State of Florida Removes Sales Tax on Commercial Leases
On June 30, 2025, the Florida Legislature passed a significant law (HB 7031) that eliminates the sales tax on commercial real property leases. This legislative change, which takes effect on Oct. 1, 2025, aims to relieve financial strain on businesses, enabling them to reinvest in growth and development. Florida was the only state in the U.S. taxing businesses that rented commercial space.
What This Means for Commercial Real Estate Owners
The elimination of the Business Rent Tax, as it is commonly known, is expected to have immediate economic relief on the commercial property market in Florida. This removal includes the state sales tax rate and county discretionary surtax on commercial leases.
Commercial leases of tangible personal property remain taxable. In addition, there are specific real property leases that remain taxable, including short-term residential rentals and parking, docking, aircraft storage spaces and hangar rentals.
It is essential for commercial property owners to reevaluate their financial strategies in light of this new law. The removal of the sales tax on commercial leases could have several important implications:
- Lease Agreements – review and renegotiate to reflect the new tax law
- Financial Reporting – adjust accounting practices accordingly
- Investment Opportunities – utilize the financial relief for property improvements and expansions
Other Sales Tax Changes From HB 7031
- Permanently eliminates the sales tax on a variety of disaster and hurricane preparedness supplies
- Establishes a permanent annual Back-to-School Sales Tax Holiday in August
- Introduces a new sales tax holiday for hunting, fishing and camping supplies
- Exempts sales of gold, silver and platinum bullion from sales tax
If you have any questions or concerns about the new sales tax laws or if you’d like assistance in evaluating its impact on your business, please connect with your Warren Averett advisor directly, or you can request that a member of our team reach out to you. We’re happy to provide you with guidance and support throughout this transition.