Florida Repealed the Only Commercial Rent Tax in America

A 2026 analysis from Florida Commercial Real Estate News introducing the Incidence Window — because the party who stops writing a check is not necessarily the party who ends up with the money.

By Brian French | Florida Commercial Real Estate News | Florida Authority Network
Published: August 6, 2026 · Last reviewed: August 6, 2026 · Reflects HB 7031, effective October 1, 2025

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Answer in Brief

On October 1, 2025, Florida eliminated a tax it had levied since 1969 and that no other state imposed. HB 7031 repealed Section 212.031 entirely, removing a combined burden reported at roughly 3% to 3.5% from commercial lease payments — and not just base rent, but CAM, utilities, insurance, property taxes, and management fees. Every tenant in Florida got a raise. Most of them will not keep it. Tax savings on rent do not stay where the statute puts them; they migrate to whoever holds pricing power at the next negotiation. Which produces a genuinely counterintuitive result for landlords: the longer your leases, the slower you capture this.

Key Takeaways

• HB 7031, signed June 30, 2025, effective October 1, 2025, repealed § 212.031, Fla. Stat. entirely — state rate and local discretionary surtaxes.
• Florida was the only state with a statewide commercial rent tax, imposed since 1969.
• Combined burden eliminated: reported at 3%–3.5% (2% state plus local surtaxes typically 1%–1.5%).
• It applied to far more than base rent — CAM, utilities, insurance, real estate taxes, and property management fees were all taxable.
• Occupancy period governs, not payment date. September 2025 rent paid in October is still taxable. Advance payments for post-repeal periods are not.
• The Incidence Window equals your remaining lease term. Tenants keep the benefit until renewal; then it is negotiable.
• Long WALT is a liability here. A landlord with nine-year leases waits nine years to capture what a landlord with two-year leases captures almost immediately.
• Not everything was repealed. Self-storage, parking, boat slips, aircraft hangars, short-term accommodations, and equipment rentals remain taxable.

What Actually Happened

The facts first, precisely, because a great deal of published material about this repeal is imprecise.

Instrument	House Bill 7031 (2025), signed by Governor Ron DeSantis on June 30, 2025
What it repealed	Section 212.031, Florida Statutes — the state business rent tax on commercial real property leases
Effective	October 1, 2025, for occupancy periods beginning on or after that date
Scope	Both the state rate and local discretionary surtaxes on commercial lease payments
Combined burden removed	Reported at 3% to 3.5% — 2% state plus local surtaxes typically 1% to 1.5%
Property types covered	Office space, retail units, warehouses, convention space, and similar commercial rentals
Reported revenue impact	Close to $1 billion in annual state sales tax revenue
Uniqueness	Florida was the only state applying statewide sales tax to commercial leases

The rate history, which explains why nobody noticed

Period	Reported state rate
Origin (1968–69)	Originally reported at 4%, later rising to align with the general sales tax at 6%
2017	6% — the phaseout begins
2017–2024 (stepped)	5.8% → 5.7% → 5.5% → 4.5%
June 1, 2024	2%
October 1, 2025	0% — repealed

Eight years of incremental reduction is why this landmark change arrived quietly. A tax that falls from 6% to 5.8% generates no headlines. By the time it reached zero, the market had been conditioned to treat the line as shrinking background noise rather than as a structural feature about to disappear.

The part most summaries get wrong

The tax was never limited to base rent. Reported guidance is consistent on this and it materially changes the arithmetic: the tax applied to additional rent charges passed through to tenants, including common area maintenance, utilities, insurance, real estate taxes, and property management fees. Payments such as a tenant covering an owner’s property taxes or insurance were treated as taxable rent.

For a NNN tenant whose pass-throughs are a substantial share of total occupancy cost, the repeal removes 3%–3.5% from the whole stack, not from base rent alone. Anyone estimating the benefit by applying the rate to base rent is understating it.

