On June 30, 2025, Governor Ron DeSantis signed Florida House Bill 7031, which among other things, fully removes the state and county sales tax on commercial real property leases. This change takes effect October 1, 2025, and follows what has been a reduction on the sales tax on commercial leases over the last several years. Landlords and tenants will both share in immediate and ongoing savings, streamlined operations, and increased competitiveness for Florida’s commercial properties. Florida is now the only state in the country to fully eliminate this type of tax.
Importantly, the repeal applies to all commercial leases, including those that are currently in effect. However, it only eliminates tax on rent attributable to occupancy on or after October 1, 2025. If rent payments are paid for any period before that date—even if it’s billed or paid after October 1, 2025—it is still subject to the then existing sales tax. Landlords should continue collecting and remitting taxes on pre-October rent as usual.
The application of the law to existing leases means there is no need to rewrite current lease agreements, even if they identify or indicate the requirement to pay sales tax. However, your accounting systems and billing processes should be reviewed and updated. Automated rent invoicing should stop applying sales tax for periods beginning October 1, 2025 and beyond, unless you are also billing for separate taxable items such as equipment, furniture, or parking.
Notably, this law does not apply to short-term residential rentals (6 months or less), parking/docking, or aircraft hangar rentals. Those lease agreements are still subject to sales taxes.
We also recommend that landlords notify tenants about the change. Tenants will likely appreciate knowing that their rent will no longer be subject to this extra tax, and clear communication will help avoid billing and payment confusion and errors during the transition.
If you have any questions or would like to discuss this law or how you can re-work your lease agreements, please feel free to reach out either Michael Kean or Allen Heffner.
Michael Kean and Allen Heffner of the Loren & Kean Law Firm are based in Palm Beach Gardens and Fort Lauderdale. Mr. Kean and Mr. Heffner handle a wide variety of matters related to commercial real estate law, including commercial landlord/tenant matters. Mr. Kean and Mr. Heffner can be reached at mkean@lorenkeanlaw.com or  aheffner@lorenkeanlaw.com  or 561-615-5701.
