Introduction

A major change has occurred, impacting commercial landlords and tenants in Florida. Effective October 1, 2025, Section 212.031 of the Florida Statutes, which imposed a state sales tax on commercial lease payments (which was often passed through to tenants of commercial leases as additional rent) has been fully repealed. Enacted through House Bill 7031, this repeal means that neither sales tax nor discretionary surtax will apply to rent or license fees for periods of occupancy beginning on October 1, 2025, according to Tax Information Publication No. 25A01-04 issued by the Florida Department of Revenue on July 24, 2025 (the “TIP”). 

It is important to note that this repeal is not a complete elimination of the commercial rent tax as there are a few taxable exceptions: (1) short-term rentals of less than six (6) months; (2) automobile parking spaces or storage spaces that are located in lots or parking garages; (3) boat docking or storage spaces that are located in docks; and/or (4) aircraft tie-downs or storage spaces at airports. 

Critical Dates/Rental Periods

What does this mean for commercial landlords whose rental properties do not fall into one of the categories listed above? It means that commercial lease payments received by landlords for rental periods through (and including) September 30, 2025 are taxable—even if such payments were received on or after October 1, 2025–however, lease payments received and applicable to periods beginning on or after October 1, 2025 are not taxable. What matters is what date the lease payment(s) applies to—not the date that such payment(s) was made or received.

Filing Requirements

According to the TIP, landlords whose tax accounts are used solely to report sales tax on commercial lease payments must continue to file returns for reporting periods through the month of September. The Florida Department of Revenue will make the necessary updates to the landlord’s tax account upon receipt of their returns. As mentioned above, the rental period controls, so if a landlord receives a late lease payment that applies to a rental period before October 1, 2025, the landlord will still be required to report that tax. Further, if a landlord has previously remitted sales tax for October 2025 or later, the landlord is required to refund the sales tax to the tenant before the landlord is permitted to request a refund from the State.

Conclusion

Effective October 1, 2025, sales tax will no longer be imposed on commercial lease payments in Florida. As a result of this change, commercial landlords, tenants and their respective accounting teams should begin evaluating their lease agreements to determine if and how the sales tax has been collected and would apply moving forward. Additionally, tax returns for October 1, 2025 through December 31, 2025 which have been prepared or filed should be reviewed and verified accordingly.