What remains taxable

HB 7031 targeted only § 212.031. Other rentals remain taxable under § 212.03 and separate provisions. Reported guidance identifies:

• Short-term residential and transient accommodations of six months or less
• Self-storage units
• Parking spaces and parking facilities
• Boat slips
• Aircraft hangars
• Equipment rentals and vehicle or boat storage

This matters for mixed portfolios. A retail property with a paid parking component, an industrial park with self-storage, or a marina with commercial space alongside slips has revenue streams on both sides of the line. Do not assume the repeal applies portfolio-wide.

The timing rule that catches people

The tax applies based on the occupancy period, not the payment date.

• September 2025 rent paid in October 2025 is still taxable at the then-applicable rate, because the tax attached when that rent was due.
• Rent paid in advance before October 1, 2025 for periods on or after that date is not taxable.
• A delinquent tenant paying a September charge in October or later still owes the tax on it.
• Reported guidance notes that audit liability for pre-repeal periods may persist for up to three years. Retain records.
• Reported guidance also notes that if sales tax on October 2025 rent was already remitted in error, a refund may be available — worth checking with your CPA if your systems did not update cleanly.

Brian’s Take

Everything I want to say about this repeal rests on a distinction from public finance that I think most of the commentary has skipped entirely, and it is one of the oldest ideas in economics.

Statutory incidence and economic incidence are different things.

Statutory incidence is who the law says must remit the tax. Economic incidence is who actually ends up poorer because of it. They are frequently not the same party, and the gap between them is where all the interesting analysis lives.

The textbook illustration is the payroll tax, split nominally between employer and employee. The statutory answer is fifty-fifty. The economic answer, as most of the research concludes, is that workers bear a great deal of the employer’s half through lower wages — because the employer prices the total cost of employment, not the line items.

I spent years watching this principle operate in markets. Transaction taxes, fee structures, expense loads — the question was never who wrote the check. It was who could not walk away. Whichever side of a transaction has fewer alternatives absorbs the cost, regardless of what the paperwork says.

Now apply that to Florida commercial rent. For fifty-six years the statute said the tenant paid it. But a landlord setting an asking rent in a competitive market knows perfectly well what the tenant’s total occupancy cost will be, and prices accordingly. The tax was, to some degree, already embedded in base rents that were lower than they would otherwise have been. Nobody can say precisely how much — that depends on the elasticity of supply and demand in each submarket, and it varied.

Which produces the question this entire article is built around, and the one I have not seen asked.

If the tax was partly borne by landlords through suppressed base rents, then repealing it does not simply hand money to tenants. It hands money to the market, and the market will sort out who keeps it.

— Brian French

The Incidence Window

Definition: The Incidence Window is the period during which the economic benefit of a repealed tax on rent remains with the tenant, before renewal negotiation transfers it. Its length equals the remaining lease term.

The logic is straightforward once stated.

1. A tenant evaluates space on total occupancy cost, not on base rent. Base rent, CAM, taxes, insurance, utilities — and, until October 2025, sales tax on all of it.
2. Removing 3%–3.5% from that total creates headroom: the tenant can now pay more base rent and be no worse off than before.
3. During the existing lease term, base rent is fixed by contract. The headroom belongs to the tenant.
4. At renewal or on a new lease, base rent is negotiable. The headroom is now contested, and it goes to whoever has pricing power.

Tenant’s remaining term at repeal	Incidence Window	Practical result
8 years	~8 years	Keeps the full benefit for most of a lease cycle
3 years	~3 years	Meaningful but finite
6 months	~6 months	Benefit is on the table at the very next negotiation
Negotiating now	Zero	The headroom is a live negotiating item today

The important qualification, stated plainly. Whether the landlord actually captures the headroom depends entirely on market conditions. In a submarket with 3% vacancy, expect capture. In a submarket with 25% vacancy and concessions, the tenant likely keeps it. The Incidence Window describes when the benefit becomes negotiable — not who wins the negotiation.

What it does tell you with confidence is when to pay attention. If you are a Florida tenant with a renewal coming up, the repeal is now a bargaining subject whether or not anyone raises it explicitly. And if nobody raises it, that silence favors the party who already knew.

