Companies that lease or rent commercial properties are required to collect and remit applicable sales tax to the Florida Department of Revenue. Lessees can incur hundreds of dollars in additional rental expenses each month due to this tax. With Florida being the only state that charges sales tax on commercial rent, House Bill 7063 aims to raise the capital of local businesses.
What Is The New Tax Cut?
Over the past 6 years, Florida businesses have seen a decrease in their commercial rent sales tax imposed at the state level. While many counties have increased surtax, the Florida State Government has lowered the sales tax rate from 6% to 5.5%. There will be another break for businesses when House Bill 7063 goes into effect on December 1st, 2023, lowering the sales tax rate on commercial rent to 4.5%.
How Will This Affect Small Businesses?
A reduced tax burden will encourage established Florida-based companies to expand their operations and create more job opportunities in the region. The savings will enable small businesses to allocate more funds to the rising cost of rent and insurance. Overall, the reinvestment of capital into companies will lead to strong economic growth in the State.
What to Keep in Mind?
Rent is one of the most costly expenses small businesses have and with rising rents around the State, many are looking for relief. Although this tax cut will bring some needed relief, there is little certainty on the movement of the surtax per county. The Florida Department of Revenue has established that counties have no limitations on the surtax rates they can charge on rental or lease charges for commercial properties.
| County | Surtax rate | Current Total | Total Dec. 1 |
| Citrus | 0.0% | 5.5% | 4.5% |
| Hernando | 0.50% | 6.0% | 5.0% |
| Hillsborough | 1.50% | 7.0% | 6.0% |
| Manatee | 1.00% | 6.5% | 5.5% |
| Orange | 0.50% | 6.0% | 5.0% |
| Osceola | 1.5% | 7.0% | 6.0% |
| Pasco | 1.00% | 6.5% | 5.5% |
| Pinellas | 1.00% | 6.5% | 5.5% |
| Polk | 1.00% | 6.5% | 5.5% |
