In a major win for Florida businesses, Governor Ron DeSantis has officially eliminated the state’s longstanding sales tax on commercial leases, effective October 1, 2025. Signed into law on June 30 via House Bill 7031, this marks the end of a tax that has been in place since 1969.
What Is Changing?
Florida businesses previously paid a 2% sales tax on rent or lease payments for commercial spaces — whether for office buildings, strip malls, warehouses, or retail storefronts. This tax, known as the business rent tax, also included any additional local surtaxes imposed by counties.
Starting October 1, 2025, that 2% tax will be fully eliminated, along with any optional county surtaxes.
Why This Matters
Florida was the only state to charge a statewide sales tax on commercial leases, often seen as a disadvantage for companies considering expansion or relocation. Industry groups, including the Florida Chamber of Commerce, Florida Realtors, and Florida TaxWatch, have long pushed for its repeal.
“This is going to make us much more competitive when recruiting or starting new businesses,” said Gary Tasman, CEO of Cushman & Wakefield Commercial Property Southwest Florida.
Impact for Tenants and Landlords
Though landlords collected the tax, tenants bore the cost — effectively increasing their rent. With this tax removed:
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Businesses will see a reduction in monthly rental costs
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Office spaces may become more competitive, especially in sectors still recovering post-pandemic
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Landlords may have an easier time leasing long-vacant spaces
“Even a 2% savings can help make a property more attractive,” said Stan Stouder, founding partner at CRE Consultants.
A Look Back
The tax rate has gradually dropped from 6% in 2017 to 2% in 2024, tied to economic performance and the recovery of Florida’s Unemployment Compensation Trust Fund. Despite rate cuts, revenue from the tax increased from $1.86 billion in 2017 to $2.64 billion in FY 2024, driven by population growth and a strong economy.
A Florida Realtors study estimates that removing the tax will generate $6 in economic activity for every $1 cut in rent tax revenue.
Who’s Affected?
The tax applied to commercial leases, including:
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Office space
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Retail and strip mall leases
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Warehouses and self-storage units
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Parking, docking, and tie-down spaces
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Convention and meeting rooms
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Licenses for vending or newspaper machines
It did not apply to:
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Residential properties
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Agricultural land
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Nonprofit organizations
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Government agency leases
What’s Next?
The law goes into full effect on October 1, 2025, providing Florida businesses with a new advantage in operating costs and leasing flexibility.
For more information, visit the Florida Department of Revenue or the Florida Chamber of Commerce.