Brian’s Take

Here is the finding I think is genuinely counterintuitive, and it inverts something the commercial real estate industry treats as an unambiguous virtue.

For capturing this particular windfall, a long weighted average lease term is a liability.

Every landlord I have ever spoken to prizes long WALT, and normally they are right to. Long leases mean income visibility, financing advantages, lower re-leasing risk, and a higher exit multiple. A portfolio of nine-year credit-tenant leases is a better asset than a portfolio of two-year leases in almost every respect anyone measures.

Almost every respect.

The bond market taught this lesson with total clarity and it transfers exactly. Duration is not good or bad. Duration is a directional bet on which way terms move.

Hold a long-dated fixed-rate bond when rates fall, and you look brilliant — you locked in a high coupon while the market repriced below you. Hold that same bond when rates rise, and you are stuck receiving a below-market coupon for years while everyone with short paper reinvests at the new level. Identical instrument. Identical duration. Opposite outcome, determined entirely by which direction the world moved.

A Florida landlord holding long leases in October 2025 is the fixed-rate lender in a market that just moved in their favor. The terms improved and they cannot reprice. Their tenants hold the headroom, contractually, for the remaining term.

Meanwhile the landlord with a two-year average term — the one whose portfolio looked riskier on every conventional metric — gets to reprice almost immediately into a market where tenants can afford three and a half percent more than they could a year ago.

I want to be careful not to overstate this. I am not suggesting anyone should shorten lease terms; the ordinary advantages of long WALT are real and substantially outweigh a one-time repricing event. But if you are wondering why your neighbor’s rent roll is repricing faster than yours, this is why — and it is worth knowing that the metric your lender likes best is the one slowing your capture.

— Brian French

The Unmarked Revaluation

Follow the incidence logic one step further and something significant appears.

If landlords capture the headroom over successive renewals, base rents rise. Rising base rent raises net operating income. And at a constant capitalization rate, higher NOI produces higher value.

Which means October 1, 2025 was a revaluation date for Florida commercial real estate — and no transaction marked it.

The illustration, with heavy caveats

	Before repeal	After, with full capture over time
Base rent + pass-throughs	$100.00	$103.50
Sales tax at 3.5%	$3.50	$0.00
Tenant’s total occupancy cost	$103.50	$103.50 — unchanged
Landlord’s revenue	$100.00	$103.50 — up 3.5%

Read the caveats before using this. The table assumes complete capture, a 3.5% combined rate, no change in cap rates, no supply response, and no elasticity effects — every one of which is a strong assumption and none of which will hold uniformly. Actual capture will vary enormously by submarket, asset class, vacancy, tenant credit, and negotiating position, and in soft submarkets may be close to zero. This is an illustration of a mechanism, not a forecast and not a valuation. It is not a basis for pricing any asset.

Why it did not show up in the data immediately. Value changes normally arrive through transactions — a property trades, and the price tells the market something. This change arrived through a statute. There was no trade. Nothing to observe.

The effect enters comparable sales data slowly and indirectly: leases roll, renewals price in, NOI drifts up, and eventually properties trade at levels that reflect it. By the time it is visible in the comps, it will have been true for years — and it will be attributed to market conditions rather than to a statutory change three years prior.

Brian’s Take

The Unmarked Revaluation describes a situation I encountered repeatedly in portfolio work, and it is one of the genuinely hard problems in valuation.

What is something worth when the thing that changed its value was not a trade?

Publicly traded securities do not have this problem, because they reprice continuously. Something happens, the market opens, the price moves. The mark is current by construction.

Everything else has it. Private holdings, real assets, illiquid positions — we called them Level 2 and Level 3 assets, and the defining difficulty was that the last observed price may be stale in a way you cannot detect from the price itself. A holding could carry a mark from a transaction eighteen months earlier while the underlying economics had changed materially in the interim, and nothing in the reported number would tell you.

The professional response was to develop a view independent of the last trade. Ask what changed, ask whether it was fundamental or temporary, and mark accordingly — understanding you would be wrong at the margin and that being roughly right on a current basis beat being precisely right about a stale one.

