Florida Commercial Rent And License Fees May See Decrease Under New Law

Unlike most states, Florida imposes a sales tax on commercial rent or license fees, regardless of the length of the term. During the most recent legislative session, the Florida legislature passed and Gov. Ron DeSantis signed into law a bill that might adjust the sales tax rate once the unemployment compensation trust fund is replenished to a certain level. While this provides hope for an eventual reduction in sales tax for commercial leasing parties, the next steps are more complicated and should be reviewed carefully.

Current State and Discretionary Sales and Use Tax

Currently, pursuant to Florida law, there is a statewide tax of 5.5 percent on any commercial rent or license fees for the use of commercial real property, regardless of the length of the term of the lease. The tax is imposed not only on base rent but also on any other "rent" amounts, such as percentage rent, common area maintenance charges, insurance and other "pass-through" expenses paid by a