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Florida Gulfcoast Commercial Association of Realtors' leaders say they are pleased that state lawmakers trimmed the 6% tax on commercial leases, but that the measure that passed in the most recent legislative session doesn't go far enough.
The Florida Legislature shaved the tax by 3.3% when it passed House Bill 7109, reducing the amount paid to 5.8% of total monthly lease payments.
In other words, businesses that pay $10,000 monthly in lease payments will pay $580 per month in tax going forward -- a mere $20 savings.
FGCAR, which comprises more than 400 commercial real estate brokers, agents and others, contends the tax should be eliminated altogether.
“It's a great start, but the idea is we want it to be easier for businesses to operate, and this tax prevents that,” says Brian Andrus, FGCAR's 2017 president and the owner and broker of Stonebridge Real Estate Co., in Clearwater.
He adds that Florida is the only state in the nation that taxes commercial leases. The tax also applies to tenants who contribute or pay maintenance, ad valorem taxes, insurance, utilities and other property-related expenses.
Andrus and FGCAR say the lease tax hurts economic development, and puts Florida at a disadvantage for business relocations. The tax has been on the books in Florida since 1969, and the state's municipalities oppose its repeal because they count on the revenue.
“We're hoping that this negligible reduction will create some momentum for the eventual elimination,” Andrus says.
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