Florida Repeals Sales Tax on Commercial Rentals: What Business Owners Need to Know

Florida will repeal sales tax on commercial rentals starting Oct. 1, 2025. Learn what it means for landlords, tenants, and your business planning.

Florida Repeals Sales Tax on Commercial Rentals: What Business Owners Need to Know

Effective October 1, 2025, Florida will officially repeal the state sales tax on commercial rentals. This change could be a welcome relief for many businesses leasing office space, retail storefronts, warehouses, or self-storage units. But the details matter—especially if you’re a landlord or tenant navigating leases that straddle the changeover date.

At Campbell & Company, we want to ensure our clients understand both the opportunities and responsibilities that come with this repeal. Here’s a breakdown of what you need to know.

What’s Changing?

Under Section 212.031, Florida Statutes, commercial rent was previously subject to state sales tax (plus any applicable discretionary surtax). As of October 1, 2025, this tax is repealed. That means:

  • No state sales tax will apply to commercial rent or license fees for rental periods beginning on or after October 1, 2025.

  • Affected spaces include offices, retail locations, warehouses, and self-storage units

What’s Not Changing?

Certain transactions remain taxable even after the repeal. These include:

  • Rental periods through September 30, 2025. For example, if a tenant pays August 2025 rent late (in October), tax still applies.

  • Transient rentals (living/sleeping accommodations for six months or less).

  • Parking, docking, or storage spaces for vehicles, boats, or aircraft

Key Considerations for Landlords

If you’re a lessor of commercial real property, here’s what you should know:

  • You must continue filing sales tax returns for reporting periods through September 2025, even if no tax is due.

  • Filing frequency matters. For example:

    • Monthly filers: July, August, and September 2025.

    • Quarterly filers: July–September 2025.

    • Semiannual filers: July–December 2025.

    • Annual filers: January–December 2025

  • After your final filings, the Florida Department of Revenue will automatically update your account status.

Refunds and Overpayments

What if you or your tenant already paid sales tax for rental periods after October 1, 2025?

  • Landlords must refund the tax to tenants first, then file for a refund with the Department using Form DR-26S.

  • Refund claims can be submitted online at floridarevenue.com/taxes/refunds

Questions We’re Hearing from Clients

1. My tenant prepaid October rent in September 2025. Is it taxable?
No. Prepayments for rental periods starting on or after October 1, 2025, are not taxable.

2. What about discretionary surtax?
That too will no longer apply after October 1, 2025.

3. Do I need to close my tax account?
No. The state will update your account after your final returns are processed.

4. I rent salon chairs or retail floor space to independent operators. Do I stop collecting sales tax?
Yes—for occupancy periods beginning October 1, 2025, and beyond

Why This Matters for Your Business Planning

The repeal of Florida’s commercial rental tax removes a significant cost burden for many businesses. That savings could free up capital for growth, reinvestment, or strengthening your financial plan. However, the transition requires careful recordkeeping to avoid compliance issues in 2025.

How Campbell & Company Can Help

This change underscores the importance of proactive planning. Our advisors can help you:

  • Understand how the repeal impacts your lease agreements and cash flow.

  • Prepare for tax filings through September 2025.

  • Identify ways to redirect savings from reduced tax costs into your long-term retirement and business planning strategy.