Client Alert: Update on Florida Commercial Rent Sales Tax Rates
April, 2024 - United States of America
Big news is on the horizon that could impact your leasing agreements and bottom line. Starting June 1, 2024, the sales tax rate on commercial rent in Florida is set to undergo a significant decrease, dropping to 2.0% statewide. However, it’s crucial to note that counties with a local option discretionary sales surtax, including Miami-Dade, Broward, and Palm Beach, will have a tax rate of 3.0%.
Many leases typically include language referencing “applicable Florida sales tax.” Even if your lease specifies a rent table or simply states “plus sales tax,” the new law governs, and the tax rate decreases apply.
However, it’s crucial to keep in mind that while the new tax rates will apply to future rental periods, any delinquent rent from periods before June 1, 2024, will still be subject to the previous rate of 4.5% (plus 1% if applicable), regardless of when it’s collected.
These changes exclusively pertain to commercial rentals. If you’re in the business of leasing or renting out transient accommodations for six months or less, providing parking or storage spaces, docking or storage spaces for boats, or tie-down or storage space for aircraft at airports, the reduced state sales tax does not apply to you.
So, what’s next for you as a Florida commercial landlord? It’s time to review your lease agreements and ensure they reflect the updated tax rates. If you’re unsure about how to navigate these changes or need assistance in ensuring compliance, the Real Estate team at Greenspoon Marder is able to assist.
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