Florida to Eliminate State Sales Tax on Commercial Rentals – What Investors and Tenants Need to Know (Florida Department of Revenue Tax Infomation Publication Link)

A major change is coming to Florida’s commercial real estate market. Starting October 1, 2025, the State of Florida will eliminate the state sales tax and any applicable discretionary surtax on qualifying commercial rentals.

This repeal will apply to rental or license fees for occupancy periods beginning on or after October 1, 2025, and it’s expected to provide significant cost savings for tenants and a competitive advantage for landlords.

What’s Covered
The change applies to most commercial property types, including:

  • Office space

  • Retail space

  • Warehouse facilities

  • Self-storage units

What’s Not Covered
Certain property types will remain taxable, including:

  • Transient rentals

  • Parking or storage for motor vehicles

  • Docking for boats

  • Aircraft storage

Rental payments for periods before October 1, 2025, will still be subject to sales tax, even if the payment is made after the effective date.

Key Dates & Action Steps

  • Through September 30, 2025: Continue collecting and remitting sales tax on applicable commercial rents.

  • October 1, 2025, and beyond: Stop collecting sales tax on qualifying commercial rental payments.

  • Refunds: If sales tax is mistakenly collected for periods after October 1, 2025, landlords must refund tenants before seeking reimbursement from the Florida Department of Revenue.

Why This Matters
The elimination of sales tax on commercial rents means more money in tenants’ pockets and greater leasing appeal for property owners. It also simplifies bookkeeping and compliance for landlords.

Next Steps for Owners and Tenants
To prepare for this transition, review your lease agreements, invoicing procedures, and accounting systems well in advance. Adjusting now will ensure a smooth changeover on October 1, 2025.

If you have questions about how this repeal may affect your lease or investment strategy, contact me directly to discuss your options.