Management: A Small But Powerful Victory

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Posted on October 6, 2017
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Management: A Small But Powerful Victory

By Laura Juteau

With so many small businesses moving into the Orlando, Tampa and Southwest Florida markets from out-of-state many do not realize that Florida is the ONLY state that has a Business Rent Tax. Furthermore, these new residents don’t know that this tax applies to any rent and has additional charges for commercial properties, including storefronts, offices and warehouses.

Currently the rate is at 6% and can go up to 8% depending on where you conduct your business in the state. Some businesses believe this money could be well spent on other things such as an increase in employee wages.

Thanks to the continuing efforts to abolish this tax from numerous organizations (such as the Florida Chamber of Commerce, the Building Owners & Managers Association and many others throughout Florida) progress is in the works.
Finally, on May 25, 2017, a milestone occurred with Governor Scott signing HB 7109, a bill which reduces the Florida business rent tax from 6% to 5.8% effective January 1, 2018, along with other tax cut provisions. It may not be a huge amount, but sometimes progress occurs in small changes.

I think we can all agree that this is a step in the right direction in hopefully eliminating this tax all together in the future.

 

“Governor Scott’s proposed reduction in this tax will help economic development councils and industry groups attract new businesses to their regions. It will also begin to eliminate the unfair double taxation that occurs when tenants are forced to pay sales tax on property taxes collected as part of their lease.”
Sherri Meadows, Former President – FL Realtors

“Most companies relocating to the Sunshine State are surprised to learn that Florida charges a 6 percent sales tax on commercial real estate leases. Realtors applaud the Governor for his efforts to reduce this tax which will make Florida much more competitive.”
John Sebree, Former Senior VP Public Policy – FL Realtors

“Many elements of commercial leases are calculated in the taxable base, so reducing this tax burden will immediately help the bottom line of Florida’s top job creators — small businesses. Because the sales tax on commercial leases is not imposed by most states, reducing it will make Florida a more attractive location for retailers.”
Rick McAllister, Former Pres./CEO-FL Retail Federation

“The economic impact of a $100M reduction in this tax would provide over $500 million in value to Floridians in terms of jobs and economic activity. We appreciate Governor Scott for recognizing the importance of reducing this tax.”
Danny Smith, Former Chairman-FL Realtors Commercial Alliance

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