On October 1, 2025, Florida will officially eliminate its state and local sales tax on commercial leases, marking a historic shift in the state’s business landscape. Signed into law by Governor Ron DeSantis via House Bill 7031, this repeal ends a tax that’s been in place since 1969—making Florida the last state in the nation to tax rent paid by businesses leasing office, retail, industrial, or warehouse space. [2025 Bill…ida Senate]
For business brokers like myself, and for the thousands of entrepreneurs we serve, this is a game-changer.
What’s Changing—and When
Florida’s business rent tax, once as high as 6%, had been gradually reduced over the years, landing at 2% in 2024. HB 7031 repeals Section 212.031 of the Florida Statutes, eliminating both the state-level tax and county discretionary surtaxes on commercial rent. [Florida HB…olland …]
Effective Date:
- October 1, 2025: No sales tax will apply to rent for occupancy periods on or after this date.
- Important Caveat: Rent paid after October 1 for prior months (e.g., September) is still taxable. [TIP No: 25…of Revenue]
Who Benefits—and How Much
Business Tenants
- A tenant paying $10,000/month in rent will save $2,400 annually, plus any local surtax savings.
- These savings can be reinvested into hiring, marketing, equipment, or expansion.
Landlords
- Lower occupancy costs may increase demand, improve lease-up rates, and boost property values.
- Administrative burdens around tax collection and remittance will be reduced.
Florida’s Business Climate
- The repeal removes a longstanding deterrent to relocation and expansion.
- Florida becomes more competitive nationally, especially for startups and multi-location operators. [Florida El…s Rent Tax]
What’s Still Taxable
Not all rental transactions are exempt. The following remain taxable under Section 212.03: [TIP No: 25…of Revenue]
- Short-term residential rentals (less than 6 months)
- Parking garages and boat slips
- Aircraft hangars
- Self-storage units
- Equipment rentals within commercial leases
Action Steps for Brokers, Tenants, and Landlords
Tenants
- Review lease agreements for clauses referencing “applicable sales tax.”
- Update payment systems to stop remitting tax for post-October occupancy.
- Use projected savings as leverage in renewal or expansion negotiations.
Landlords
- Update billing systems to reflect the repeal.
- Continue filing returns for pre-October periods, even if no tax is due.
- Consider issuing tenant notices outlining the change.
Brokers and Advisors
- Educate clients on the repeal’s impact.
- Review lease templates to remove outdated tax language.
- Help clients budget for lower occupancy costs in Q4 2025 and beyond.
Strategic Implications for Business Sellers
As a business broker, I see this repeal as a value multiplier for sellers:
- Lower rent costs improve net operating income, which can increase valuation.
- Buyers evaluating Florida businesses will now see reduced overhead, making deals more attractive.
- Sellers should recast financials to reflect post-repeal savings and update CIMs accordingly.
Final Takeaway
Florida’s repeal of the commercial rent tax is more than a policy change—it’s a strategic opportunity. Whether you’re a tenant, landlord, or preparing to sell your business, this shift opens the door to real savings, stronger valuations, and more competitive deal-making.
If you’re unsure how this affects your lease, your business sale, or your investment strategy—let’s talk. At Transworld, we’re already helping clients prepare for this transition and capitalize on the benefits.
Michael Shea represents the Tampa Florida Transworld office. In business since 2005, he has established a reputation as a trusted business broker across Florida’s key markets- from Tampa to Orlando, Melbourne, and more. Over the past two decades, Michael and his team have closed over $1 Billion in sold business volume and presided over more than 450 transactions. His credentials include the IBBA Certified Business Intermediary®, and most recently, the prestigious Certified Exit Planning Advisor® (CEPA) credential.