New Florida legislation will have a significant impact on the commercial real estate market. Florida House Bill 7031 (“HB 7031”) will become effective October 1, 2025, repealing the state sales tax on commercial rent and license fees.
Key Items
HB 7031 will apply to rentals and occupancy periods starting October 1, 2025, fully repealing Section 212.031 of the Florida Statutes. However, sales tax will remain for transient rentals i.e. temporary rentals for six months or less, parking and storage spaces in parking lots or garages, and boat docking or storage spaces in docks or marina under Section 212.03.
This exemption does not apply to delayed rent or license fee payments for rental periods through September 2025, which are taxable. On the other hand, advance rent or license fee payments made before October 1, 2025, for periods before that date are not taxable. Owners of commercial spaces should also note that a tax return must still be filed for September, even if no tax is due.
Landlords
Examples of taxable commercial real property prior to HB 7031 include commercial offices and retail spaces.
If you are a landlord to commercial property, you must stop collecting any and all sales tax from commercial tenants for rental periods beginning on or after October 1, 2025. It is best practice to ensure all billings systems are updated to remove any reference to a state sales tax on commercial rent and license fees. This includes carefully reviewing invoices and payments to ensure correct payments are made.
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