Florida has officially repealed its statewide tax on commercial rent, a move that marks the end of a decades-old levy and is expected to provide significant financial relief to businesses across the state. The repeal, effective October 1, 2025, positions Florida as the last state in the nation to eliminate this specific tax.
A Historic Tax Repeal
Florida’s decision to eliminate the sales tax on commercial rentals is a landmark achievement, particularly for the commercial real estate sector. This tax had been in place since 1968 and, while gradually reduced over the years, its complete removal is seen as a major step forward for economic development.
- End of an Era: Florida was the only state to impose a statewide tax on business rent.
- Advocacy Success: The repeal was a long-sought victory for organizations like BOMA Florida, which argued the tax hindered job creation and economic growth.
- Tax Rate History: The tax rate was previously reduced from 6% to 2% in 2017.
Financial Impact on Businesses and State Budget
The elimination of the commercial rent tax is projected to save Florida businesses approximately $904.8 million in the upcoming fiscal year. This significant reduction in operating costs is anticipated to stimulate the economy and make Florida more competitive.
However, the repeal comes with a substantial cost to the state’s budget. State estimates indicate that the loss of revenue from this tax could exceed $1.5 billion annually by 2030. For the current fiscal year, the state’s general fund is expected to lose $679.1 million, with local governments potentially losing an additional $371.6 million.
Broader Tax Relief Measures
Beyond the commercial rent tax repeal, the legislation enacted on July 1, 2025, includes several other tax relief measures:
- Aviation Fuel Exemption: An exemption for aviation fuel has been created.
- Sales Tax Holidays: Permanent and seasonal sales tax holidays are established.
- Export Relief: Provisions for sales tax relief on exports are included.
- Data Center Exemption: The application deadline for the data center property exemption has been extended by 10 years.
Businesses are advised to ensure that tax collection on commercial rentals ceases after the October 1, 2025, effective date and to review how these new exemptions and holidays may apply to their operations.