Effective October 1, 2025, Florida will no longer assess state sales tax or the local surtax on rent from commercial leases. This eliminates Florida state sales tax and county surtaxes on base rent, operating expenses and all other charges payable to landlords under commercial leases in the form of rent on leasing commercial real property such as retail stores, offices or warehouses.
Sales tax will continue to be payable in connection with transient rentals, such as hotel rooms or other rentals of residential property for a term of 6 months or less. Additionally, sales tax will continue to be assessed on rents for parking and storage spaces for vehicles, boats and aircraft.
Rent owed under commercial leases for the period prior to October 1, 2025 will be taxable, even if paid after October 1, 2025.
Suggestions for Landlords:
- Landlords whose sales and use tax account is used only to report sales tax on commercial rents must continue filing through the end of September, 2025. There is no need to close your account.The Florida Department of Revenue will update your account status after your final filing.
- Revise (again) your billing systems. Over the past several years, the State has reduced, on several occasions, the sales taxes due on commercial leases. This final revision now eliminates the tax and billing systems should reflect that.
- Review and consider the effect on your lease agreements. Most Florida form leases contain language requiring the tenant to pay sales tax on rents. Landlords may be tempted to remove this language and tenants might attempt to strike it.Under most circumstances, to provide for the best flexibility for the Landlord, a better practice may be instead to revise your forms to state that the tenant would pay all sales tax (if any) that may be imposed.
Suggestions for Tenants:
- Review your statements as you receive them to confirm that the landlord is not charging sales tax on rents after October 1, 2025.
- Revise billing systems or charges assessed to any subtenants to ensure that you are not assessing sales tax on sublease rents.
Florida businesses and those looking to relocate or expand to Florida will pay lower occupancy costs due to the repeal of sales tax on commercial leases. Even so, landlords and tenants should be taking immediate steps to avoid making overpayments in the administrative transition.
Heather S. Moraes is a firm shareholder representing both regional and national clients in all aspects of commercial real estate, with a focus on commercial leasing and development. She is a member of The Florida Bar Real Property, Probate and Trust Law Section, and an active member of the International Council of Shopping Centers (ICSC). She has received the “AV Preeminent” rating by Martindale Hubbell, has consistently been named a Best Lawyers in America© in real estate law and is an alumnus of Leadership Winter Park, Class XXIX. She has authored numerous articles on real estate and corporate law, some of which have been selected for national publications. She has also spoken to several trade and other organizations on areas of interest in commercial real estate. Heather received a J.D. degree from the University of Florida Levin College of Law.