By Craig Panholzer, Esq. and Michael Salad, Esq.
Effective October 1, 2025, Florida House Bill (HB) 7031 eliminates state and county sales tax on commercial leases.
Since 1969, Florida has required landlords to pay sales tax on commercial lease payments. The tax applied to base rent as well as additional rent charges paid by tenants, including but not limited to common area maintenance, insurance, utilities, property tax and property management fees. Landlords historically passed the sales tax to their tenants, increasing the occupancy cost.
HB 7031 also eliminates the county surtax, which generally ranged from 0.5 percent to 1.5 percent, depending on the county. Palm Beach, Broward and Miami-Dade County each imposed a one percent county surtax — which is now eliminated.
Tenants should carefully review their accounting of additional rent charges to confirm that sales tax is not applied to rent charges incurred on or after October 1, 2025. Likewise, landlords should refrain from collecting sales tax from commercial tenants for lease periods on and after October 1, 2025.
This change presents an opportunity for landlords and tenants to re-evaluate lease terms, adjust billing practices, and ensure compliance with the updated law. Consider consulting with your tax advisor or attorney to review your lease agreement and assess your options in negotiating a new lease agreement or a lease amendment.
Craig Panholzer is a partner in Cooper Levenson’s Business & Tax practice group in its Florida office. He concentrates his practice on business transactions, estate planning, special needs planning, probate and tax matters. Craig may be reached at (954) 889-1856 or via e-mail at cpanholzer@cooperlevenson.com.
Michael Salad is an attorney in Cooper Levenson’s Business & Tax practice group. He concentrates his practice on estate and asset protection planning, probate and trust administration, special needs planning, business transactions, mergers and acquisitions and tax matters. Michael holds an LL.M. in Estate Planning and Elder Law. Michael is licensed to practice law in Florida, New Jersey, New York, Pennsylvania, Maryland, Connecticut, Georgia, Massachusetts, Alabama, Arizona, Virginia and the District of Columbia. Michael may be reached at (954) 889-1850 or via e-mail at msalad@cooperlevenson.com.
The content of this post should not be construed as legal advice. You should consult a lawyer concerning your particular situation and any specific legal question you may have.