Florida gets rid of sales tax on commercial rent

After a nearly decade-long effort, Florida is getting rid of its sales tax on commercial rent.

Florida was the only state to impose such a sales tax. Examples of taxable commercial real property rentals include commercial office, retail space, warehouses and self-storage units. The law takes effect Oct. 1.

The elimination of this tax, which has been part of Florida's revenue structure since 1969, is expected to save Florida businesses more than $1 billion dollars. Proponents of HB 7031 hailed it as a win for small businesses.

Lawmakers reduced this tax from 5% to 2% in recent years. The bill will still cost the state $904.8 million and local governments $623 million per year. Companies are expected to save $1.53 billion per year.

Republican Gov. Ron DeSantis, who signed the bill on June 30, said that while he supports the cut, it won’t directly help many residents.

Other pieces of the measure include permanent exemptions from sales taxes for disaster preparedness items, exemptions on gold bullion and NASCAR tickets and a month-long back-to-school sales tax holiday.

If you think your business may be impacted by sales tax developments, contact TaxConnex. TaxConnex provides services to become your outsourced sales tax department. Get in touch to learn more.