Big news for Florida commercial property owners and tenants: the state is eliminating sales tax on commercial rent, starting October 1, 2025. This significant change affects not just base rent, but also Common Area Maintenance (CAM) charges, property tax reimbursements, insurance costs, and other charges typically found in triple net leases. If you’re a landlord, property manager, or commercial tenant in Florida, understanding how this repeal impacts your billing, lease agreements, and tax obligations is critical. Here’s everything you need to know to navigate this transition smoothly.
Under current law (through September 30, 2025), Florida imposes sales tax not only on the base rent but also on additional rent charges commonly found in triple net leases (e.g., CAM, property taxes, insurance, maintenance, utilities) when they are required as part of the rental consideration.
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- Florida Admin. Code Rule 12A-1.070(4)(b) treats these payments as part of the taxable rent.
- So today, if you’re charging CAM or tax reimbursements under a triple net lease, you must collect sales tax on those items just like on base rent.
Starting October 1, 2025, the repeal eliminates the sales tax on all consideration paid for the use of commercial real property, including:
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- Base rent
- Percentage rent
- CAM charges
- Insurance and tax reimbursements under triple net leases
The Department of Revenue’s Tax Information Publication (TIP 25A01-04, July 25, 2025) confirms that “the repeal applies to all charges subject to tax as rent or license fees for real property,” which includes triple net structures. The repeal also eliminates the county surtax on these charges as of the same date.
What You Should Do Now
- Landlords and property managers should:
- Continue collecting and remitting sales tax (and any local surtax) for occupancy periods through September 30, 2025.
- For occupancy periods on or after October 1, 2025, stop charging sales tax.
- Update billing systems, lease agreements, and tenant communications to reflect the repeal.
- File any final returns—even if they are “zero returns”—for the final reporting period. The Department of Revenue will subsequently update your account.
- Link: The Department of Revenue’s Tax Information Publication (TIP 25A01-04, July 25, 2025)
- Tenants, especially those in subleased or shared-use arrangements, should:
- Confirm that invoices no longer include sales tax for periods on or after October 1, 2025.
- Review lease clauses that reference “applicable sales tax” and adjust mechanisms for automated payments.
Considerations
There are a few scenarios where sales tax returns may still need to be filed for commercial rents:
- Back Rent
- If rent is collected after September 30th for a prior period, this rent is still taxable. Sales tax must be collected on only the amounts for the prior period, and a sales tax return must be filed.
- Property Taxes
- If a tenant is required to reimburse the landlord for property taxes, this may occur after the last commercial rent sales tax return is required, such as an annual reimbursement for property taxes. Since the property tax reimbursement covers taxable periods, sales tax must be collected, but only on the prorated periods before October 1st, 2025. Alternatively, if property tax is included with the tenant’s rent payment and is remitted on the sales tax return monthly, this additional sales tax return will be unnecessary, as the sales tax has already been remitted.
Tax changes like this don’t have to be complicated. At Archer Lewis, we work alongside Florida property owners and managers to make sense of regulatory shifts and keep your operations running smoothly. We’re not just filing returns—we’re helping you understand what this repeal means for your specific properties, updating your processes, and ensuring nothing falls through the cracks during the transition. From triple net lease adjustments to final return filings and back rent considerations, we’ve got the expertise to guide you through every detail. Reach out today, and let’s make sure you’re positioned to benefit fully from Florida’s commercial rent tax repeal.
