Florida has historically been the only state that charged sales tax on commercial leases. That changed on June 30, when Florida Gov. Ron DeSantis signed House Bill 7031 into law. Among other tax relief, HB 7031 provides that, effective October 1, 2025, the sales tax on most commercial leases has been repealed for rents as of the occupancy period from that date forward.
What This May Mean for You
Most well-drafted leases have language that isolates the sales tax outside of “operating cost” rent (in triple net leases) or outside of gross rent. However, because the sale tax was not an insignificant amount – two percent (2%) of rents, plus any applicable discretionary sales surtax – it is worth reviewing your lease to confirm that the obligation to pay the sales tax on rents is not incorporated into your payment obligations. This will most likely be an issue for you if your Florida lease has a modified gross structure (i.e., you pay additional rent above a “base year”) and sales tax is included in the base year calculation.
What Is Still Taxable
The sales tax repeal does not apply to:
- rentals or leases of living, sleeping, or housekeeping accommodations for six months or less;
- parking or storage spaces for motor vehicles in parking lots or garages;
- docking or storage spaces for boats in boat docks or marinas; or
- tie-down or storage space for aircraft at airports.
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