Big changes are coming to commercial real estate tax law in Florida. If you own or rent commercial real estate, make sure you’re aware of what the upcoming changes mean for you and your business.
What Is Changing?
Starting on October 1, 2025, Florida will no longer collect sales tax on commercial rentals.
Sales tax will no longer apply to leases for commercial office space, retail units, warehouses, or self-storage facilities. Sales tax will still apply to:
- Rentals or leases of living, sleeping, or housekeeping accommodations for six months or less (transient rentals)
- Parking or storage spaces for motor vehicles in parking lots or garages
- Docking or storage spaces for boats in boat dock
- Tie-down or storage space for aircraft at airports
The change impacts rent starting October 1, 2025. Sales tax still applies to rent covering periods through September 30, 2025, even if paid after October.
Who Does This Impact?
The change impacts both those who lease and rent commercial rental space.
What To Do If You Lease Commercial Property
If you lease commercial property, make sure you take steps to update your financial process to comply with new laws and regulations.
- Communicate with your renters. Renters may not be aware of the upcoming tax law change. Share information about the new law and how it impacts upcoming rental payments.
- Update lease agreements. Review your lease agreement and remove references to collecting sales tax. Explicitly note which property types remain taxable under other statutes.
- Update financial processes. Update your tax filing and bookkeeping systems to reflect the new rules. Adjust invoices to exclude sales tax.
- Continue filing through September 2025. Even if no tax is due, returns must still be filed.
- Monthly filers: July, August, September 2025
- Quarterly filers: July – September 2025
- Semiannual filers: July – December 2025
- Annual filers: January – December 2025
- Pay tax on payments for rental periods prior to October 2025. Rent for periods prior to October 1, 2025 remains taxable, regardless of when it’s paid. If you receive late payments for a rental period before October, you must still pay the tax. For example, if August rent is paid in October, tax still applies.
- Refund any tax payments prepaid for rental periods after October 2025. If you have already collected sales tax for rental periods October 2025 or later, you must refund your tenant and then request a refund from the Department of Revenue.
- Maintain your records. Retain rental and tax records for at least three years, as required under Florida law.
It’s imperative that you adjust your processes so you are not overcharging tenants. Failure to issue tenant refunds could expose landlords to disputes and compliance issues. A failure to adjust to new rules could also lead to late or incorrect filings or result in penalties and interest.
Related: 6 Bookkeeping Red Flags You Can’t Afford to Ignore
What To Do If You Rent Commercial Property
If you rent commercial property, it’s important to be aware of changes so you are not overcharged.
- Make sure you’re billed properly. Verify that you are no longer being charged tax on your rent starting October 1, 2025.
- Request a refund if you have already prepaid rent. If you have already paid tax for rental periods after October 1, request a refund from your landlord. Do not request a refund from the Department of Revenue.
- Update your accounting processes. Inform your accounts payable of the change and advise them to stop accounting for tax to be paid alongside rent.
It’s important to update your accounting processes now so you are ready. You do not want to overpay and need to be reimbursed by your landlord.
Related: Want to Avoid a Surprise Tax Bill? Do This Right Now.
Contact CFO2U For Help Navigating Tax Law Changes
Tax law changes often sound straightforward, but the fine print can trip up even the most diligent business owner.
If you lease or rent commercial property, CFO2U is here to help you navigate changing tax laws. Our team can:
- Update your bookkeeping systems and tax filing to reflect the new rules.
- Review your rental payments to ensure compliance.
- Assist with tenant refund documentation and Department of Revenue filings.
- Provide peace of mind that you won’t miss a filing or refund deadline.
The repeal of Florida’s commercial rental sales tax is good news for businesses, but only if you implement the changes correctly. Don’t wait until the last minute. Start reviewing your processes now.
Contact CFO2U today to schedule a discovery call and make sure your business is prepared for these changes. We’ll help you transition smoothly, avoid costly mistakes, and keep your focus where it belongs — on growing your business.
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