Florida is officially ending the state sales tax on commercial rent. Starting October 1, 2025, no state or local sales tax will apply to lease or license fees for commercial property. If you rent office space, warehouses, retail storefronts, or even self-storage units, this change affects you.
This is a welcome update, but it can also cause confusion. Many landlords and business owners have been collecting and reporting this tax for years. With the rules changing, it is important to know what still applies, what stops applying, and how to handle the transition correctly.
The good news is that this repeal lowers the cost of doing business in Florida. It also simplifies compliance for companies that do not sell other taxable products or services. This article will walk through the key details and help you prepare.
What is changing on October 1, 2025?
Starting with rental or occupancy periods that begin on or after October 1, 2025, the state will no longer require sales tax on commercial rent. This applies to most types of commercial property, including:
- Office space
- Retail shops
- Warehouses
- Self-storage units
Both the state tax and any local discretionary surtaxes are included in this repeal. If the period begins on or after October 1, the transaction is no longer taxable regardless of when the payment is made.
What is NOT changing (and still taxable)?
This repeal is not retroactive. If you collect rent for a period that ends on or before September 30, 2025, sales tax still applies. It does not matter when you collect the payment. If the rental period is taxable, you must remit the sales tax.
In addition, certain rentals are not covered by this repeal. These remain taxable:
- Short-term rentals under six months
- Parking and vehicle storage spaces
- Boat docking and storage slips
- Aircraft tie-down or storage spots
If your business sells other taxable products or services, you must continue to collect and report sales tax on those transactions. Only the tax on commercial rent is going away.
Handling Payments Around the Transition Date
This transition brings up a few tricky timing questions. Here is what you need to know:
- Rent collected in September 2025 for an October rental period is not taxable
- Rent collected after October 1 for a prior period (such as August rent paid late) is taxable
- If you already collected and remitted tax for a non-taxable period (such as October through December rent paid early), you can request a refund, but only after you return the tax to the tenant
The Florida Department of Revenue requires that landlords refund tax to the customer before requesting a refund from the state. Tenants cannot go directly to the Department for reimbursement.
What do landlords need to do about filing returns?
The repeal does not mean you can stop filing tax returns right away. Landlords must continue to file through the end of their assigned reporting cycle that includes September 2025. That means:
- Monthly filers: Submit July, August, and September 2025 returns
- Quarterly filers: Submit third quarter 2025 return
- Semiannual filers: Submit return covering July through December
- Annual filers: File as usual for the full 2025 calendar year
Even if no tax is due in the final period, you must still file a return. The Department of Revenue will automatically update your account once your final return is processed. You do not need to request a closure.
Keep your books and records for at least three years, per state law.
How does this affect tax credit scholarship contributions?
Florida’s sales tax scholarship program is also affected. Starting July 1, 2025, no new tax credit allocations related to commercial rent will be issued. However, businesses may still use credits earned before July 1 to reduce tax owed on rent paid through September 2025.
If you plan to use any credits, make sure you apply them before your final return is submitted.
What if I have penalties, interest, or other issues on my account?
The repeal does not erase prior liabilities. If you have late returns, penalties, or interest, you will still need to resolve those. The fastest way to pay is through the Department’s online bill payment system.
Do tenants need to do anything?
Tenants should double-check their invoices for October 2025 and beyond. If they are still being charged sales tax on commercial rent, they should ask their landlord to remove it.
If a tenant is mistakenly charged tax after the repeal date, the refund must come from the landlord. The Department of Revenue will not issue tenant refunds directly.
The Bottom Line
Florida’s repeal of sales tax on commercial rent is a win for business owners. It reduces costs and removes a long-standing compliance headache. Still, the change creates a few final steps that need attention.
Make sure you file any remaining returns through your normal 2025 schedule, issue or request applicable refunds, and update your systems so no tax is collected on rent for periods beginning October 1. If your situation is more complex, such as mixed-use property or open tax liabilities, do not guess. Talk to a tax advisor before making changes.
For questions about how this affects your business, contact DiMercurio Advisors today.