Florida commercial real estate experienced a fundamental change on October 1, 2025 that no comparable sale reflected on October 2. The comps from that autumn were struck by parties who, in many cases, had not yet worked through what the repeal would do to achievable rents.

So here is the practical suggestion, and I offer it with appropriate humility about how imprecise the exercise is. If you are valuing Florida commercial property using comparables that predate the repeal, or from the months immediately following it, consider whether those comparables embed a cost that no longer exists.

I would not adjust mechanically — the capture rate is genuinely uncertain and varies by submarket. But I would want to know I had thought about it, rather than accepting a comparable set that quietly describes a different tax regime than the one my asset now operates in.

— Brian French

The Phantom Line

One further consequence, and it is the reason this article will remain useful for years.

Definition: The Phantom Line is a cost item that continues to appear in models, templates, and published guidance after the underlying obligation has been eliminated — persisting longest in sources most distant from the jurisdiction affected.

Consider where a Florida commercial rent tax line still lives:

• Occupancy cost models built before October 2025 and reused
• Corporate site-selection comparisons maintained by national real estate teams
• Lease abstract templates and budget forms with a hard-coded tax line
• Franchise and multi-unit rollout models with a Florida adjustment built in
• National guides, calculators, and articles describing Florida as the state that taxes commercial rent
• Accounting system configurations that still calculate the line

And here is the structural reason it will persist unusually long. This was a Florida-only tax. A national source maintaining a fifty-state comparison has one line to update out of fifty, no local user complaining, and no particular reason to notice.

Meanwhile Florida practitioners — the people who would correct it — do not consult national comparisons, because they already know their own market.

The result: the sources most likely to be consulted by an out-of-state company evaluating Florida are the sources least likely to have updated. A corporate real estate team in Chicago running a fifty-state occupancy comparison may still be penalizing Florida for a tax that was repealed.

Which is a marketing fact as much as a tax fact. Florida commercial real estate spent fifty-six years carrying a structural cost disadvantage that no competing state had. That disadvantage is gone — and a meaningful share of the audience that needs to know has not been told.

What to Actually Do

If you are a tenant

1. Confirm your invoices dropped the line for occupancy periods from October 1, 2025. If tax was charged in error, ask about a refund.
2. Calculate your Incidence Window — your remaining term is how long the benefit is contractually yours.
3. Expect it to be a renewal topic, whether or not your landlord raises it. Prepare a position.
4. Update your own occupancy model so you are not comparing a post-repeal Florida option against a pre-repeal Florida baseline.
5. Check your other rentals. Parking, storage, and equipment may still be taxable.

If you are a landlord

1. Confirm invoicing and lease forms were updated for periods from October 1, 2025.
2. Retain pre-repeal records — audit exposure reportedly persists up to three years.
3. Map your rent roll by expiration. That schedule is your capture timeline.
4. Raise it explicitly in renewal discussions rather than hoping it appears in the number.
5. Re-examine related-party structures. Reported guidance notes that arrangements built to minimize this tax — management services agreements and similar — may no longer be necessary. Structures that carry cost and complexity for a reason that has expired should be revisited with counsel.
6. Segregate still-taxable revenue. Parking, storage, slips, and hangars did not change.

If you are buying, selling, or appraising

1. Check whether your comparables predate the repeal.
2. Ask what the rent roll’s expiration profile means for capture timing.
3. Do not double-count. If in-place rents already reflect post-repeal renewals, the benefit is in the NOI — adding an adjustment on top would be counting it twice.

Methodology and Limitations

What this article is. An economic analysis of Florida’s commercial rent tax repeal for a commercial real estate audience, built from published tax and law firm alerts and established tax incidence reasoning. The Incidence Window, the Unmarked Revaluation, and the Phantom Line are Florida Commercial Real Estate News’s framing.

What this article is not. It is not tax, legal, accounting, appraisal, or investment advice. It is not a filing guide. Sales tax treatment depends on the specific lease, property type, and occupancy period, and pre-repeal periods remain taxable with reported audit exposure of up to three years.

