It's important to note that the repeal of the sales/use tax imposed on the lease of commercial real property effective October 1, 2025, does not cover the rental or lease of parking spaces. This is due to parking being taxed under a separate section of the sales & use tax law (Sec. 212.03(6)(b), F.S.) than the repealed section covering the lease of commercial space (Sec. 212.031, F.S.).
Many leases for office, retail or warehouse space will include parking in some form as part of the overall lease. Depending on the specific lease structure and terms, this may or may not result in the taxable rental or lease of parking spaces occurring under the lease.
To facilitate guidance in this area, the following is a series of common situations involving leases which include parking and the corresponding sales tax treatment of each.:
Building and parking lot under one lease
A single lease covers the lease of a building together with a parking lot. The lease language is silent as to whether some portion of the lease payment is attributable to the parking lot verses the building. In such situations, the lease in its entirety is treated as the lease of commercial real property with no portion treated as the lease of parking. Lease payments under such leases for periods on or after Oct. 1, 2025, are not subject to sales/use tax.
Reserved parking spaces with a stated rate
A single lease covers the lease of office, retail or warehouse space to a tenant and includes express language stating that the tenant is provided a specified number of reserved parking spaces at a specific rate per space in landlords adjacent for-pay garage. In such situations, the landlord is considered to be engaged in the activity of leasing or renting parking spaces and is required to charge, collect and remit sales tax on the specific rate per parking space being charged to the tenant.
Tenant re-leases parking to employees
Same facts as the preceding example except that the tenant in turn charges a per-space parking fee to its employees. In such situations, the tenant is considered to be engaged in the lease or rental of parking spaces. As such, the tenant is responsible to register for sales tax purpose, extend a resale certificate to its landlord covering parking and in turn charges and collects sales tax from its employees on the per-space parking charge and remits same to the Florida Dept. of Revenue (FDOR).
Parking included with no separate charge
A lease covers the lease of office, retail or warehouse space to a tenant. The building has parking facilities, and the lease terms provide that the tenant either has access to a certain number of reserved parking spaces and/or has general access to parking on a non-reserved basis. No separate charge is made under the lease terms for parking. In such situations, the landlord is not considered to be engaged in the lease or rental of parking spaces. Accordingly, the overall lease payment is treated as the lease of commercial real property with no portion attributable to parking. Accordingly, the lease payments under such lease for periods on or after Oct. 1, 2025, are not subject to sales tax.
Parking concession operator arrangement
The landlord of a commercial building with both tenants leasing either office or retail space, enters into an agreement with a parking concession (PC) operator to operate the landlord's parking deck adjacent to the building. The agreement calls for the landlord and the PC operator to split the proceeds from the parking fees charged by the PC operator to tenant employees and customers for parking. In such situations, the PC operator is considered to be engaged in the lease or rental of parking spaces. As a result, the PC operator is responsible to register for sales tax purpose, extend a resale certificate to the landlord covering use of the parking facility and to in-turn charge and collect sales tax from the tenant's employees and customers on the per-space parking charge and to remit same to the FDOR.
Key takeaway for tenants
Tenants should also be aware that if their landlord fails to charge and collect sales tax on specific per-space parking charges under their lease terms, the tenant will remain liable for use tax on such amounts in the event of a sales/use tax audit by the FDOR. Consequently, tenants should self-accrue and remit use tax directly to the FDOR on such specifically identifiable per-space parking charges where the landlord is failing to charge them sales tax.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
