Higginbotham-Baldeon Enrolled Agents, Inc.

November is here, and it is time to prepare for Thanksgiving and celebrate with your family and friends.  I have great news for people who received rental income.  In June 2025, the Florida Legislature passed and the Governor signed House Bill 7031.  Among its provisions, one of the most important was that the sales tax on commercial property was abolished from October 1, 2025.  Effective October 1, 2025, the state sales tax imposed on rent or license fees for using real property (commercial rentals) is repealed pursuant to Section 212.031, Florida Statutes (FS).  This means that no state sales tax or discretionary sales surcharge applies to rent or license fees for lease or occupancy periods beginning on or after October 1, 2025.  Examples of commercial rentals subject to the repeal include rentals of commercial office or retail space, warehouses, and self-storage units.  Perhaps the repeal is not for all rentals.  The repeal does not affect other types of rentals under different statutes, including the short-term residential rentals (leases for six months or less) under § 212.03.  Parking lots/garage spaces for motor vehicles, boat slips/docks, aircraft hangars/storage.  Also, rental of tangible personal property (equipment, etc.) is still taxable.  Moreover, the tax applies to any lease, rental, or license fee that covers periods before October 1, 2025, even if payment is made afterward.  For example, if a tenant pays in October for occupancy that took place before the repeal date, the tax still applies.  Next, excluded from repeal, the sales tax and any applicable discretionary income surtax continue to apply to: Rent or license charge bills for rental or occupancy periods through September 2025, even if the fee is made on or after October 1, 2025.  Example: If a tenant will pay the August 2025 lease in October, the country sales tax of two % plus any relevant discretionary sales surtax must be pronounced and remitted to the Florida Department of Revenue; Sales tax imposed beneath s.  212.03, FS, on: Rentals or rentals of living, snoozing, or housework hotels for six months or less (temporary rentals); Parking or storage spaces for motor vehicles in parking masses or garages; Docking or storage areas for boats in boat docks or marinas; Tie-down or storage space for aircraft at airports.  You must file returns for monthly, quarterly, through September 2025, semi-annual, and annual reporting periods through December 2025, even if no tax is due.  If you have filed and submitted the tax for October – December 2025, first refund the sales tax to the tenant before requesting a refund.  More good business tax stuff next month.  Remember, this is a very brief overview.  It is your responsibility to discuss any tax and financial changes with your professional advisor for assistance in evaluating your situation.  For details and specific assistance in applying the general information in this article, call us at your earliest convenience or contact your tax advisor. Provided by Pedro L. Baldeon, E.A., (321) 632-5726, a member of the National Society of Tax Professionals.