Elimination of Florida’s Business Rent Tax

What the Elimination of Florida’s Business Rent Tax Means for Tampa Bay Tenants and Landlords

Florida’s long-standing business rent tax has officially reached its end. Beginning October 1, 2025, commercial tenants will no longer be required to pay sales tax on rent for business properties. For Tampa Bay businesses, this change delivers meaningful relief, but it also raises new questions under commercial lease law regarding who benefits, how existing leases should be updated, and what landlords must do to remain compliant.

 

A Historic Shift in Florida Commercial Lease Law

For decades, Florida stood alone as the only state in the nation charging a statewide tax on commercial rent. The repeal — enacted under House Bill 7031, signed by Governor DeSantis on June 30, 2025 — eliminates both the state sales tax and county surtaxes on commercial leases governed by Section 212.031, Florida Statutes.

This change applies to occupancy periods beginning on or after October 1, 2025, meaning any rent attributable to earlier periods remains taxable. According to the Florida Department of Revenue, landlords must continue collecting and remitting sales tax for rent through September 30, 2025.

From an economic perspective, this repeal is projected to save Florida businesses over $1 billion annually, cutting overhead and freeing up cash for reinvestment, expansion, and hiring. But for attorneys and clients navigating commercial lease law, the real work is just beginning.

 

Who Benefits From the Business Rent Tax Elimination

For Tenants

Businesses leasing office, retail, or warehouse space will see direct savings once the repeal takes effect. A tenant paying $10,000 in monthly rent previously owed approximately $550 in state and county taxes combined. After October 1, 2025, that tax liability disappears for future occupancy months.

However, tenants should carefully review their lease language. Many commercial leases require tenants to pay “all taxes imposed on rent,” and while the tax is eliminated, landlords may not automatically adjust billing systems. Tenants should confirm that invoices after October 1 reflect the change and that any auto-drafted payments exclude the former tax rate.

For Landlords

Landlords also need to act under commercial lease law to ensure compliance. Billing, accounting, and reporting systems must be updated to remove the tax. If a lease spans both taxable and non-taxable periods, invoices must clearly separate the rent applicable before and after the repeal date.

Landlords that previously filed monthly returns reporting rent tax must still submit “zero-return” filings if they continue to hold an active account but no longer collect rent tax. The Florida Department of Revenue recommends maintaining accurate records of payments and effective dates to avoid audit issues.

 

Commercial Lease Law Implications: Allocating the Savings

The elimination of the business rent tax opens new legal discussions about who actually benefits – the landlord or the tenant.

Many leases allocate responsibility for taxes using broad clauses such as:

“Tenant shall pay all sales or use taxes imposed on rent.”

After the repeal, that clause might seem obsolete — but disputes could arise if the landlord’s base rent was negotiated inclusive of the tax burden. Tenants might argue that rent should now decrease by the amount previously taxed, while landlords might maintain that the listed rent remains fixed and the tax was always a separate obligation.

Why This Matters

Under Florida commercial lease law, courts typically look to the specific language of the contract. If the lease defines rent as a gross amount plus tax, the tenant no longer owes the tax portion after repeal. But if rent was negotiated on a “gross including tax” basis, disputes may surface over whether rent should drop by that same amount.

The safest route for both parties is clarity. New leases signed for occupancy beginning on or after October 1, 2025, should expressly reference the repeal and specify that no rent tax applies under Section 212.031 F.S. Existing leases should be amended to remove outdated tax clauses and confirm payment terms going forward.

 

Key Steps for Tampa Bay Businesses and Property Owners

1. Review All Active Commercial Leases

Audit each lease for tax allocation clauses, renewal terms, and automatic payment provisions. Businesses should verify whether their rent payments include taxes that should no longer apply.

2. Amend Lease Language

Landlords and tenants alike should work with counsel to update contracts, ensuring that billing reflects the new law. A well-drafted amendment can prevent misunderstandings and protect both parties.

3. Address Transitional Payments

Rent paid in advance for periods before October 1 remains taxable — even if payment occurs after that date. Likewise, late payments for pre-October rent must include the tax due. Accurate recordkeeping and clear communication can prevent compliance disputes.

4. Evaluate Business Budgets

The repeal creates a unique opportunity to reduce operating costs. Tenants can reallocate savings toward upgrades, staff, or expansion. Landlords can use the tax elimination to make their properties more attractive without cutting base rent.

 

Local Impact: What Tampa Bay Businesses Should Expect

The Tampa Bay commercial real estate market — from downtown office towers to retail centers in Clearwater and industrial parks in Pasco County — will likely experience competitive shifts. As overhead decreases, commercial lease law considerations will influence how landlords structure new deals and how tenants negotiate renewals.

Some landlords may pass savings directly to tenants to attract long-term leases. Others may maintain existing rent levels, arguing that market demand already supports current pricing. Either way, clarity in documentation and consistent application of Florida’s updated commercial lease laws are critical.

 

Practical Example

A Clearwater manufacturer leases a 20,000-square-foot warehouse for $25,000 per month. Previously, it paid 5.5% sales tax — about $1,375 monthly — in addition to rent. Beginning October 2025, the business will save over $16,000 per year, provided the landlord adjusts billing correctly.

Without proactive review, disputes could arise if invoices continue including tax, or if the lease remains silent on who retains the benefit of the repeal. Consulting a commercial lease law attorney ensures the transition is handled legally and fairly.

Review, Revise, and Realign

The repeal of Florida’s business rent tax is a win for economic growth — but it’s also a reminder of why commercial lease law expertise matters. Landlords and tenants should use this moment to modernize lease language, verify billing systems, and align financial expectations with the new law.

At Roussos Law Group, we help Tampa Bay business owners, landlords, and tenants navigate changing legislation with precision and foresight. Whether you need a lease audit, an amendment, or dispute resolution, our attorneys are ready to guide you through every step.