Florida bill eliminates sales tax on commercial rent: What tenants and landlords need to know
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A significant tax change is coming to Florida’s commercial real estate landscape.
This blog post was originally published on June 24, 2025. It was updated on July 2, 2025.
Effective October 1, 2025, businesses leasing commercial space in Florida will no longer be required to pay state or local sales tax on rent pursuant to a bill recently passed by the Florida Legislature. This long-anticipated change, introduced under House Bill 7031 and signed into law by Governor DeSantis on June 30th, brings substantial savings for tenants and simplifies billing and compliance for landlords and property managers.
With the repeal now enacted, it’s important for all stakeholders to understand how this shift will affect their leases, payments, and administrative responsibilities.
What’s included and what’s not
The repeal applies to commercial real estate leases, such as office, retail, and industrial space. Rent for these properties will no longer carry sales tax as of the effective date.
However, some rental types are taxed under different statutes and will remain taxable even after the repeal of the commercial rental tax. These include parking facilities and boat slips.
Sales tax continues to apply to all commercial rent for occupancy through September 30, 2025, even if payment is made later.
What tenants should do
Businesses leasing space should review their lease agreements, particularly sections referencing sales tax. After the repeal takes effect, any mention of “applicable sales tax” in these agreements will no longer apply to commercial leases.
Rent invoices for periods beginning after the repeal’s effective date should reflect the updated total. Businesses using automated payment systems should consider adjusting their settings to remove the tax portion. Subtenants should also be notified that tax will no longer be added to sublease payments.
The impact can be significant for many businesses. For example, a $10,000 monthly lease previously taxed at 2% would yield an annual savings of $2,400—resources that can be redirected into business operations or growth.
What landlords and property managers should do
Landlords must confirm their invoicing and payment systems are updated to remove sales tax from rent charges for occupancy after September 30, 2025. Billing templates, lease administration tools, and financial systems should be reviewed to prevent any erroneous charges.
After remitting sales tax collected through the final applicable period, landlords may choose to close their sales tax account with the Florida Department of Revenue if no other taxable activity exists.
A brief notice to tenants can help avoid confusion and reinforce clear, proactive communication. New leases covering periods beyond the repeal date should reflect the updated tax treatment. If desired, language may be included to address the unlikely event of future tax reimplementation.
Next steps
Stakeholders should monitor updates from the Florida Department of Revenue, which will likely publish new guidance ahead of the law’s effective date in October. Preparing systems and communication plans in advance can help facilitate a smooth transition.
The removal of Florida’s commercial sales tax on commercial real property leases removes a layer of complexity and cost from Florida’s commercial leasing process. Taking action early can help maximize the benefits of the repeal and avoid unnecessary complications.
Have questions about this repeal or other state and local tax issues? Kaufman Rossin’s team is here to help you prepare and move forward with confidence.
Ken Rios, JD, Tax Principal at Kaufman Rossin, one of the Top 50 CPA and advisory firms in the U.S.
There are lots of sports complexes that continue to charge sales tax for the hourly rental of soccer fields and courts. Does this bill apply to these short term rentals?
Thanks for the question. This repeal applies specifically to the tax on commercial real property rentals and licenses under F.S. 212.031 like office, retail, or warehouse spaces. Hourly or per-visit charges for use of recreational facilities like soccer fields, courts, golf courses, and pools are generally treated as taxable ‘admissions’ under a different statute, F.S. 212.04, which was not affected by this bill. So sports complexes should generally continue charging sales tax on those short-term facility rentals.
Good
What about common area maintenance adjustments made in 2026 for 2025 annual expenses
Thanks for the question. In general, the tax treatment is based on the period of occupancy the charge relates to, not when the adjustment is billed. If the common area maintenance (CAM) adjustment relates to 2025 occupancy before October 1, 2025, the sales tax rules in effect during that period would typically still apply.
Because CAM reconciliations and lease language can vary, it’s best to review the specific situation. Feel free to reach out to our team here.
Do we still need to report the rental income even though there is no sales tax payment required?
Great question! While the sales tax on commercial rent will be eliminated starting October 1, 2025, landlords must still report rental income for income tax purposes, regardless of sales tax. For guidance on how this change may apply to you, contact our State and Local Tax team.
Does this also apply to billboard leases?
Thank you for your question. It depends on what you are leasing. For example, billboards are typically classified as personal property (trade fixture) as in most cases, the owner of the billboard does not own the underlying property. However, in cases where the underlying property owner and billboard owner are the same person, then the billboard itself would be classified as commercial real property with the lease or license to use the billboard space taxable under 212.031 F.S., through Sept 30, 2025 and exempt on and after Oct 1, 2025.
For additional guidance, please fill out a Contact Us form and one of our tax specialists will be in contact.
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