Please ensure Javascript is enabled for purposes of website accessibility

941 954 9991

Commercial real property leases

New Sales Tax on Commercial Leases

Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

The Florida Legislature cut the state sales tax rate on commercial real property lease payments from 5.5% to 4.5% for leases with occupancy periods beginning on or after December 1, 2023. This reduction is applicable to real property such as commercial offices, retail, warehouse, and self-storage units. It is important for landlords and property management companies to be aware of this reduction and ensure records are up to date.

Calculation of Sales Tax Based on Occupancy Period

Sales tax is due at the rate in effect during the time the tenant occupies or is entitled to occupy the real property, regardless of when the rent is paid.

Specifics on Rental Charges and Payment Timing

• Rental charges paid on or after December 1, 2023, for rental periods prior to December 1, 2023, are subject to 5.5% state sales tax plus any applicable discretionary sales surtax.

• Rental payments made prior to December 1, 2023, that entitle the tenant to occupy the real property on or after December 1, 2023, are subject to 4.5% state sales tax plus any applicable discretionary sales surtax.

Exceptions to the Reduced Sales Tax Rate

The reduced state sales tax rate on commercial rentals does not apply to the tax rate imposed on parking or storage of motor vehicles, docking or storage of boats, or tie-down or storage of aircraft.

Local Discretionary Sales Surtax Implications

Note that the sales tax reduction does not affect the local discretionary sales surtax imposed by many Florida counties. The new combined sales tax and discretionary sales surtax rate for Hillsborough County is 6%; in Charlotte, Pasco, Manatee, Sarasota, and Pinellas Counties, it is 5.5%; and in Lee County, it is 5%.

Potential Further Reductions Under Senate Bill 50

Last but not least, under Senate Bill 50, the state rate may be reduced further to 2% by the third quarter of 2024 if Florida’s Unemployment Trust Fund is replenished to the pre-pandemic level.

As always, if you have questions about the new tax rates for commercial real property leases, reach out to your trusted real estate attorney to learn more.

David Reider, Esq.

David Reider, Esq.

David focuses his practice on residential and commercial real property transactions

Newsletter Sign Up

Here's How It Works:

Simple Submission: Using Payload, you can send your EMD funds. The platform is designed to ensure your transaction is both secure and hassle-free.

Transparent Fee Structure: A nominal processing fee of $12.00 will be applied to your transaction. This fee is disclosed during the submission process.

Instant Confirmation: Once your transaction is completed, you’ll receive an immediate confirmation email from Payload. Our accounting team will also be promptly notified, usually within minutes of the transfer.

Specifically for EMD: Payload is exclusively for submitting your Earnest Money Deposit ONLY. It is not to be used for final closing proceeds or any other payments.

Deposit Limit: To maintain the integrity of our process, we have set a maximum deposit amount of $100,000.00 for EMD submissions.