Florida to Eliminate Sales Tax on Commercial Rent, Creating a More Business-Friendly Climate by Karen A. Lake, CPA
Posted on July 01, 2025
by
Karen Lake
Florida lawmakers recently approved House Bill (HB) 7031, calling for the full repeal of the state’s sales tax on commercial rent tax beginning on October 1, 2025. This change, which marks the end of a policy that has long been out of step with national norms, is expected to generate significant savings for Florida-based businesses and could further enhance the state’s competitiveness as a destination for corporate relocation and expansion.
Background: A Tax with No Peers
Florida introduced a tax on business rent in 1969. In the decades since, no other state has imposed a similar tax on business leases. This has made Florida’s policy an outlier and a frequent target of criticism from the business community and economic development groups.
Florida’s business rent tax applies to the total rent or license fees tenants pay to occupy commercial real estate, including office buildings, retail centers, warehouses, and even self-storage units. Taxable rent includes base rent and any required tenant payments for property taxes, utilities or common-area maintenance.
Currently, the state-level tax on commercial rent remains at 2 percent and is based on the date the tenant takes occupancy or has a right to occupy that property.
New Law: Permanent Repeal with Local Preemption
HB 7031 passed by the Florida Legislature in June 2025 permanently removes the tax on commercial property rent from Florida statutes effective October 1, 2026, while also preempting local governments from imposing similar taxes.
Businesses entering into new lease agreements should carefully review occupancy and payment dates to determine whether and when the sales tax will apply in the lead-up to the repeal date. These reforms eliminate one of the few remaining friction points in Florida’s otherwise business-friendly tax environment.
Other Tax Changes
Florida’s commercial rent tax repeal is part of a broader legislative push to reduce the cost of doing business in the state. Other business-friendly provisions passed by the legislature include repealing the aviation fuel tax, beginning January 1, 2026, and delaying the imposition of a scheduled tax on natural gas fuel until January 1, 2030. Taken together, these changes signal Florida’s continued commitment to pro-business tax policy and long-term economic growth.
About the Author: Karen A. Lake, CPA, is a state and local tax (SALT) specialist and a director of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where she helps individuals and businesses navigate complex federal, state and local tax laws, credits and incentives. She can be reached at the firm’s Ft. Lauderdale, Fla., office at (954) 712-7000 or info@bpbcpa.com.
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