Florida’s Business Rent Tax Drops 1% on Dec. 1
Fla.’s business rent tax, now 5.5%, drops to 4.5% on Friday. Florida Realtors advocates for a complete elimination of the tax and sees this step as a significant victory.
TALLAHASSEE, Fla. – The sales tax rate levied on Florida businesses renting or leasing commercial property – known as the business rent tax (BRT) – drops by a full percentage point on Friday, Dec. 1, going from the current 5.5% to 4.5%.
“Reducing the Business Rent Tax continues to be a high priority for Florida Realtors®, and our efforts over the past six years have helped countless businesses expand and become more successful,” says Florida Realtors President G. Mike McGraw, a broker-associate with LPT Realty in Orlando.
“This latest drop from 5.5% to 4.5% is directly related to the advocacy of our members and they should be proud knowing that every dollar saved by businesses represents an opportunity for them to hire more workers, upgrade equipment, improve salaries and grow their footprint in the community,” adds McGraw.
The Florida Department of Revenue posted a Tax Information Publication PDF explaining how the tax cut may impact businesses.
What it does
The 1% reduction over the next eight months represents $216 million in savings for local businesses that can be used to fuel business growth, generate new employment opportunities, and invest in the workforce.
The impact on Florida’s economy will be more pronounced with a further reduction in 2024 and, ultimately, a complete repeal of the business rent tax.
While Florida generally has a favorable business environment, Florida Realtors and other stakeholders consider the BRT a burden on local businesses that can put the state at a competitive disadvantage.
“Beyond its localized impact, fostering a business-friendly tax climate is pivotal not only for attracting out-of-state businesses, but also for encouraging Florida-based businesses to expand within the state instead of seeking opportunities elsewhere,” says a release from the Florida Chamber of Commerce. “Over the past decade, the Florida Chamber has tirelessly advocated for the reduction and eventual elimination of the BRT, and while progress has been made, Florida remains the only state in the country to levy this tax.
The rent tax, currently 5.5%, is already lower from the tax peak of 6% beginning in 2017. In 2021, the Florida Legislature passed and Gov. Ron DeSantis signed, SB 50, which will eventually lead to a reduction of the business rent tax down to 2% after the unemployment trust fund is replenished to pre-pandemic levels.
While the 3.5% reduction is significant, it didn’t provide immediate relief since the projected date for a rate reduction under the bill’s language won’t occur until around August 2024. To provide more immediate relief, Florida Realtors, the Florida Chamber and others advocated for a further reduction during the 2023 session of the Florida Legislature, which led to Friday’s 1% cut that’s effective for eight months – roughly the time it will take for the unemployment trust to be replenished.
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