Effective October 1, 2025, the state of Florida no longer requires sales tax or discretionary sales surtax on commercial lease payments. This landmark change eliminates a longstanding tax burden and can help streamline related party lease transactions which may have been structured to minimize Florida sales tax (e.g. management services agreements and the like may no longer be necessary).
Effective Date: October 1, 2025
- What’s changing? Florida has repealed Section 212.031, F.S., eliminating the state’s sales tax and any local surtax on commercial real property leases.
- What’s covered? Office space, retail units, warehouses, and other commercial rentals.
- What’s excluded? Short-term residential rentals, parking spaces, boat slips, and aircraft hangars remain taxable under Section 212.03.
Filing Requirements: Pre- and Post-October 1, 2025
Before October 1, 2025:
- Sales tax still applies to rent or license fees for occupancy periods before October 1 — even if paid after that date.
- Example: If August or September rent is paid in October, it remains taxable.
After October 1, 2025:
- No sales tax due on rent for occupancy periods beginning October 1 or later.
- Accounts used solely for commercial lease tax reporting will be updated by the Department of Revenue after final returns are received.
- Refunds: If tax was collected and remitted for post-October occupancy, landlords may file Form DR-26S to request a refund.
Action Items for Lessors and Lessees
- Review lease agreements and payment schedules to ensure proper tax treatment.
- File all required returns through the final reporting period.
- Retain documentation for any rent adjustments or late payments tied to pre-October occupancy.
- Consider successor liability issues if transferring commercial property.
