Did you know that Florida collects sales tax on commercial rent?

The state tax is applicable to commercial rentals and residential rentals if rented for 6 months or less.

This unusual tax on the owners of commercial real estate has been in effect in Florida since 1969. Currently, the tax is imposed at a rate of 6 percent in every county, with the exception of Miami-Dade County. Miami-Dade fixes the rate at 7 percent by reason of an “add-on” at the county option referred to as a surtax. Other counties in Florida may have a different surtax or no surtax.

Over the years there have been movements to repeal Florida’s sales tax on commercial rent, with little or no progress. However, the legislature announced earlier this year that there will be at least a slight reduction in the tax. Effective January 1, 2018, the rate drops from 6 percent to 5.8 percent, or a 3 1/3 percent reduction. In Miami-Dade County, the rate will fall from 7 percent to 6.8 percent.

These may not be huge reductions, but, it may be a signal that the legislature is finally moving toward removing this unpopular tax.

How MBAF Can Help

The real estate team at MBAF has the knowledge, skills, and planning ideas to save your company money and minimize sales taxes and property taxes. For companies that own properties and lease them, we can assist in planning to minimize sales taxes and also assist with the challenges of accurate real estate assessments, in order to reduce taxes and save you money and increase your bottom line.

At MBAF we are at the forefront of all Sales Tax and Property Tax changes and opportunities. If you would like to benefit from our expertise in these areas, or if you have further questions on this Advisory, do not hesitate to contact our Tax and Accounting specialists, or call us at 1-800-239-1474.