Florida's business rent tax drops 1% on December 1st

Florida's business rental tax, now 5.5%, drops to 4.5% on Friday. Florida realtors advocate the complete abolition of the tax and see this step as a significant victory.

The sales tax rate imposed on Florida businesses that rent or lease commercial property – known as the Business Rent Tax (BRT) – will drop by a full percentage point on Friday, December 1, from the current 5.5% to 4.5%.

"Reducing the business rent tax continues to be a high priority for Florida Realtors®, and our efforts over the past six years have helped countless businesses expand and become more successful," says Florida Realtors President G. Mike McGraw, broker associate with LPT Realty in Orlando.

"This recent drop from 5.5% to 4.5% is directly related to the support of our members and they should be proud to know that every dollar saved by businesses represents an opportunity for them to hire more workers, upgrade equipment, improve wages and increase their footprint in the community," McGraw adds.

The Florida Department of Revenue has released a PDF of tax information explaining how the tax cut may affect businesses.

what does it do

The 1% reduction over the next eight months represents $216 million in savings to local businesses that can be used to fuel business growth, generate new employment opportunities and invest in the workforce.

The impact on Florida's economy will be more pronounced with a further reduction in 2024 and, eventually, a complete elimination of the business rent tax.

While Florida generally has a favorable business environment, Florida realtors and other stakeholders see the BRT as a burden on local businesses that could put the state at a competitive disadvantage.

"Beyond its local impact, fostering a business-friendly tax climate is essential not only to attracting business from outside the state, but also to encouraging Florida-based businesses to expand within the state rather than seek opportunities elsewhere," said a statement from the Florida Chamber of Commerce. “Over the past decade, the Florida Chamber has tirelessly supported the reduction and eventual elimination of the BRT, and while progress has been made, Florida remains the only state in the nation that levies this tax.

history

The rent tax, currently 5.5%, is already lower than the 6% tax record as of 2017. In 2021, the Florida Legislature passed and Governor Ron DeSantis signed, SB 50, which will eventually lead to reduced business rents. Tax up to 2% after the unemployment fund is restored to pre-pandemic levels.

While the 3.5% reduction is significant, it did not provide immediate relief as the projected rate reduction date under the bill's language would not occur until around August 2024. To provide more immediate relief, Florida Realtors, the Florida Chamber of Commerce and others advocated for another reduction during the 2023 session of the Legislature In Florida, which led to a 1% cut on Friday, which will apply for eight months - about the time it will take for the unemployment trust to renew.