The Tax Times: Florida Eliminates Sales Tax on Commercial Rent: What Tenants and Landlords Need to Know

A major change is coming to Florida’s commercial real estate market—and it’s great news for both tenants and landlords. Starting October 1, 2025, businesses leasing commercial space in Florida will no longer have to pay state or local sales tax on their rent. This long-awaited move, signed into law by Governor DeSantis on June 30, 2025, is set to bring significant savings and simplify leasing for everyone involved.

Here’s what you need to know about this new law and how it will affect your lease, payments, and responsibilities.

What’s Changing?

Florida has been the only state in the nation to tax commercial lease payments. With the passage of House Bill 7031, that’s finally ending. Effective October 1, 2025, all state and local sales tax on commercial rent will be eliminated. This applies to office, retail, and industrial leases across the state.

What Tenants Should Know

Immediate Savings:
If you’re renting commercial space, your monthly rent just got less expensive. For example, a business paying $5,000 a month in rent and previously paying a 2% state sales tax (plus any local surtax) will save at least $100 a month, or $1,200 a year. In some counties, the savings will be even greater.

Lease Agreements:
Review your lease. Any clauses that reference “applicable sales tax” on rent will no longer apply after October 1, 2025. If you have automated payments set up, make sure you update them to remove the tax portion for rent due after that date.

Subleases:
If you sublease your space, let your subtenants know that sales tax will no longer be added to their rent payments after the change goes into effect.

What Landlords and Property Managers Should Do

Update Invoices and Billing:
Remove sales tax from rent invoices for occupancy periods starting October 1, 2025. Update your billing systems and templates to prevent accidental overcharging.

Remit Pre-Repeal Taxes:
Sales tax is still due for rent covering periods through September 30, 2025—even if tenants pay late. Make sure you remit all taxes collected for those periods.

Communicate with Tenants:
Let your tenants know about the change so there’s no confusion. Clear communication will help ensure a smooth transition.

Sales Tax Accounts:
After you’ve remitted all required taxes, you can close your sales tax account with the Florida Department of Revenue if you don’t have other taxable activities.

What’s Not Changing

Not all leases are covered by this repeal. The following will still be subject to sales tax in Florida:

· Short-term residential rentals (leases under six months)

· Parking facilities

· Boat slips and docking

· Self-storage units and aircraft hangars

Also, if you receive late payments for periods before October 1, 2025, those payments are still taxable—even if paid after the repeal date.

The Bottom Line

This repeal is a big win for Florida’s business community. Tenants will see real savings, and landlords will enjoy simpler billing and compliance. Both should review their leases, update their systems, and communicate with each other as the October 1, 2025, effective date approaches.

Florida’s commercial leasing landscape is about to get a lot more business-friendly. Get ready to take advantage of the change!

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