Florida ends sales tax on commercial leases in 2025
Florida has officially repealed its longstanding sales tax on commercial leases. As of October 1, 2025, businesses will no longer be charged sales tax on base rent or common operating charges.
Written by Ryan Pinkham
VP of GTM
Published
TL;DR
Florida has eliminated its sales tax on commercial leases, effective October 1, 2025. It was the only state in the U.S. to tax business rent — until now.
What changed
Florida has finally dropped its tax on commercial leases — a policy that had been in place since the 1960s.
The change eliminates Florida’s 2 % state sales tax and any local discretionary surtax on commercial lease payments
This means businesses signing new leases in Florida no longer owe sales tax on rent or related charges, including:
- Common area maintenance (CAM) fees
- Utilities
- Insurance
- Property taxes
- Management fees
The repeal was signed into law by Governor Ron DeSantis in June 2025 and took effect October 1.
Why it matters for sellers
This is a rare tax rollback, not an expansion — and a potentially lucrative one.
- In 2017, Florida’s state-level sales tax on commercial leases was 6%
- It applied not only to base rent, but to nearly every line item in the lease: CAM fees, utilities, property taxes, and more
- Over time, the state rate was phased down to 2%, but counties were still allowed to add local surtaxes — pushing total tax rates above 2% in many areas
- And because the tax applied to the full lease amount, not just rent, it had a material impact on expansion decisions and lease negotiations
As of October 1, 2025 — the state tax is fully repealed, and counties can no longer levy lease surtaxes either.
For sellers expanding into Florida — especially those opening warehouses, offices, or brick-and-mortar stores — this means:
- Lower up-front costs on leases
- Fewer surprises in occupancy budgets
- More cash to reinvest in growth
And according to some estimates, the repeal could save Florida businesses up to $900 million per year. [1]
What was once a costly outlier is now gone. And that’s money back into budgets for hiring, marketing, fulfillment, and growth.
Next steps for sellers
- Recalculate expansion budgets — this change may open the door to a bigger footprint in Florida
- Talk to your CPA to evaluate potential long-term savings
- Review lease agreements and billing periods to confirm how the repeal applies
- Add Florida to your short list — especially if you’re weighing it against higher-cost states
FAQs
Yes. As of October 1, 2025, Florida has repealed its 2% state sales tax and all local surtaxes on commercial lease payments.
The repeal applies to rental periods beginning October 1, 2025 — even if the payment was made before that date.
If rent was paid in advance for periods on or after October 1, it’s not subject to sales tax, even if the payment was processed earlier.
Florida was the only U.S. state still taxing commercial leases. The repeal is the final step in a multi-year phaseout that began in 2017.
The tax wasn’t limited to base rent — it also covered CAM fees, utilities, insurance, property taxes, and management fees.
No. Local surtaxes on commercial leases were also repealed as part of HB 7031.
No. The repeal only applies to commercial leases. Florida still taxes equipment rentals, short-term lodging (under 6 months), and vehicle/boat storage.
Official sources:
-
1.
CoStar Florida's repeal of commercial lease sales tax expected to save tenants $900 million a year. Source link
- 2.
Disclaimer
TaxCloud provides sales tax compliance solutions. We do not provide legal or tax advice. For questions about your specific tax situation or filing requirements, we recommend consulting a qualified sales tax accountant.
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