Business Rent Tax is the term used in the State of Florida under Title XIV, Chapter 212, Section 031, in which Landlords of commercial property are taxed on “renting, leasing, letting or granting a license for the use of any real property” with many exceptions listed. Basically, it is a tax on commercial rents, which under most Florida leases, is passed on to the applicable Tenant to pay.
Pursuant to House Bill 7031, Section 37, “Effective October 1, 2025, section 212.031, Florida Statutes, is repealed.”
Sigh of Relief is an understatement in what this will mean for both Landlords and Tenants doing business in the State of Florida. This extra tax payment ranged over the years from 6% down to 2%, but represented an increase in the cost to lease property in Florida. Some reports note that this repeal could save Tenants in gross a total of around $2.5 billion annually as well as reduce the large administrative burden on Landlords for the tracking and filing requirements under the statute.
What To Look For? Many leases contain provisions such as:
“Tenant shall pay as additional Rent all licenses, charges, and other fees of every kind and nature as and when they become due arising out of or in connection with Tenant’s use and occupancy of the Leased Premises and the Property, including but not limited to license fees, business license taxes, and privilege, sales, excise, or other taxes (other than income) imposed upon Rent or upon services provided by Landlord or upon Landlord in an amount measured by Rent received by Landlord.”
After October 1, 2025 in Florida, those collections are repealed which eliminates those taxes.
What Do I Need To Do? The repeal automatically takes effect on October 1, 2025. It will be important to review all Florida leases to confirm which had the Tenant paying this Business Rent Tax. Landlords need to be aware to eliminate such tax as of this date, and Tenants should contact their Landlord to confirm it will cease. In addition, it may be good will and client relationship building to alert the Tenants of the change and the reduction they should see to their monthly payments. For future leases, while the Business Rent Tax is no longer applicable after October 1, 2025 in the State of Florida, Landlords still will likely require some language to account for this contingency in event the State of Florida enacts future legislation to capture this rent tax once again.
