Starting June 1, 2024, the state of Florida will reduce the sales tax rate on rentals, leases, or licenses to use commercial real property from 4.5% to 2.0%.
This change, outlined in Florida Tax Information Publication No. 24A01-02 issued on April 8, 2024, will impact various commercial real estate transactions.
The reduced rate applies to the total rent charged for renting, leasing, or granting a license to use commercial properties such as offices, retail spaces, warehouses, and self-storage units. The tax rate is determined by the date the tenant occupies or is entitled to occupy the property, regardless of when the rent is paid.
Rental payments made on or after June 1, 2024, for rental periods from December 1, 2023, through May 31, 2024, will be subject to the current 4.5% state sales tax rate plus applicable local surtaxes. Conversely, rental payments made before June 1, 2024, that entitle the tenant to occupy the property on or after that date will be subject to the reduced 2.0% state sales tax rate plus local surtaxes.
The reduced state sales tax rate does not 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, docking or storage spaces for boats, or tie-down or storage spaces for aircraft.
Businesses involved in commercial real estate rentals should review their accounting and reporting processes to ensure compliance with the new tax rate. The Florida Department of Revenue has published guidelines on its website, accessible through the "Sales and Use Tax on the Rental, Lease, or License to Use Commercial Real Property" (GT-800016) form.
This change results from Chapter 2021-2, Laws of Florida, and an amendment to Section 212.031 of the Florida Statutes. The Department of Revenue encourages businesses to visit their website or contact Taxpayer Services for more information and guidance.
***
Are you interested in Real Estate Service in U.S.? Find out more at the following link.
***
Explore our services:
LEGAL & TAX ASSISTANCE IN THE U.S.
CORPORATE SERVICES IN THE U.S.
