News Summary
Florida Governor Ron DeSantis has enacted a law to remove state and local sales taxes on commercial leases, set to take effect in October 2025. This change aims to provide financial relief to businesses, potentially saving them thousands of dollars annually. The repeal of the sales tax, which has been in place since 1969, is expected to boost Florida’s competitiveness and encourage new investments. However, businesses must be cautious as certain rental fees, such as short-term rentals, will still incur taxes. Overall, this significant policy shift is anticipated to transform the commercial landscape in Florida.
Florida Governor Ron DeSantis has signed a new law that will eliminate state and local sales taxes on commercial leases, providing significant financial relief for businesses across the state. The legislation, House Bill 7031 (HB 7031), is set to take effect on October 1, 2025, and is expected to save businesses thousands of dollars annually, with some companies estimating savings of $5,000 or more.
This pivotal change in tax policy will mark the end of Florida’s distinction as the only state in the United States that imposes a sales tax on commercial leases since the law was enacted in 1969. Over the years, the sales tax rate on commercial rents has decreased from 6% in 2017 to its current rate of 2%. With the repeal of this tax, businesses can expect to see substantial reductions in their occupancy costs.
The new law will also eliminate the discretionary County Surtax, which typically ranges from 0.5% to 1.5%. Historically, landlords have transferred these costs to tenants, raising overall expenses associated with renting commercial spaces. Thus, the repeal is anticipated to result in billions of dollars in savings statewide for commercial tenants.
Local business owners have expressed enthusiasm about the tax cut. The change is viewed as a significant boost to Florida’s competitive edge, making the state more attractive to out-of-state businesses. The real estate market is expected to benefit as well, with property owners anticipating that increasing occupancy rates and property values may follow the removal of the tax burden on tenants.
However, tenants should remain vigilant. Under the provisions of House Bill 7031, taxes on short-term rentals (defined as rentals less than six months), boat slips, parking facilities, and self-storage units will continue to be taxable. Tenants are advised to carefully review their lease agreements and ensure that sales taxes are not incorrectly applied to the rent amounts after the October 2025 repeal date.
Landlords will be required to stop collecting sales tax on commercial rent payments for lease periods occurring after October 1, 2025. Nevertheless, they will still need to apply taxes on payments due before that date, ensuring a clear division between taxable and non-taxable rents during the transition period.
To prepare for the upcoming changes, businesses should update their accounting and invoicing systems adequately. This proactive approach will help avoid confusion once the sales tax repeal goes into effect. Commercial real estate agents emphasize that the elimination of the sales tax will create a level playing field for Florida businesses, thus positively impacting the commercial real estate market as overall demand increases.
This repeal of the sales tax on commercial leases is a decisive move aimed at fostering economic growth in Florida. By easing the financial burden on businesses, the state hopes to attract new investments and promote a more vibrant economic climate. As October 2025 approaches, Florida’s commercial landscape is set to undergo a transformation that may redefine business operations for years to come.
Deeper Dive: News & Info About This Topic
- CLA Connect: Florida Repeals Commercial Rent Tax
- Nixon Peabody: Florida Eliminates Sales Tax on Commercial Real Estate Leases
- Holland & Knight: Florida HB 7031 Becomes Effective Oct 1, 2025
- PwC: Florida Repeals Sales Tax on Commercial Rent
- Wikipedia: Taxation in the United States
Author: STAFF HERE PETERSBURG WRITER
ST PETERSBURG STAFF WRITER The ST PETERSBURG STAFF WRITER represents the experienced team at HEREStPetersburg.com, your go-to source for actionable local news and information in St Petersburg, Pinellas County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Grand Prix of St. Petersburg, Localtopia, and SHINE Mural Festival. Our coverage extends to key organizations like the St. Petersburg Area Chamber of Commerce and St. Pete Downtown Partnership, plus leading businesses in finance, manufacturing, and healthcare that power the local economy such as Raymond James Financial, Jabil, and Bayfront Health St. Petersburg. As part of the broader HERE network, including HEREJacksonville.com, HEREOrlando.com, HERETallahassee.com, and HERETampa.com, we provide comprehensive, credible insights into Florida's dynamic landscape.
