Florida State Sales Tax for Lease of Commercial Real Property Will Fall to 5.5%

This blog post was previously published on December 20, 2018. It was updated on December 4, 2019.

Effective January 1, 2020, the Florida state sales tax rate applicable to the lease of commercial real property will decrease from the rate of 5.7% down to 5.5%. This change will directly impact leases of office space, retail space, and warehouse space, among others.

The decrease only applies to the state sales tax rate and does not impact county surtax rates. Therefore, the county surtax rate of the county where the rental property is located must be added to the state sales tax rate to obtain the applicable combined rate of state and local sales tax that should be charged by lessors to lessees on lease/rent payments.

For example, effective January 1, 2020, the lease of office space in Miami-Dade County is subject to sales tax at the combined rate of 6.5% (5.5% state sales tax + 1% Miami-Dade County surtax). Broward County enacted a 1% county surtax effective in 2019, making the combined rate of sales tax on the lease of commercial real property in the county 6.5% (5.5% state sales tax + 1% Broward County surtax).

Effective January 1, 2020, the combined state and local sales tax rate applicable to the lease of commercial real property in each county will be as shown below.

• Broward County: 6.5%
• Collier County: 6.5%
• Miami-Dade County: 6.5%
• Monroe County: 7%
• Palm Beach County: 6.5%

Additionally, there is no cap of county surtax applicable to the lease of commercial real property.

Contact me or another member of Kaufman Rossin’s state and local tax practice with any questions. We can help you understand how new and existing tax provisions may impact your business and your assets.