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Proposed Legislation to Reduce Sales Tax on Leases

The State of Florida Department of Revenue collects sales tax on commercial leases. If someone leases an office in Alachua County to run their business, they are required to pay an additional 6% to the Landlord, who then passes it along to the Florida Department of Revenue. If an individual owns property in their personal name and leases it to their business (LLC, Corporation etc), they are STILL required to pay this tax. On $1,000/month, it’s an extra $60. On $4,000 it’s an extra $240. This payment is made every month!

I sit on the Florida Realtors Commercial Council, and just received notice that there are two bills, one in the Florida House and one in the Florida Senate, that if passed would reduce this over time. The bills propose to reduce the sales tax each year by 1%. In 2014 it would be 5%, and by 2018 it would be 1%.

The 2013 Legislative Session begins on March 5 and it is hoped that these bills will be addressed during this session.

When a company is looking to expand to another state, Florida is at an immediate disadvantage if the other states being considered don’t charge sales tax on leases. The reason that the proposed legislation doesn’t immediately eliminate the tax is that the legislators have to find ways to offset the loss of revenue through cuts or other funding sources.

I strongly encourage you to contact your local elected representatives to advocate for the reduction of sales tax collected on commercial leases. I believe that these taxes are an unnecessary burden on businesses, economic growth, job creation, and ultimately Florida’s citizens.

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