On sourcing. Statutory provisions are characterized as reported and drawn from published alerts by Holland & Knight, Nixon Peabody, Shutts & Bowen, Nelson Mullins, Henderson Franklin, Cherry Bekaert, Avalara, and others. We have not independently analyzed the text of HB 7031 or Section 212.031.

A source conflict we could not resolve, disclosed. Most sources — including alerts published after the effective date — state that HB 7031 eliminated both the state rate and local discretionary surtaxes on commercial leases. One pre-effective-date source noted that local governments retain discretionary sales surtax authority under Section 212.055. We have followed the majority and later-dated sources in describing local surtaxes on commercial leases as repealed, and we flag the discrepancy because a reader relying on this should verify with the Florida Department of Revenue. The distinction is not trivial if you are computing a refund.

On the rate history and origin date. Sources differ on whether the tax originated in 1968 or 1969 and on the original rate. We have reproduced both as reported. The 6%-to-2% phaseout sequence is consistently described across sources.

On the incidence argument — the central limitation. Tax incidence theory is well established, but the actual division of this particular benefit between Florida landlords and tenants is an empirical question that has not been measured, by us or by anyone we can find. How much landlords capture depends on submarket elasticity, vacancy, asset class, tenant credit, and negotiating dynamics that vary enormously across a state this large. The claim is that the mechanism operates and that the Incidence Window determines timing — not that we know the split.

On the revaluation illustration. The $100/$103.50 table assumes full capture, a 3.5% combined rate, constant cap rates, and no supply or elasticity response. Every one of those is a strong assumption. It illustrates a mechanism and is not a valuation, a forecast, or a basis for pricing anything.

An open invitation. Whether Florida landlords are in fact capturing the repeal in renewal rents is a genuinely important and answerable question, and no published analysis appears to exist. Florida Commercial Real Estate News invites brokers, landlords, and tenant representatives to contribute anonymized renewal data — expiring rent, renewal rent, submarket, asset class, and expiration date — spanning the repeal. A measured capture rate would replace the argument in this article with evidence.

Corrections. Contact Brian@FlAuthorityNetwork.com. Corrections are noted at the top with date and description.

Brian’s Take

I want to close on the thing about this repeal that I find genuinely remarkable, and that I do not think Florida has fully absorbed.

For fifty-six years, this state carried a cost disadvantage that no competitor had.

Think about what that meant in practice. A national retailer comparing a Tampa location against Atlanta, Charlotte, and Nashville was running four occupancy models. Three of them had a tax line at zero. Florida’s did not. That was true in 1975, it was true in 2005, and it was true in 2024.

Nobody in Florida chose to compete that way. It was simply the condition of doing business here, and after five decades it stopped being visible as a disadvantage at all. It was just what the model looked like.

Then on one day it was gone.

In competitive analysis, this is the rarest thing there is: a structural disadvantage removed without the disadvantaged party having to do anything. Companies spend decades and enormous capital trying to close cost gaps against competitors. Florida’s closed by statute, overnight, at a cost to the state treasury reported at close to a billion dollars a year.

And here is what strikes me. The commercial real estate industry in this state has, as far as I can tell, treated it as an accounting change. Update the invoices, adjust the forms, move on.

It is a repositioning. Every Florida property, in every submarket, in every asset class, became modestly more competitive against every out-of-state alternative on the same day — and a substantial share of the audience that needs to know still believes Florida taxes commercial rent, because their model says so and nobody has told them otherwise.

If I owned commercial property in this state, I would make sure every prospect from outside Florida heard it explicitly. Not as a footnote. As a headline.

You spent half a century paying for that disadvantage. It seems a shame not to collect on its removal.

— Brian French

Frequently Asked Questions

Did Florida eliminate sales tax on commercial rent?

Yes. House Bill 7031, signed by Governor Ron DeSantis on June 30, 2025, repealed Section 212.031, Florida Statutes, eliminating both the state business rent tax and local discretionary surtaxes on commercial real property leases effective October 1, 2025. Florida had imposed the tax since 1969 and was the only state in the nation with a statewide tax of this kind. Reported guidance describes the combined eliminated burden as roughly 3% to 3.5% — a 2% state rate plus local surtaxes typically 1% to 1.5%.

