, and going forward."

The Intangible Personal Property Tax is an annual tax in Florida based on personal property that is considered "intangible," such as taxable assets like stocks, shares or units of a mutual fund (including money market funds), ownership interest in a limited liability company, interest in limited partnerships registered with the Securities and Exchange Commission, bonds, or loans. The rule applied to state residents or those doing business in the state who owned, managed or controlled these assets as of January 1, 2006 -- as well as to residents whose intangible assets were held by security dealers and/or stockbrokers. Unless the tax due is less than $60, those meeting these qualifications were required to file by June 30 of each year.

Thanks to the repeal of the Intangible Tax, Florida residents may be eligible for greater savings. Under the old rule, assets above $250,000 (for an individual filing) are taxed at $.50 per thousand dollars of value. Those filing a joint return are taxed at $.50 per thousand dollars of value for assets above $500,000.

As an example: Mr. and Mrs. John Smith own 6,000 shares of ABC company common stock and 4,000 shares of XYZ company common stock. The ABC stock is currently trading at $91.37 per share and the XYZ stock is currently trading at $35.16 per share. The total value of their portfolio is $688,860. They are also holding an unsecured note valued at $368,000. The total taxable intangible assets are $1,056,860. Because they are filing a joint return, the first $500,000 of intangible assets are excluded, leaving $556,860 subject to the intangible property tax. Prior to the repeal on the Florida Intangible Tax law, the total tax due on this portion of the return would have been $278.

Two categories relating to intangible property have not been repealed. The nonrecurring tax on a note, bond or other obligation for payment of money that is secured by a mortgage, deed, or other lien on "real property" (physical property as opposed to intangible property) is still in effect -- meaning that taxpayers who are lending money secured by mortgage on Florida real property still must pay the nonrecurring intangible tax. In addition, the recurring tax on real property owned by a government and leased to a non-government entity when rental payments are due is still subject to taxation. Those who lease property from a government entity must still file and pay the governmental leasehold intangible tax annually if the amount of tax owed is $60 or more.

"While it is important to be mindful of new tax changes on the national level, understanding specific revisions to state tax code is equally critical," comments Steber. "Often there are several new pieces of legislation signed that may help to reduce the amount that a taxpayer owes or enhance the amount of a return. A knowledgeable tax preparer in one of the over 500 Jackson Hewitt locations around Florida can provide guidance and up-to-date assistance on all individual tax-related issues."

To find a local Jackson Hewitt office, visit http://www.jacksonhewitt.com or call 1-800-234-1040 for locations.

About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with over 6,000 franchised and company-owned offices throughout the United States during the 2006 tax season, is an industry leader providing full service individual federal and state income tax preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at http://www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service office nearest to you, call 1-800-234-1040.

Source
Jackson Hewitt Tax Service Inc.

Contact
Allison Jackson
Senior Manager, Communications
Jackson Hewitt Tax Service Inc.
973-630-0681
allison.jackson@jtax.com

Melissa Connerton
CooperKatz & Company
212-455-8001
mconnerton@cooperkatz.com

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