Highlights
- Florida Gov. Ron DeSantis recently signed House Bill 7031 into law, enacting sweeping changes to Florida's tax statutes that include updates to the sales tax on commercial leases, sales tax relief, certain corporate income tax definitions, the introduction of the "Home Away From Home" Tax Credit and revisions to property tax appeal procedures.
- Main provisions will take effect at various points in 2025 and 2026.
- This Holland & Knight alert takes a closer look at some of the key provisions. Prompt action and continued monitoring of agency guidance are recommended to ensure compliance.
Florida Gov. Ron DeSantis signed into law House Bill (HB) 7031 on June 30, 2025, enacting sweeping changes to Florida's tax statutes, including updates to the sales tax on commercial leases, sales tax relief, certain corporate income tax definitions, the introduction of the "Home Away From Home" Tax Credit and revisions to property tax appeal procedures.
Main provisions will take effect at various points in 2025 and 2026.
Commercial Leases
Historically, the state of Florida has been one of the few jurisdictions to assess sales tax on the lease of commercial real property. In previous legislation, the state sales tax rate has been reduced. However, under HB 7031, state sales tax on leases of commercial real property will be eliminated effective Oct. 1, 2025.
The repeal applies based on the occupancy period, so rent for periods after that date will not be taxed (even if prepaid). However, sales tax remains due for occupancy before Oct. 1, 2025, regardless of when payment is made. Short-term residential rentals, parking, docking and equipment rentals remain taxable under separate Florida statutes.
Both landlords and tenants should take note of this repeal to the sales tax on commercial leases and review their agreements and legal requirements for the remainder of the calendar year.
Sales Tax Relief
HB 7031 establishes sales tax relief for various products, including holidays for such tax. For example, there is a new sales tax holiday for certain hunting, fishing and camping equipment for the period of Sept. 8-Dec. 31, 2025.
The legislation expands sales and use tax exemptions to cover admissions to certain live events, such as theater, opera and ballet, as well as state park entry fees and a variety of recreational activities. These measures are intended to make cultural and recreational opportunities more accessible while also supporting Florida's tourism and nonprofit sectors.
In addition, all sales of gold, silver and platinum bullion are now exempt from sales tax, regardless of price. Previously, there was an exemption only for transactions in excess of $500.
There is also a permanent Back-to-School Sales Tax Holiday during the month of August for clothing, shoes, backpacks, school supplies and personal computers or computer-related accessories. Furthermore, there are now permanent exemptions for sales tax on certain batteries, fuel tanks, portable generators, tarps and ground anchors or tie-down kits. Additionally, there are exemptions for certain health and safety items, including fire extinguishers, smoke detectors, carbon monoxide detectors, sunscreen insect repellent, life jackets and bicycle helmets.
Retailers and service providers are advised to update point-of-sale systems to reflect new tax holidays and exemptions.
Data Center Exemptions Extension
The exemption certificate deadline for qualifying data centers is now extended from 2027 to 2037. The minimum power threshold is 100 megawatts (MW), a 85-MW increase from the recent 15-MW threshold. This aims to attract large-scale infrastructure investment in Florida's technology sector. Data center operators should assess eligibility under the extended exemption provisions.
Corporate Tax
On the corporate side, Florida's Income Tax Code is brought into conformity with the federal Internal Revenue Code as of Jan. 1, 2025, including nonprofit organization treatment following 501(c)(3) of the federal Internal Revenue Code. The definition of "corporation" is also updated, effective Jan. 1, 2026, clarifying that charitable trusts are not corporations for Florida corporate tax purposes.
Home Away From Home Tax Credit
A major new incentive is the Home Away From Home Tax Credit, which allows businesses to claim a credit for contributions to eligible charitable organizations that provide housing to families of critically ill children. This credit is available against corporate income tax, insurance premium tax and certain excise taxes, and is subject to specific eligibility requirements for both donors and recipient organizations.
Property Tax
HB 7031 also revises property tax procedures, increasing filing
fees for Value Adjustment Board petitions and updating the appeals
process. Notably, it introduces enhanced notice requirements and
options for electronic hearings. Deadlines for contesting tax
assessments in circuit court are clarified, which provides further
certainty for taxpayers and local governments.
There are other provisions and nuances in the new legislation.
Prompt action and continued monitoring of agency guidance are
recommended to ensure compliance with the new law. For more
detailed information on this legislation, please contact one of the
authors or another member of Holland & Knight's State and Local Tax Team.
Holland & Knight Summer Associate Jennifer St. George also contributed to this alert.
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.
