What is Florida’s sales tax on commercial rent?

Florida’s sales tax on commercial rent is a statewide tax on leases of commercial real property, including office spaces, retail stores, and warehouses. It historically applied to both base rent and pass-through charges like CAM and insurance.

When was the commercial rent tax rate last reduced?

On June 1, 2024, the state portion of the tax dropped from 4.5% to 2.0% for rental payments made on or after that date for occupancy periods starting June 1 or later.

Has the tax been repealed yet?

The Florida Legislature voted to repeal the tax effective October 1, 2025, but the bill has not yet been signed into law by Governor Ron DeSantis.

What happens to audits and unpaid rent tax from prior years?

The repeal is not retroactive. Businesses remain liable for taxes, penalties, and interest for all audit periods before the repeal date.

Can I stop collecting rent tax from my tenants now?

No. Until the repeal takes effect and is signed by the governor, you must continue collecting and remitting sales tax on commercial leases.

Will local surtaxes be repealed too?

Yes. The repeal would eliminate both the state portion and any local discretionary surtax currently imposed on commercial rent.

Does this apply to all commercial properties in Florida?

Yes. The repeal applies broadly to commercial leases throughout the state, including office, retail, industrial, warehouse, and certain self-storage units.

What are common audit risks tied to commercial leases?

Common triggers include underreported rent, exclusion of CAM or pass-throughs, improper use of exemption certificates, and missing documentation.

What if I’m already under audit?

You are still subject to full audit procedures and exposure. The Department of Revenue can assess back taxes for open years even after the repeal is effective.

How can a Florida tax attorney help?

A qualified Florida state and local tax attorney can help defend against audits, file refund claims, review lease tax compliance, and represent your business in protest or litigation.

Florida Repeals Sales Tax on Commercial Rent — Will DeSantis Sign the Landmark 2025 Tax Cut?

By Moffa Tax Law | Florida State and Local Tax

In a major shift in Florida tax policy, the Legislature has voted to repeal the state’s sales tax on commercial rent — the only such tax in the country. Included in a massive $115.1 billion budget passed in June 2025, the repeal is scheduled to take effect on October 1, 2025, but still awaits Governor Ron DeSantis’s signature. If enacted, this repeal will reshape the leasing landscape across Florida — and set the stage for new compliance concerns as older audit periods remain open.

🧾 Understanding Florida’s Unique Commercial Rent Tax

Florida has long been an outlier in national tax policy. For decades, it was the only U.S. state to impose a statewide sales tax on commercial leases, under section 212.031, Florida Statutes. This tax applied to nearly all forms of commercial real estate:
office buildings, retail centers, warehouses, billboards, self-storage, and more. It also applied to CAM fees, tax and insurance pass-throughs, and nearly any payment required as a condition of occupancy.

📉 The Recent Rate Reduction and Full Repeal

Prior to June 1, 2024: 4.5% state rate
From June 1, 2024: reduced to 2.0%
October 1, 2025: proposed full repeal

The repeal would eliminate roughly $900 million in annual state revenue. For businesses, it means no more collecting, remitting, or reconciling monthly sales tax on leases. But exposure remains for past periods.

👀 Governor DeSantis Hasn’t Signed It

As of June 17, 2025, the bill sits on Governor Ron DeSantis’s desk. He has previously voiced skepticism about sales tax cuts, preferring property tax relief. Given the size and visibility of the repeal, there’s still uncertainty about whether he’ll sign it into law — or veto it using his line-item authority.

💼 Why This Matters to Florida Businesses

This repeal removes a longstanding financial and administrative burden on Florida landlords and tenants. It helps businesses with multi-state footprints treat Florida leases the same as in other states — and reduces audit exposure going forward.

📦 Other Key Tax Measures

Permanent sales tax holidays: back-to-school, hurricane supplies, hunting gear
Permanent exemptions: smoke detectors, fire extinguishers, life jackets
Data center tax exemption (≥15MW load with PE/CPA certification)
Forwarding agent registration and documentation requirements

🏛️ $115.1 Billion Budget Summary

$4B for school vouchers
$580M for environmental bond repayment
$250M toward general debt
Raises for state employees (2%) and law enforcement (10–15%)
Eliminates 2,238 vacant positions

💰 Rainy-Day Fund Amendment

Voters will decide in 2026 whether to approve a constitutional amendment that places 25% of general revenue — about $750 million per year — into a permanent budget stabilization fund.

🧑‍⚕️ Health and Oversight Provisions

Ends Medicaid recertification for those with developmental disabilities
New biennial nursing home satisfaction surveys
Stronger oversight of tax credits via OPPAGA and EDR

🎬 Industry Incentives

Rural investment credits
“Home Away From Home” housing credit
Film and digital media incentives

⚠️ Final Word: Audit Exposure Still Applies

The repeal is not retroactive. The Florida Department of Revenue will continue to audit commercial leases for prior tax periods — including those taxed at 4.5%, 5.5%, and 6.0%. Exposure includes:
back tax assessments, penalties up to 50%, and interest. Audits often use 1099-K reports, bank records, and lease abstracts to estimate liabilities.

What You Should Do Now

Review lease agreements for tax exposure
Ensure CAM and pass-throughs were taxed properly
Respond to audit notices (DR-1215, DR-840, etc.)
Prepare documentation or seek counsel for refunds or protests

🗳️ Conclusion: The Tax Is Going — But Risks Remain

If Governor DeSantis signs the bill, Florida will finally align with every other state by eliminating the sales tax on commercial leases. Until then, businesses must prepare for both transition and enforcement. Even after repeal, your historical compliance will still be audited — and should not be ignored.