What’s changing?
Effective
October 1, 2025, Florida will eliminate the
state sales tax and local discretionary surtaxes on commercial lease payments. This change applies to office, industrial, warehouse, and retail spaces.
Who does this affect?
Businesses that lease commercial property in Florida—including tenants and landlords—should prepare for the repeal, especially if pass-through charges such as
property taxes or insurance were previously subject to sales tax.
What does the repeal apply to?
The repeal applies to lease payments
based on the occupancy period, not the payment date. That means any lease covering occupancy
on or after October 1, 2025 will no longer trigger sales tax—even if payments are made in advance.
Why it matters:
This is a significant shift in how commercial property is taxed in Florida. For multi-location operators, real estate teams, and accounting departments, this change will impact
lease structuring, invoicing, and budgeting for the upcoming year.
How to prepare:
- Review lease agreements for Florida locations
- Adjust invoicing procedures beginning Q4 2025
- Consider implications for 2025 budgeting and accruals
Baden Tax Management will continue monitoring state tax changes affecting commercial and industrial property across the U.S.
