Effective October 1, 2025, Florida has, at long last, repealed the collection of sales taxes on commercial lease payments. This change brings Florida in line with nearly every other state and locality in the United States. House Bill 7031, signed into law earlier this year, repeals both the Florida state sales tax (previously 2%) and any local surtaxes (ranging from 1% to 1.5%) on commercial lease rent payments for occupancy periods on or after October 1.

The repeal applies only to sales taxes on commercial lease rental payments. It does not affect sales tax due on other types of rental income, such as short-term residential rentals (including Airbnb transactions), which remain taxable.

However, it’s not all sunshine.  Because tax liability is determined based on the occupancy period rather than the date of payment, landlords and tenants will likely need to address certain accounting and refund issues as a result of the timing of the repeal.  For example, if a commercial tenant prepaid rent and included sales tax in that payment, the landlord should refund or credit the portion of that payment that represents the sales tax for an occupancy period occurring on or after October 1.  Conversely, if a commercial tenant pays past-due rent after October 1 for an occupancy period before October 1, then sales tax will still apply (even though those payments occurred after the repeal’s effective date). 

Despite these administrative nuances, the repeal marks a significant win for Florida’s commercial leasing market, reducing costs for tenants and making the state even more attractive as a business destination.