Florida Eliminated the Commercial Rent Sales Tax: What It Means for Tenants and Landlords

For decades, Florida had a strange distinction: it was the only state in the country that charged sales tax on commercial rent. As of October 1, 2025, that's history.

If you lease commercial space — or own it — this is one of the more meaningful changes to hit Florida commercial real estate in years. Here's the plain-English version.

What changed

As part of HB 7031, a roughly $1.3 billion tax relief package signed by Governor DeSantis, Florida repealed its Business Rent Tax (BRT) — the sales tax tenants paid on top of their commercial rent. The repeal wipes out:

• The 2% state sales tax on commercial lease payments, and
• The county discretionary surtax that stacked on top of it (which varied by county).

It applies to rent for office buildings, retail spaces, warehouses, industrial space, and self-storage units. Residential leases and short-term/transient rentals are taxed under different rules and aren't affected.

How we got here

This didn't happen overnight. The commercial rent tax was 6% as recently as 2017, and the Legislature ratcheted it down over several years — to 5.5%, then 4.5%, then 2% — before finally zeroing it out in 2025. So if you've leased space in Florida for a while, you've watched this line item shrink. Now it's gone entirely.

What it saves you

The math is simple, and it's real money:

• The tax was 2% of rent (plus the local surtax).
• A tenant paying $120,000/year in rent saves about $2,400 a year.
• A larger tenant at $500,000/year saves around $10,000 a year.
• Across Florida, businesses keep well over a billion dollars a year that used to go to this tax.

For a small business or a growing office tenant, that's not a rounding error — it's a couple of months of utilities, or a hire's worth of payroll.

The timing trap landlords and tenants should know

There's one wrinkle worth flagging. The exemption is based on the rental period, not the payment date.

• Rent covering occupancy on or after October 1, 2025 is exempt.
• Rent owed for any period before October 1, 2025 is still taxable — even if you're billing or collecting it after that date (think late payments, or a tenant catching up on arrears).

If you're a landlord, make sure your billing system and any percentage-rent or CAM reconciliations handle the cutoff correctly, and update your lease templates so you're not still quoting a tax that no longer exists.

Why it matters for Florida commercial real estate

Zoom out and this is part of a bigger story. Florida already had no state income tax and a business-friendly posture; removing the commercial rent tax sharpens that edge for occupiers deciding where to put an office, a warehouse, or a storefront. Lower occupancy costs make Central Florida space more competitive against other metros — one more reason the industrial and retail sectors here have stayed resilient.

It also pairs with what's happening on the ownership side: Florida's 2026 property tax amendment would cap assessment increases on commercial and other non-homestead property — so both renting and owning commercial space in Florida are getting cheaper to carry. (More on the ownership side in our post on the commercial property tax cap.)

The bottom line

• Florida's commercial rent sales tax is gone as of October 1, 2025.
• Tenants save ~2% of rent (plus the old county surtax) — real money on any sizable lease.
• The exemption follows the rental period, so mind the cutoff on older balances.
• Combined with no income tax and the coming property tax cap, Florida commercial space just got more affordable to occupy.

Looking at office, retail, or industrial space in Central Florida — or evaluating a commercial property to buy? Browse commercial listings on the map or reach out and we'll help you run the numbers on the new math.

Reflects HB 7031, effective October 1, 2025. General information, not tax advice — confirm specifics with your CPA or the Florida Department of Revenue.