Florida has distinct taxation policies that distinguish it from other states. Notably, it imposes sales tax on commercial rentals and has been gradually reducing the sales tax rate in recent years. Individuals and businesses involved in leasing or renting commercial real estate in Florida need to comprehend the intricacies of this regulation, such as what constitutes rental consideration and which aspects of a lease may be exempt from the tax base.

In Florida, the lease, rental, or licensing of commercial real property is subject to state sales tax. This tax encompasses any payment made for the privilege to occupy or utilize the property, including base rent, additional rental fees, and other mandatory payments specified in the lease agreement. Any lessor of real estate must register with the Florida Department of Revenue before engaging in business or entering into a commercial lease.

Over the years, the sales tax rate on commercial rentals in Florida has gradually decreased. Currently set at 4.5%, the state tax on commercial property rentals will be further reduced to 2% effective June 1, 2024. Initially slated for July 1, 2024, this reduction aims to benefit businesses operating in Florida.
Despite the reduction in the state tax rate, counties that impose a surtax will continue to apply it. In 2024, surtax rates vary from 0.5% to 1.5%, with the exception of Collier County, which eliminated the surtax by the end of 2023.

It’s essential to note that each commercial rental property location is considered a distinct entity and necessitates its own tax certificate. While Landlords or their representatives are usually responsible for registering, collecting, and remitting the tax, tenants may become liable for the tax if the landlord fails to meet these obligations. This scenario, known as use tax, may become a concern during a sales tax audit. Lessors and lessees of commercial rentals should carefully review lease agreements for clauses relating to sales taxes, including the tax base calculation and applicable tax rates.

The business rental tax, encompassing rentals of commercial office or retail spaces, warehouses, self-storage units, and mini-warehouses, does not cover sales and use taxes on parking lots, boat docks, and aircraft hangars, as separate regulations govern these categories.