Effective January 1, 2020, the State of Florida’s sales tax rate on commercial real property lease payments (including base rent and additional rent) was reduced from 5.7% to 5.5% for payments received for occupancy periods beginning on or after January 1, 2020.
Real property leases are taxed on base rent as well as other payments tenants must make as a condition of their occupancy. This includes common-area maintenance fees, property taxes and utilities payable by the tenant as outlined in the lease.
In addition to the state tax, the property owner is required to collect from tenants any county-imposed local-option sales surtax on the total rent charged. In Hillsborough County, the surtax is 2.5% bringing the total sales tax to 8%. In Pinellas, Polk, Lake, Manatee, Sarasota and Pasco Counties the surtax is 1%, bringing the total sales tax to 6.5%.
These sales taxes are not typically included in the rental rates quoted by landlords. As the sales tax is not insignificant, it’s very important for commercial tenants to include sales taxes when preparing annual budgets.
Mobiliti CRE specializes in representing tenants with expansions, contractions, renewals, and moves. We would be happy to assist you with your commercial real estate requirements. Contact us today at 813-300-2227 or via email at email@example.com.