What is the current Florida commercial rent sales tax rate?

Florida is the only state that imposes sales tax on commercial real estate rent. The state rate has been steadily reducing — currently 2% statewide effective June 1, 2024, with local discretionary surtax (typically 0.5-1.5%) layered on top.

Who is responsible for collecting the commercial rent sales tax?

The landlord. Sales tax must be collected from the tenant, reported, and remitted to the Florida Department of Revenue monthly or quarterly depending on volume. Triple-net leases must be structured carefully — the tax applies to base rent AND to CAM/operating-expense pass-throughs.

When will Florida eliminate commercial rent tax entirely?

The legislature has signaled intent to phase the tax out fully, but each reduction requires a session vote and is contingent on revenue triggers. As of 2025-2026 the trajectory is downward but no firm sunset date is law. Plan based on current rates; do not assume zero.

Florida Commercial Rent Sales Tax: Upcoming Changes

Introduction

Florida businesses will soon see a change in their operating costs as the Florida Governor signed House Bill 7031 to eliminate Florida Commercial Rent Sales Tax on commercial real property leases. This tax, which currently stands at 2% state tax plus applicable local surtaxes, has been a consideration for Florida businesses for many years. Let’s look at what this change means and how to prepare for it.

What’s Changing with Florida Commercial Sales Tax
When the Change Takes Effect
What Will Still Be Taxed
Financial Impact for Businesses
Steps for Landlords
Steps for Tenants
Conclusion

What’s Changing with Florida Commercial Rent Sales Tax

House Bill 7031, passed by the Florida Legislature, and signed by Governor Ron Desantis on June 30, 2025, eliminates both state and local sales tax on commercial real property leases. Currently, Florida businesses pay a 2% state tax plus local surtaxes (typically 0-1%) on their commercial rent.

Florida has been gradually reducing this tax rate over the years. The bill represents the final step in this process, completely removing the tax rather than further reducing the rate. According to some estimates, this change is expected to reduce state general revenue by approximately $905 million.

When the Change Takes Effect

The tax elimination takes effect on October 1, 2025. The timing of this change relates to the period of occupancy, not when payment is made. This means:

Rent for periods before October 1, 2025, will still be taxed, even if paid after this date
Rent for periods on or after October 1, 2025, won’t be taxed, even if paid before this date
Any rental adjustments related to pre-October 1, 2025, occupancy will still include sales tax

For example, if a tenant pays October 2025 rent in September, no sales tax would be due. Conversely, if a tenant pays August and September 2025 rent in October, sales tax would still apply to those payments.

What Will Still Be Taxed

Not all property rentals will become tax-free. According to updated law, these rentals will remain taxable:

Short-term residential rentals (leases shorter than six months)
Vehicle parking facilities
Boat docking spaces
Aircraft hangar rentals
Self-storage units

Additionally, equipment rentals included in commercial leases (like a forklift rented with a warehouse) will still be subject to sales tax as tangible personal property.

Financial Impact for Businesses

For businesses, this change represents straightforward savings. A business currently paying $10,000 monthly rent with a combined state and local commercial tax rate of 3% will save $300 monthly or $3,600 annually. These funds can be redirected to other business needs.

The National Federation of Independent Business (NFIB) has noted that taxes have become the top concern for small business owners nationwide, making this change particularly relevant for many Florida companies.

Steps for Landlords

If you’re a commercial property owner or manager, consider these practical steps once the bill is signed:

Update your billing systems to remove sales tax for rent periods after September 30, 2025
Consider filing “zero returns” with the Department of Revenue even after the tax elimination. This allows you to request compliance certificates, which may be needed during property sales due to potential successor liability for past taxes
Communicate with tenants about the upcoming change to prevent confusion
Review lease templates to update language regarding sales tax for new leases
Ensure proper tax collection through September 30, 2025

Steps for Tenants

If you lease commercial space in Florida:

Review your lease agreement, particularly sections mentioning sales tax
Check your rent invoices after October 1, 2025, to confirm they no longer include sales tax
Adjust any automated payment systems that might automatically add tax
Budget accordingly for the reduced expense starting October 2025
If you sublease space, inform your subtenants about the tax elimination

Conclusion

The elimination of Florida’s Commercial Rent Sales Tax on rent represents a change that will affect many businesses throughout the state. By understanding when and how this change takes effect, both landlords and tenants can prepare appropriately.

While the tax won’t disappear until October 2025, businesses can begin planning now for the transition. Remember that some rental types will remain taxable, so it’s important to understand exactly how this change applies to your specific situation.

Have questions about how these changes might affect your business? Contact Us to speak with our tax experts.