Florida’s Sales Tax Rates on Commercial Leases Were Reduced on December 1, 2023
Florida does not have a state income tax; however, it does have comprehensive sales tax on commercial real estate leases.
All “rents” paid by tenants to landlords on commercial real property leases are subject to a Florida sales tax. Rents include but are not limited to monies paid by Tenant to the Landlord for base rent, common area charges, maintenance services fees, and any other monies due and payable by the tenant to the landlord for the privilege or right to use or occupy the real property.
The Florida legislature on December 1, 2023, reduced effective tax rate on such rents by revising Florida Statutes § 212.031, to permanently reduce the state portion of the tax levied on the total rent or license fee charged for “renting, leasing, letting, or granting a license for the use of any real property” from 5.5 to 4.5%. Further reductions are forthcoming, but the effective date of additional reductions is unknown at this time
In addition to the state rental sales taxes, there is typically an additional county sales tax imposed (e.g., an additional 1.5% in Hillsborough County, and 1% in Pinellas and the majority of other Florida counties) that must be tacked onto the state’s remittance rate. The current sales tax rate is applicable to any rental payment during the period of occupancy, not the time when the rent payment is made. This means that any delay or acceleration of a given rental payment is irrelevant to the rate applied to the rent payment.
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