Florida has enacted a historic repeal of the sales tax on commercial leases, known as the Business Rent Tax (BRT), with the change taking effect October 1, 2025. This repeal was signed into law by Governor Ron DeSantis on June 30, 2025, through House Bill 7031, and eliminates both the statewide 2% sales tax and any the 1% local discretionary surtaxes in Sarasota and Manatee Counties.

Key details:

County Tax: The repeal covers both the state sales tax and all county-level discretionary surtaxes on commercial leases. No local government can continue to levy this tax on commercial rents after the effective date.

Scope: The repeal applies to leases of commercial office, retail, and industrial spaces. It does not apply to short-term residential rentals, vehicle parking, boat docking, or aircraft hangar rentals, which remain taxable under separate statutes.

Benefits for Property Owners:

• Lower Occupancy Costs: Removing the lease tax reduces the total cost of occupancyfor tenants. This can make commercial properties more attractive, potentially increasing demand and reducing vacancy rates.
• Improved Cash Flow and Valuation: With tenants no longer paying the tax, property owners may see higher net operating income and improved property valuations, as effective rental costs decrease.
• Competitive Advantage: Florida was the only state with a statewide tax on commercial leases. Eliminating this tax enhances the state’s appeal to businesses considering expansion or relocation, which could drive increased leasing activity and investment in Florida commercial real estate.
• Potential for Higher Rents or Occupancy: As the overall cost to tenants drops, property owners may have more flexibility in negotiating rents or attracting higher-quality tenants, improving the financial performance of their properties.

This repeal is expected to save Florida businesses $2.5 billion annually and marks a significant shift toward a more business-friendly tax environment in the state.

Summary Table:
Aspect                         Before Oct 1, 2025                                   After Oct 1, 2025

State Lease Tax         2% on commercial leases                      Eliminated

County Surtax         Varies by county                                      Eliminated

Applies To                Commercial office, retail, industrial     Same, but no tax

Not Affected           Short-term residential, parking,

                                 docking, hangars                                        Still taxed

Benefit to Owners.  Higher occupancy costs for tenants    Lower Costs

                                                                                                       Improved demand

Sources:
1. https://www.floridarealtors.org/news-media/news-articles/2025/06/florida-eliminates-burdensome-business-rent-tax
2. https://leanesuarezgroup.com/florida-eliminates-statewide-sales-tax-on-commercial-leases-starting-oct-1/
3. https://www.gtlaw.com/en/insights/2025/6/florida-legislature-repeals-sales-tax-on-commercial-leases
4. https://www.kbgrp.com/individual-and-business-tax-consulting/sales-tax-on-commercial-rents-eliminated-under-new-florida-law-update-for-landlords-and-tenants.html?pfstyle=wp
5. https://www.kbgrp.com/individual-and-business-tax-consulting/sales-tax-on-commercial-rents-eliminated-under-new-florida-law-update-for-landlords-and-tenants.html
6. https://www.gulfshorebusiness.com/florida-business-rent-tax-ends/
7. https://rsmus.com/insights/tax-alerts/2025/florida-budget-eliminates-business-rent-tax.html
8. https://warrenaverett.com/insights/florida-sales-tax-commercial-real-property/
9. https://natlawreview.com/article/florida-positioned-eliminate-business-rent-tax
10.https://edr.state.fl.us/Content/returnoninvestment/SalesTaxontheRentalofRealProperty.pdf
11. https://www.cbiz.com/insights/article/florida-to-eliminate-sales-tax-on-commercial-leases
12. https://www.withum.com/resources/florida-repeals-the-business-rent-tax/
13. https://www.cbsnews.com/miami/news/cut-in-florida-lease-tax-could-come-sooner-than-expected/
14. https://kaufmanrossin.com/blog/florida-bill-eliminates-sales-tax-on-commercial-rent-what-tenants-and-landlords-need-to-know/