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Florida Reduces the Sales Tax on Commercial Real Estate Leases in 2018 by Karen A. Lake, CPA

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Posted on December 22, 2017 by Karen Lake

Effective Jan. 1, 2018, Florida’s sales tax on the total rental payments that commercial real estate owners receive for leasing their properties decreases from 6 percent to 5.8 percent. The reduced rate applies to the rental, leasing, letting and granting of a license to use certain commercial property for occupancy periods that begin on or after the first of the New Year.  When a tenant occupies or has a right to occupy a covered property before Jan. 1, 2018, the 6 percent sales tax will apply.

 

Under a bill signed into law by Gov. Rick Scott, the .2 percent sales-tax reduction applies to leases and rentals of commercial property, including office and retail space, warehouses and self-storage units, when the tenant occupied or was entitled to occupy a property prior to Jan. 1, 2018. Excluded from the lower sales tax rate are rentals for parking or storing automobiles or towed vehicles in lots or garages, docking or storing boats at docks or marinas, or the rental of tie-down or storage space for aircraft at airports, all of which will be subject to a rate of 6 percent on the total rental charged.

 

As a result of the sales tax reduction, commercial property owners and managers should review their lease arrangements and update their systems and invoice software to reflect the change.

 

About the Author: Karen A. Lake, CPA, is State and Local Use Tax (SALT) specialist and an associate director of Tax Services with Berkowitz Pollack Brant, where she helps individuals and businesses navigate complex federal, state and local tax laws, credits and incentives. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.