Florida Amends Sales Tax on Commercial Real Estate
Effective Jan. 1, 2018, the State of Florida will implement a revised sales tax rate for all commercial real estate rentals, leases and licensing. Property owners will see a decrease in sales tax from 6% to 5.8%. While the decreased rate will affect all commercial rentals going forward, it’s important to note that county and municipal sales tax rates are not subject to this change. Those tax rates are set by counties on an individual basis.
Currently, Florida is the only state to charge a sales tax on commercial real estate.
Who Does This Affect?
If you are owning, leasing or, occupying commercial space after Jan. 1, this change affects you. This includes:
- Commercial office
- Commercial multifamily
Existing tax rates on commercial property occupied prior to Jan. 1, 2018 will remain unchanged.
What a New Sales Tax Means for You
Essentially, a lower state sales tax is good for everybody. While county and municipal taxes are not affected by this change (in Hillsborough County, it’s an additional 1%), a lower sales tax means you’re paying less in taxes for your property if you’re a landlord and less on your monthly invoice.
Caution to tenants: it’s especially important to be aware of these changes affecting commercial sales tax. For all tenants occupying a commercial property after Jan. 1, you need to make sure your invoice is amended to reflect the reduced tax. Otherwise, a less-than-scrupulous landlord may just allow you to continue over-paying and simply pocket the excess.
If you want to find out more about how you’ll be affected by the new tax rate on commercial property, click here.
Contact us at 813.514.1070 for more information on Sales and Leasing Commercial Property in Greater Tampa Area