Realtors advocated, Florida’s Business Rent Tax ended

Starting Oct. 1, Florida businesses have not had to pay sales tax on commercial leases — a change worth billions annually. For South Florida, this victory shows how Realtor engagement benefits the entire business community — because the idea to end the tax started in a MIAMI REALTORS® boardroom 15 years ago.

For nearly two decades, MIAMI REALTORS® and Florida REALTORS® led the charge to end a tax that was as high as 7% in South Florida. Realtors advocated, collaborated and persisted through countless meetings with lawmakers until success was achieved. 

The full repeal is one of the most significant advocacy wins in history. Florida businesses will now save $2.5 billion annually to reinvest in jobs, equipment and growth. Just as importantly, Florida is no longer the only state in the nation taxing commercial leases. We now stand on equal footing with our peers in attracting and retaining businesses.

Launching the idea to end the Florida BRT

In 2010, the MIAMI REALTORS® Commercial Board of Governors discussed a technical but consequential issue: the Florida Department of Revenue’s interpretation of what constitutes “rent” under state law. A series of administrative rulings and case law in the late 2000s had confirmed that “all rent” on commercial leases included not only base rent but also pass-through charges like property taxes, insurance premiums and common area maintenance on triple-net leases.

The impact was clear: Tenants were paying sales tax not only on their rent but also on these additional costs of occupancy. At that meeting, one leader highlighted the competitive stakes — Florida was losing business to North Carolina because Florida imposed a sales tax on commercial leases while North Carolina did not. That insight proved to be the spark for a statewide advocacy movement.

Building the case

MIAMI REALTORS® raised the issue with Florida REALTORS®, which commissioned a comprehensive study to evaluate the issue. The findings were striking: Florida was the only state in the nation imposing a sales tax on commercial leases.

That revelation transformed the conversation. To lawmakers and the public, the technical language of “sales tax on commercial leases” was difficult to digest. So, the advocacy team rebranded the effort with a clearer, more compelling label: the “Business Rent Tax” (BRT). The name resonated, and momentum began to build.

Chipping away at the tax

Thanks to persistent advocacy, the Florida Legislature began reducing the tax in 2017. Each cut represented hundreds of millions in annual savings. Stakeholders from across the spectrum — Realtors, chambers of commerce, small-business owners and corporate tenants — united around the effort, emphasizing that the BRT was not just a real estate issue but an obstacle to economic growth.

Persistence paid off. Over time, the legislature continued to chip away, gradually lowering the rate. What began as a 6% state tax was reduced step by step, until in 2025, the final victory was within reach. In June, the legislature passed House Bill 7031, signed into law by Governor Ron DeSantis, providing for the full repeal, effective Oct. 1.

The repeal applies to all rent or license fees for commercial real property beginning on or after that date. Any rent covering periods through Sept. 30 remains taxable — even if paid later. It’s important to note what the repeal does not cover: Short-term residential rentals (six months or less), parking or storage for vehicles, boats or aircraft and other specific rentals remain taxable under other sections of Florida law.

$2.5 billion annual economic impact

Florida REALTORS® estimates the repeal will save businesses about $2.5 billion annually. This reflects the 2.5% reduction effective Aug. 1, 2023, under Senate Bill 50 (2021), the 2% repeal in HB 7031 effective Oct. 1, and the elimination of the local discretionary sales surtax (up to 1.5%, depending on the county).  

To put this into perspective:

• According to Lee & Associates’ Q2 2024 report, the South Florida office average rent was $37.02 per square foot.  With the repeal of both the 2% state tax and the 1% local surtax in Broward, Miami-Dade and Palm Beach counties, tenants will save $1.11 per square foot.  Combined with the 2023 reduction, the total savings reach $2.78 per square foot.  
• In Brickell, where office rents average $86.83 per square foot, the two-year phase-out will save tenants $4.78 per square foot.

Landlords, property managers and tenants should prepare now. Lease templates and accounting systems will need to be updated to remove references to the Business Rent Tax. Rent and CAM invoices should be carefully reviewed to ensure charges for occupancy periods after Sept. 30 are no longer taxed. Prepayments or overlapping periods should also be reconciled to avoid confusion and ensure the savings are recognized immediately.

A model of advocacy

The elimination of the Business Rent Tax is the result of 15 years of strategic advocacy. It began with a local boardroom discussion about the unfair pass-through taxation, grew with research highlighting Florida’s unique disadvantage and gained momentum through smart messaging and relentless persistence.

As of Oct. 1, Florida businesses are finally free from this burdensome tax. The repeal stands as one of the most significant advocacy wins in Florida REALTORS® history — proof that when Realtors lead, the entire business community benefits.

Danielle Blake is chief of residential and advocacy for the MIAMI Association of REALTORS®.