Key Changes at a Glance

  • Florida’s sales tax on commercial leases (the “Business Rent Tax”) has been eliminated
  • Effective December 1, 2024 — commercial rent payments on or after that date are not subject to the tax
  • Florida was one of the only states in the country imposing this tax
  • Review your lease and monthly invoices — the charge should no longer appear

What Was the Business Rent Tax?

Florida previously imposed a sales tax — known colloquially as the Business Rent Tax (BRT) — on payments for the privilege of leasing or occupying commercial real property, including office space, retail space, warehouses, and other commercial premises. At its peak the rate was 5.5%, though it had been reduced in recent years before elimination. Florida was one of the only states in the country to impose this tax, making it a long-standing competitive disadvantage for Florida businesses compared to businesses in neighboring states. Elimination of the tax was a priority for the Florida business community and legislature for years.

What This Means for Commercial Tenants

If you pay rent for commercial space in Florida, this tax should no longer appear on your invoice or rent statement for rent payments due on or after December 1, 2024. Over the course of a year, this can represent a meaningful reduction in occupancy costs — at the prior 2% rate still in effect before elimination, a business paying $10,000/month in rent was paying $2,400 per year in additional tax.
Check your invoices. Some landlords — particularly those managing large portfolios — may not have immediately updated their billing systems. If your monthly rent statement still shows a “sales tax,” “BRT,” or similar line item for commercial rent payments after December 2024, raise it with your landlord. They should remove it and issue a credit for any amounts collected in error after the elimination date.

What About Lease Agreements That Reference the Tax?

Many commercial leases include provisions requiring the tenant to pay “all applicable taxes” on rent, or specifically reference the Florida sales tax on commercial leases. Even if your lease contains such language, a tax that no longer exists cannot be lawfully collected. A lease provision obligating you to pay a legally eliminated tax is unenforceable as to that eliminated tax. If your landlord disputes this, point to the Florida legislative change and, if necessary, consult a Florida commercial real estate attorney.

Implications for Lease Negotiations

For businesses currently negotiating new commercial leases in Florida, the elimination of the BRT is a favorable market development. When modeling your total occupancy cost in a new lease, you no longer need to add a sales tax component to base rent. This makes Florida commercial space more cost-competitive and simplifies lease economics.
ⓘ This article provides general information about Florida’s elimination of the commercial lease sales tax. It is not legal advice or tax advice. Consult your accountant or a Florida-licensed attorney for guidance specific to your lease situation.