- April 15, 2024
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The Florida Legislature during its most recent session trimmed the tax businesses must pay annually on commercial real estate leases, a step that advocates hope could lead to the eventual elimination of the fee.
If approved as part of the final state budget to be signed by Gov. Rick Scott, the so-called business rent tax would decline from 6% to 5.8%, which would save tenants roughly $60 million annually, according to figures compiled by Florida Realtors, a statewide trade group.
More specifically, office tenants that occupy 30,000 square feet of space at a cost of $28 per square foot pay $50,400 in rent tax each year. With the reduction, which begins Jan. 1, those same tenants will pay $48,720.
“A lot of times, extra costs can be prohibitive, especially for family-owned companies,” says Matt Drews, director of commercial real estate at Sarasota-based Michael Saunders & Co. “For a small business owner, a lot of their money on a percentage basis goes toward their rent and associated costs, so if the state can reduce that then we think that's a great idea.”
Interestingly, while other states have commercial rent taxes, Florida is the only state where it is built into the state's tax code, Drews says.
