Sales Tax Rate for Commercial Rentals to be Reduced December 1st
October 18, 2023
The Florida Department of Revenue recently announced that effective December 1, 2023 the state sales tax rate for commercial rentals will be reduced from 5.5% to 4.5% (plus county surtax). This edition of the newsletter aims to help you understand key points of this change to allow you to take full advantage of the reduced tax rate.
What types of rentals are included?
Section 212.031 of Florida Statutes dictates these recent changes, and includes “total rent charged for renting, leasing, letting, or granting a license to use real property (‘commercial rentals’)”. Some examples of “real property” covered under this statute includes:
Rental of Commercial Office Space
Rental of Commercial Retail Space
Warehouses
Self-Storage Units
Mini Warehouses
“Real property” covered under this statute does NOT include:
Parking or Storage of Motor Vehicles
Docking or Storage of Boats
Tie-Down of Storage of Aircrafts
Rental Payment Date
Sales tax is due at the rate in effect during the time the tenant occupies or is entitled to occupy the real property, regardless of when the rent is paid.
Rental charges paid on or after December 1, 2023 for rental periods prior to December 1, 2023 are subject to 5.5% state sales tax plus any applicable discretionary sales surtax.
Rental payments made prior to December 1, 2023 that entitle the tenant to occupy the real property on or after December 1, 2023 are subject to 4.5% state sales tax plus any applicable discretionary sales surtax.
Local County Sales Tax
It’s also important to note that that local County Discretionary Surtax is still applicable based on the location of the real property. The Florida Department of Revenue offered a helpful tool that allows you to look up the total sales tax rate based on the address of the real property here: https://pointmatch.floridarevenue.com/Default.aspx
Florida Department of Revenue Education Resources
The Florida Department of Revenue offers many other helpful tools and information, including online guides and tutorials at https://floridarevenue.com/taxes/Pages/education.aspx
As your trusted advisors, we are dedicated to supporting you in navigating these legislative changes with the aim of allowing your business to take full advantage of the reduced tax rates. Please contact our office if you would like to set up an appointment to discuss how this legislation may impact your unique situation.