Tenants and Florida Sales Tax - July, 2015
Did you know Florida is the only state that imposes a statewide sales tax on commercial leases? That’s right! Tenants pay 6% of their charges (base rent, CAM, and additional rent) every month to their Landlord who passes along the tax to the State of Florida. And now, for the second time in two years, the Florida Legislature has declined to extend tax relief to tenants of commercial real property.
In 2014, two separate bills proposed elimination of the sales tax. One House Bill called for a gradual reduction by 1% every year and eliminating sales tax by the year 2020. A separate Senate Bill called for the sales tax to be reduced from 6% to 5%. Both never made it to hearing.
In 2015, a similar bill was introduced to reduce the 6% tax to 5%, but stalled near the end of the session. Another bill is expected to be introduced in the 2016 session.
Despite the 6% sales tax on leases, Florida is still a great place to do business. There is no state income tax and there is plenty of sunshine to enjoy every day.