One expense for business owners in Florida is set to ease up in the near future: the state tax on rent for businesses is set to decrease from 4.5% to 2.0% by June 1st. The drop is in accordance with legislation signed by Governor Ron DeSantis in 2021 aimed at addressing the recovery of Florida businesses out of the COVID-19 pandemic.
The main provision of SB 50 was to mandate that online retailers collect state sales tax, a measure aimed at increasing revenue to compensate for pandemic spending. Another provision held that once the state’s unemployment trust fund returned to its pre-pandemic level of $4 billion, the state’s business rent tax would be cut.
The drop will be the second reduction in business rent taxes since last year; in 2022 the state legislature approved a decrease from 5.5% to the current 4.5% which took effect in December 2023. In a time when many metropolitan areas are seeing locally-owned businesses increasingly competing against national and regional chains, small business owners are hoping the relief will help them keep their doors open.
Florida is the only state in the United States which imposes a sales tax on businesses for their commercial property leases. The average rent for class A office space in Florida was $36.87 per square foot as of 2023 according to CommercialCafe, equating to a rent of $0.7374 per square foot under the reduced rate. It would come out to $0.5504 per square foot for class B office space and $0.6464 for class C office space by the same metrics.
“Thanks to Governor DeSantis’ strong fiscal policies, Florida continues to alleviate tax burdens for Floridians and keeps our economy resilient to federal pressures,” said Florida Commerce Secretary Alex Kelly, as reported by FloridaPolitics. “By slashing Florida’s Commercial Lease Sales Tax by more than half, we are easing the strain on Florida employers making it easier for them to grow their business, hire new employees and continue to thrive.”
TR
April 10, 2024 at 12:26 pm
So basically the people renting will not see a drop in their rent, but the landlord will be able to put more money in their pockets. Especially when there is a lease involved.