Florida Eliminates Commercial Rent Sales Tax: What Businesses Need to Know

Florida businesses renting office, retail, warehouse, or other commercial space may benefit from an important tax change that took effect on October 1, 2025.

The state repealed its sales tax on qualifying commercial real estate rentals, eliminating a recurring expense for many businesses.

For companies throughout Broward County, Miami-Dade County, and Palm Beach County, understanding the repeal can help ensure accurate rent payments and bookkeeping.

What changed with Florida's commercial rent tax?

Before the repeal, Florida generally imposed a 2% state sales tax on qualifying commercial rental payments, plus any applicable county discretionary sales surtax.

Effective October 1, 2025, neither the state sales tax nor the applicable discretionary sales surtax applies to qualifying commercial rental occupancy periods beginning on or after that date.

Which commercial properties are affected?

The repeal generally applies to qualifying rentals of:

• Office buildings and professional office suites

• Retail stores and shopping center spaces

• Warehouses and distribution facilities

• Certain self-storage rentals

• Other qualifying commercial real estate

For a business with substantial monthly rent expenses, eliminating this tax may produce meaningful annual savings.

Example: A South Florida business paying $10,000 per month in rent

Before the repeal, a qualifying commercial tenant paying $10,000 per month would generally have incurred $200 per month in state commercial rent sales tax, excluding any applicable county surtax.

That represents $2,400 annually in state tax alone.

With the repeal, qualifying rental periods beginning October 1, 2025, or later are no longer subject to that tax.

Do all Florida rental taxes disappear?

No.

The repeal does not eliminate taxes on all types of property rentals.

For example, short-term accommodations such as hotels and qualifying vacation rentals remain subject to applicable sales and tourist development taxes.

Certain arrangements involving parking, boat docking, or aircraft storage may also have separate tax treatment.

What should landlords and tenants review?

Commercial tenants should confirm that their landlords stopped collecting the repealed sales tax for qualifying occupancy periods.

Landlords should ensure that invoices, accounting systems, and sales tax reporting reflect the new rules.

Payments made after October 1, 2025, for earlier taxable rental periods may still be subject to the previous requirements.

A valuable tax change for South Florida businesses

With commercial rents often representing a significant operating expense, the repeal provides additional financial relief for many local businesses.

Business owners should review their rental agreements, monthly invoices, and accounting records to ensure the tax change has been implemented correctly.

James Ridout CPA works with businesses and property investors throughout Fort Lauderdale and South Florida on tax compliance, bookkeeping, and financial planning. Contact the firm to discuss how Florida tax changes affect your business.