It looks like Florida will FINALLY eliminate the sales tax on commercial rent!!!! House bill 7031 passed the Senate late in the evening on June 16th, 2025 after one of the longest budget battles in Florida’s history. The enrolled version will head to the Governor’s desk. Since eliminating the sales tax on commercial rent was one of Governor DeSantis’ primary asks at the beginning of the legislative session, the bill is expected to be signed into law.
The legislation requires dozens of charges throughout the statute that reference the sales tax on commercial rent, but the primary language in the bill that everyone is focused on was:
“Effective October 1, 2025, section 212.031, Florida Statutes, is repealed.”
Section 212.031 has been the sales tax on rental or license fee for use of real property since 1969. Florida has been the only state in the country to impose a sales tax on commercial rent. It has been considered a real disadvantage to attracting large business’s to the state, so Florida has been trying to reduce/eliminate the tax since 2016.
The estimate cost to the last 2% reduction of the tax rate is over $900,000,000. That was a big budget item to overcome, causing much of the turmoil this legislative session.
It is also important to note that the legislation headed to the Governor’s desk also provides for the repeal of the local discretionary surtax on commercial real property rental.
It appears that one of the biggest battles in the legislative session was a call to reduce the overall state sales tax rate in Florida from 6% to 5.25%, which had an estimated annual cost of $5 billion dollars. While the reduction would have lowered the tax rate for residents, it would have also lowered the tax rate for tourists (a huge revenue source for Florida that is NOT borne by Florida residents). The battle appears to have focused on a way to lower taxes for residents while still leaving the same high tax burden on tourists.
Instead, the legislation made permanent several tax holidays that we Floridians have gotten used to of late, including a Back-to-School tax holiday, hurricane preparedness tax holiday, and a year-round exemption into state parks among other exemptions.
About the Author: James Sutton is a Florida licensed CPA and attorney as well as a shareholder in Moffa, Sutton, & Donnini, PA. Mr. Sutton is charge of the Tampa office of the firm and practices almost exclusively in the area of Florida Sales & Use Tax Controversy. Mr. Sutton handles audits, protest, litigation, criminal cases, revocations, collections, and consulting engagements all in the area of sales tax. Mr. Sutton is an active member in the FICPA, AICPA, AAA-CPA, and FIADA. Mr. Sutton is also the State and Local Tax Chairman for the AAA-CPA and past president of the Florida AAA-CPA. For 2022 to 2024, Mr Sutton was the Chairman for the State Tax Committee for the FICPA. Otherwise, you can learn more about Mr. Sutton in his firm bio HERE and you call him directly at 813-775-2131.
About the Firm: At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We even have former sales tax auditors on staff. We represent taxpayers and business owners from the entire state of Florida. Contact us for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
AUTHORITY
HB 7031 enrolled version as amended June 17, 2025
ADDITIONAL RESOURCES
FL SALES TAX AUDIT – FROM AUDIT NOTICE (DR-840) TO NOPA, published September 17, 2023, by Matthew Parker, Esq.
FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, CPA, Esq.
FLORIDA SALES TAX: ARE TARRIFS TAXABLE?, published May 24, 2025, by James Sutton, CPA, Esq.
FLORIDA SALES TAX: TRANSFEREE LIABILITY, published June 13, 2025, by James Sutton, CPA, Esq.
FLORIDA SALES TAX ARREST: FT LAUDERDALE CAR DEALER, published June 9, 2025, by James Sutton, CPA, Esq.