Here is an update to last week’s post:
Good news for Florida Businesses – yesterday, April 26, 2017, The Florida State House of Representatives voted unanimously 117-0 to pass HB 7019, which among other things reduces sales tax of commercial rents from the current 6% down to 4.5 percent in 2018 and 2019 and 5.5 percent in 2020 and thereafter. The bill still needs to be approved by the Senate.
From the bill starting on line 478:
Section 16. Effective January 1, 2018, paragraphs (c) and (d) of subsection (1) of section 212.031,Florida Statutes, are amended, and paragraph (e) is added to that subsection, to read: 212.031 Tax on rental or license fee for use of real property.— (1)(c) For the exercise of such privilege, a tax is levied at the rate of 5.5 percent, except for the period beginning January 1, 2018, and ending December 31, 2019, during which period the tax shall be levied at the rate of 4.5 percent, of and on the total rent or license fee charged for such real property by the person charging or collecting the rental or license fee.
For a typical office tenant paying $25 per square foot for 5,000 square feet, the 1.5% reduction equates to $1,875 per year, enough to pay for a couple of lunches and trips to Starbucks. But Florida remains the only state to charge sales tax on rent. And yes, because real estate tax is included in rent, Florida businesses will continue to pay tax on tax. No complaints here, though, Florida is still one of only seven states with no state income tax, so we have only enhanced Florida’s status as a great place to do business. Thanks to Rick Orr of totalcommercial.com for passing this information along to me.
This brings me to my final point – how would you like to pay no State income tax and no sales tax on rent? Buy an office condo in Florida. I have 7,032 to 17,958 square feet of office condo space available in Boca Raton.