Florida imposes sales tax on commercial leases of real property, including industrial, office, and retail properties. If the real property is occupied by a for-profit business, it is generally considered commercial, subject to a few exceptions as set forth in Section 212.031, Florida Statutes. Effective June 1, 2024, the sales tax imposed on commercial leases dropped from 4.5% to 2.0%, plus any applicable discretionary sales tax levied by the county in which the property is located. The total rent charged for the privilege to use or occupy real property includes base rent, percentage rents, and similar charges. The sales tax is in addition to the total amount of the rent and is due and payable at the time the tenant pays its rental payments.
The date that the tenant occupies the property will determine the rate that applies, regardless of when the payment is made. If a tenant pays rental fees after June 1, 2024, for periods of occupancy from December 1, 2023, through May 31, 2024, the rate of 4.5% plus any discretionary sales tax will be imposed on the total rent. For rental payments made after June 1, 2024, for periods of occupancy on or after June 1, 2024, the rate of 2% plus any discretionary sales tax will be imposed on the total rent. The applicable tax rate may not be avoided by delaying or accelerating rent payments.
Commercial landlords and tenants should take note of this change and adjust their total monthly rental payments beginning June 1, 2024.
Susan J. Salamone is an Associate in the Real Estate Group and focuses primarily on commercial real estate.