On June 30, 2025, Governor DeSantis signed House Bill 7031, eliminating the state
sales tax on commercial real property leases. For over five decades, the rent charged
under commercial leases has been subject to state sales tax as high as 6%, with the
state legislature reducing that rate as low as 2% in recent years, and additional local
sales tax ranging from 2% to 3.5%.

Effective October 1, 2025, commercial real property leases, including retail storefronts,
office buildings, industrial warehouses, and manufacturing facilities will no longer be
subject to the state or local sales tax. Sales tax will continue to apply to self-storage
units, parking facilities, short-term residential rentals (e.g. vacation rentals), and boat
slips.

To ensure compliance with the commercial rent sales tax repeal, landlords should
review current lease agreements for provisions referencing sales tax obligations and
amend such clauses accordingly. Landlords should further update all future invoicing,
accounting systems and automated payment systems to ensure no sales tax is
collected for tenants’ occupancy after September 30, 2025.

Peterson & Myers, P.A. represents commercial landlords in Polk County and throughout Central Florida. Our team of legal professionals can help your business with answers and advice in light of this important change in Florida law. Please call us at (863) 683-6511.