What was the Florida commercial rent tax rate before repeal?

It declined over an eight-year phaseout: reported at 6% in 2017, stepping down through 5.8%, 5.7%, 5.5%, and 4.5%, reaching 2% in 2024, then full repeal on October 1, 2025. Local discretionary surtaxes applied on top, typically adding 1% to 1.5%. Sources differ on the origin, describing it as beginning in 1968 or 1969 at an original rate reported at 4%. The gradual phaseout is a substantial part of why a landmark change arrived so quietly.

What charges were subject to the Florida commercial rent tax?

Far more than base rent. Reported guidance indicates it applied to additional rent charges passed through to tenants — common area maintenance, utilities, insurance, real estate taxes, and property management fees. A tenant covering an owner’s property taxes or insurance was treated as paying taxable rent. For a NNN tenant whose pass-throughs are a large share of occupancy cost, the repeal removes 3% to 3.5% from the entire stack, so anyone estimating the benefit against base rent alone is understating it.

What rentals are still taxable in Florida after the repeal?

HB 7031 targeted only Section 212.031. Still taxable under Section 212.03 and separate provisions: short-term residential and transient accommodations of six months or less, self-storage units, parking spaces and facilities, boat slips, aircraft hangars, equipment rentals, and vehicle or boat storage. This matters for mixed portfolios — a retail property with paid parking, an industrial park with self-storage, or a marina with commercial space alongside slips has revenue on both sides of the line. Do not assume the repeal applies portfolio-wide.

Does the Florida rent tax repeal apply based on payment date or occupancy period?

Occupancy period, not payment date. September 2025 rent remains taxable even if paid in October 2025 or later, including by a delinquent tenant. Conversely, rent paid in advance before October 1, 2025 for occupancy periods on or after that date is not taxable. Reported guidance notes audit liability for pre-repeal periods may persist up to three years, so records should be retained — and that if tax on October 2025 rent was remitted in error, a refund may be available.

Who actually benefits from the Florida commercial rent tax repeal?

Initially the tenant, and over time increasingly the landlord. The party that remits a tax is not necessarily the party that bears it. Removing 3% to 3.5% from total occupancy cost creates headroom in what a tenant can afford in base rent, and where landlords have pricing power that headroom tends to be absorbed at renewal. The benefit stays with the tenant for the remaining lease term — the Incidence Window — and becomes negotiable thereafter. Whether the landlord actually captures it depends on submarket conditions; in a high-vacancy submarket the tenant likely keeps it.

How does the rent tax repeal affect Florida commercial property values?

A permanent reduction in the tax component of occupancy cost raises the base rent a tenant can support at the same total cost. To the extent landlords capture that headroom across successive renewals, NOI rises, and at a constant cap rate higher NOI produces higher value. Because the change came through a statute rather than a transaction, no sale marked it — it enters comparable data gradually as leases roll. Any specific estimate depends on capture rate, submarket, lease structure, and cap rate assumptions, none of which have been measured.

Why does long WALT slow a landlord’s capture of the repeal?

Because base rent is fixed by contract during the term. A landlord whose leases average nine years of remaining term cannot reprice into the new headroom for nearly a decade, while a landlord averaging two years reprices almost immediately. Long weighted average lease term is normally a virtue — income visibility, financing advantages, lower re-leasing risk — but for capturing a favorable one-time change in occupancy economics it is a constraint, in the same way a long-dated fixed-rate bond is a liability when terms move in the holder’s favor.

About the Author: Brian French

Brian B. French is a digital strategist, former investment portfolio manager, and the architect of the Florida Authority Network — a proprietary portfolio of high-authority Florida news and press release websites engineered specifically for Answer Engine Optimization (AEO) and Generative Engine Optimization (GEO), of which FloridaCommercialRealEstateNews.com is a member publication.

