Florida to Eliminate Sales Tax on Commercial Leases - Effective October 1, 2025

Big news for Florida businesses and commercial property owners: House Bill 7031, signed into law on June 30, 2025, will eliminate the state sales tax on commercial lease payments — and any local surtaxes — beginning October 1, 2025.

🔍 What’s Changing?

• The repeal targets Section 212.031, Florida Statutes, which previously imposed a 2% state sales tax (plus local surtaxes) on commercial rent. HB 7031 fully eliminates this.
• Florida will no longer be the only state imposing a sales tax on commercial rent.

🗓 Effective Date

• Applies to occupancy periods beginning on or after October 1, 2025.
• Prepaid rent covering occupancy dates before October 1 remains taxable, even if paid afterward.

🧾 What’s Still Taxable?

Certain real estate “rental” categories remain taxable under separate statutes:

• Short-term residential rentals (<6 months)
• Parking structures/facilities
• Boat slips/docking
• Self-storage units
• Equipment rentals (e.g., forklifts)

🏢 What Landlords Need to Do

• Update billing systems to remove state and local tax for lease invoices dated October 1, 2025, or later
• Ensure sales tax is still collected on rent for periods before October 1—even if paid later

👔 What Tenants Should Do

• Review lease agreements and invoices to confirm tax is no longer being charged for eligible lease
  periods.
• Double-check that prepaid rent covering periods before October 1 includes the correct tax.

🛡️ Compliance & Audit Considerations

Florida Department of Revenue retains a three-year audit window, meaning past underpayments may still arise. Landlords and tenants alike should maintain records and consider filing “zero returns” post-repeal to obtain compliance certificates.

💼 Why This Matters

This marks a substantial tax relief for businesses across Florida:

• Estimated savings exceed $1 billion annually
• Improves Florida’s appeal for commercial investment and occupancy
• Encourages tenants to reallocate capital toward growth initiatives rather than tax liabilities

Need help implementing or updating your leasing and invoicing processes? At NAI Southcoast, we work alongside property owners, tenants, and stakeholders to create long-term value.