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Florida Senate Bill 50 Reduces the Tax Rate on CRE Leases

Chris Owen • 10/27/2021

Renting space in Florida is going to get cheaper.

  

Florida is one of the few states that taxes the total rent charges for leasing commercial real estate including space in office, retail or warehouse buildings, including self-storage units. Last year, the state legislature passed a law requiring out-of-state retailers to collect sales tax on purchases by Floridians. The proceeds, estimated to be around $1 billion a year, will be used to replenish the unemployment fund which was depleted during the pandemic.

What this means for businesses renting space in the state is a reduction in costs once the trust fund reaches $3.35 billion. It means a tenant paying $44 PSF gross for 25,000 SF office space in Florida is on average currently paying $60,500 annually in state sales tax. That amount drops to $22,000 annually once the unemployment fund is replenished by the end of 2023.

Please download the graphic for more information and links to government resources.

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