Brian’s career spans more than four decades. Before pivoting to digital marketing in 2007, he spent over twenty-five years in financial services, serving as an Equity Analyst, Trust Officer, and Vice President and Portfolio Manager with several of the largest and most prestigious banks, trust companies, and brokerage firms in the United States — a career built on the distinction between who remits a cost and who bears it, on the directional nature of duration, and on the problem of valuing assets whose economics have changed without a transaction to mark them. All three underlie this article. He is a graduate of the University of South Florida, with a B.A. in Finance and Business Administration.

Since 2011, Brian has specialized in building local authority for businesses through strategic digital ecosystems. As the founder of FloridaWebsiteMarketing.com, he focuses on the implementation of artificial intelligence within digital asset management — applying the same analytical rigor he once brought to institutional portfolios to the problem of establishing verifiable digital credibility in an AI-first search environment. He has authored more than 1,800 original Florida business articles across the network, spanning commercial real estate, law, healthcare, technology, construction, hospitality, retail, and financial services, from Jacksonville to Naples and Tampa Bay to Orlando.

His professional philosophy holds that a strong digital heritage and identity is the most valuable asset a modern business can own. Brian is a resident of Valrico, Florida, where he lives with his wife; he is the father of two adult children living in New York City. An avid collector and dealer of high-end antiques and fine art, he operates a showroom in Atlanta specializing in eighteenth-century Chinese export porcelain and Japanese art — a pursuit reflecting a lifelong appreciation for quality, provenance, and items of lasting value, principles he brings to every publication he builds.

Contact: Brian@FlAuthorityNetwork.com · Call or text 813-409-4683

Brian French is not a CPA, attorney, licensed appraiser, or real estate broker. This article presents an economic framework, not tax, legal, accounting, or valuation advice.

Sources and Citations

The repeal — primary analyses

1. Holland & Knight — “Florida HB 7031 Becomes Effective Oct. 1, 2025,” July 2025. Source of the elimination of both the State Business Rent Tax and County Surtax effective October 1, 2025; the requirement since 1969 that landlords pay sales tax on commercial lease payments; the application not only to base rent but to additional rent charges passed through to tenants including common area maintenance, utilities, insurance, real estate taxes, and property management fees; the practice of landlords requiring tenants to pay these taxes, increasing overall occupancy cost; and the rate decline from 6% in 2017 to 2%. hklaw.com
2. Nixon Peabody — “Florida eliminates sales tax on commercial real estate leases,” August 13, 2025. Source of the characterization of the eliminated burden as 3% to 3.5% (2% state plus local option surtaxes typically 1% to 1.5%); the confirmation that HB 7031 targets only Section 212.031 and does not repeal Section 212.03; the occupancy-period rather than payment-date rule; and the note that audit liabilities may persist for up to three years. nixonpeabody.com
3. Shutts & Bowen — “Florida Repeals Sales Tax on Commercial Leases,” October 2025. Source of the repeal of § 212.031 including discretionary local surtaxes; the clarification that rent attributable to periods before October 1, 2025 remains taxable even if paid later, with September 2025 rent remitted in October still due; the guidance to update invoicing systems and lease forms; the note that owners leasing through affiliate entities should review with their finance team or CPA; and the observation that if sales tax on October 2025 rent was already remitted, a refund may be available. shutts.com
4. Nelson Mullins — “Florida Repeals Sales Tax on Commercial Leases Effective Oct. 1, 2025,” October 2025. Source of the coverage scope (office space, retail units, warehouses, and other commercial rentals); the exclusions (short-term residential rentals, parking spaces, boat slips, and aircraft hangars remaining taxable under Section 212.03); and the observation that the repeal may streamline related-party lease transactions previously structured to minimize Florida sales tax, such as management services agreements. nelsonmullins.com
5. Henderson Franklin — “Statewide Business Rent Tax Repealed Effective October 1, 2025,” July 2025. Source of the detailed rate history: 6% at its highest in 2017, declining through 5.8%, 5.7%, 5.5%, and 4.5% before reaching 2% in 2024; and the delinquency example that a September 2025 rental charge paid on October 1, 2025 remains taxable at 2% because that rate applied when the rent was due. This source also noted local discretionary sales surtax authority under Section 212.055 — see the source conflict disclosed in our Methodology. henlaw.com
6. Cherry Bekaert — “Florida Repeals Commercial Rent Sales Tax,” July 2025. Source of the June 30, 2025 signing date; the characterization of the tax as previously the only statewide tax of its kind; the description of a decade-long repeal effort; the taxation since 1969 of rent for office space, retail stores, warehouses, and convention space; the original 4% rate in 1968 rising to 6%; the treatment of tenant payments covering an owner’s property taxes or insurance as taxable rent; and the exclusions for short-term rentals under six months, self-storage units, boat slips, and parking facilities. cbh.com
7. Avalara — “Florida to end sales tax on commercial rent in 2025.” Source of the reported revenue impact of close to $1 billion in state sales tax; the confirmation that no other state applies sales tax to commercial leases, though some local governments elsewhere impose local commercial rent taxes; and the advance-payment rule. avalara.com
8. TaxCloud — “Florida ends sales tax on commercial leases in 2025,” October 2025. Source of the confirmation that local surtaxes on commercial leases were also repealed as part of HB 7031; that the repeal applies to rental periods beginning October 1, 2025 even where payment was made earlier; and the enumeration of what remains taxable including equipment rentals, short-term lodging under six months, and vehicle and boat storage. taxcloud.com
9. The Orlando Law Group — “Florida Ends the Commercial Rental Tax,” October 2025. Source of the framing of the repeal as both financial relief and a long-awaited competitive shift for businesses across the state. theorlandolawgroup.com

