On Monday, June 16th, the Florida Legislature is scheduled to vote on the final budget and annual tax proposal, bringing an end to the extended 2025 Regular Session. An amendment to House Bill 7031 has been filed containing the details of the tax relief plan.
The cornerstone of this legislation is the complete elimination of the sales tax on commercial leases effective October 1, 2025. Florida is the only state in the nation levying such a tax, and the elimination of this tax at the state and local level will only increases the state's prominence as a top low-tax state.
At times it felt as though Florida's 2025 Regular Session would never end due to a $4.5B budget disagreement and competing tax proposals from the Governor, House, and Senate. Ultimately, the leadership of House Speaker Perez and Senate President Albritton broke the stalemate by agreeing that the elimination of the business rent tax would be the foundation of the tax plan.
This business rent tax has been levied on any lease or license to use Florida real property owned by another person since 1969. The Florida Legislature started slowly reducing this tax in 2017 by fractions of a percent. In 2021, Florida's Wayfair legislation allowed the most significant reduction of the business rent tax yet when the rate was reduced to 2.0% effective June 1, 2024. Just a year later and the Legislature is poised to completely eliminate the tax.
The repeal of this sales tax marks the first statewide tax eliminated since the intangibles tax in 2006 under then Governor Jeb Bush.
While other states are raising taxes, Florida is eliminating them. Once the bill is approved by the Legislature on Monday, it will be sent to Governor DeSantis for consideration.
Florida's commercial landlords and tenants should not collect the tax on and after October 1, 2025. If you need assistance, please do not hesitate to reach out to the Jones Walker tax team.
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.
