Florida Eliminates Sales Tax on Commercial Real Estate Rent

Starting October 1, 2025, commercial lease payments are no longer subject to sales tax in Florida.

Under current law, Florida commercial real estate landlords are required to pay state and local sales tax on rent payments, a cost that is usually passed through to Tenants. Florida HB 7031, which takes effect on October 1, 2025, eliminates this tax with a few notable exceptions. Landlords must continue to collect sales taxes on rental income from motor vehicle, boat or aircraft storage and short-term residential rentals with a term of less than six months.

Florida is the only State that charges sales tax on commercial rents, which it has been doing for more than 50 years. Tenants and landlords both will benefit from discussing and preparing for the upcoming change.

Next Steps for Landlords

Landlords should not collect sales tax on or after October 1, 2025. Landlords should inform tenants of the recalculated rent amount to be charged. Where applicable, end of year rent reconciliation processes should be updated to pro-rate taxes through September 30, 2025.

Next Steps for Tenants

Don't assume your landlord knows about the elimination of sales tax. Tenants should inform their landlord and confirm the new rent amount.

Tenants with automatic rent payments should deduct the applicable tax amount from their October 2025 rent payment and future payments. If rent has been prepaid, Tenants should discuss applying the prepaid tax amount to future rent or receiving a refund from the Landlord.