Florida has imposed a business rent tax, also called a commercial lease tax, since 1969.
Florida’s commercial lease tax typically applies not only to base rent but to additional fees charged to tenants, such as common area maintenance fees, insurance, property management fees, utilities, and even real estate taxes. The law states that such charges shall be included in the total rent or license fee subject to tax “whether or not they can be attributed to the ability of the lessor’s or licensor’s property as used or operated to attract customers.”
The Florida Legislature started reducing the business rent tax in 2017 and lowered the state tax to 2% in 2024, though counties could still apply a discretionary County Surtax on commercial rentals. With the enactment of House Bill 7031, both the state and local sales tax on commercial property in Florida are fully repealed as of October 1, 2025.
Repealing the business rent tax will cost the state close to $1 billion in sales tax revenue, according to the Institute on Taxation and Economic Policy. It should also reduce occupancy costs for commercial tenants. While property owners are liable for the commercial lease tax, landlords usually pass it on to tenants.
Exceptions
Florida sales tax will still apply to equipment rentals; fees to park, dock, or store motor vehicles, boats, and aircraft; and short-term residential rentals of six months or less.
The repeal of the commercial lease tax puts Florida in step with how other states tax business rents. However, Avalara VP of Government Relations Scott Peterson notes that Florida is likely still an outlier when it comes to taxing rent for longer than 30 days. “Most states stop taxing hotel and other accommodations after 30 days because at that point the person is renting long-term lodging,” he observes.