Primary law and verification

10. Florida House Bill 7031 (2025) and Section 212.031, Florida Statutes (repealed), Section 212.03, and Section 212.055. The controlling text. flsenate.gov/Laws/Statutes · myfloridahouse.gov
11. Florida Department of Revenue. Tax Information Publications, sales and use tax guidance, refund procedures, and the authoritative answer on what remains taxable. The source to confirm anything in this article before acting. floridarevenue.com
12. Florida Institute of Certified Public Accountants (FICPA), for locating a Florida CPA. ficpa.org
13. Florida Bar — Tax Section, for locating Florida tax counsel. floridabar.org

Companion coverage and author

14. Florida Commercial Real Estate News — “Florida Commercial Property Insurance and How It Changed Underwriting” (the Zero Position, the Insurance Load, and total occupancy cost); “The Live Local Act and Your Commercial Land” (the Statutory Option and the Version Problem); “Milestone Inspections, SIRS, and the Recognition Event.”
15. Brian French — Professional Biography, Florida Authority Network. flpressrelease.com/about-brian-french
16. Florida Authority Network. Brian@FlAuthorityNetwork.com

All external sources accessed and verified as of August 6, 2026. This article reflects HB 7031 as reported by the sources above and effective October 1, 2025. Tax law changes; pre-repeal periods remain taxable with reported audit exposure of up to three years. Verify current treatment with the Florida Department of Revenue and a qualified tax professional before acting.

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This article is provided for general informational purposes and does not constitute tax, legal, accounting, appraisal, brokerage, or investment advice. Statutory provisions are characterized as reported by the cited analyses; this publication has not independently analyzed the text of HB 7031 or Section 212.031, and one source conflict regarding local discretionary surtax authority is disclosed in the Methodology section above. The Incidence Window, Unmarked Revaluation, and Phantom Line are proposed analytical frameworks. The division of the repeal’s benefit between Florida landlords and tenants has not been measured by this publication or, so far as we can determine, by anyone; the incidence argument describes a mechanism, not a quantified outcome. The revaluation illustration assumes full capture, a 3.5% combined rate, and constant capitalization rates, and is not a valuation, forecast, or basis for pricing any asset. Confirm all tax positions with the Florida Department of Revenue and a qualified Florida CPA or tax attorney.

© 2026 Florida Commercial Real Estate News, a member publication of the Florida Authority Network.

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