Florida’s Commercial Rent Tax Repeal: One Year Later and What’s Ahead for 2026

When Florida officially repealed its commercial rent sales tax in June 2024, it became the only state in the country to eliminate the tax on commercial lease payments. Now, as 2025 draws to a close, the full impact of that change is becoming clear — and it’s reshaping the state’s business and real estate heading into 2026.

The repeal has made Florida more attractive to investors, reduced costs for tenants, and spurred redevelopment in key commercial corridors. But it has also raised new compliance and contract questions for landlords, developers, and brokers navigating the first full year under the new tax-free framework.

A Quick Recap: What Changed

Before the repeal, Florida charged a 5.5% state sales tax on rent for commercial spaces such as offices, retail storefronts, and industrial warehouses. Landlords collected the tax and remitted it to the Florida Department of Revenue, increasing occupancy costs for businesses across the state.

On June 1, 2024, the rate dropped to 0%. That single change eliminated the sales tax burden on all commercial leases — new and existing — and brought Florida in line with every other state that does not tax business rent.

What 2025 Has Revealed So Far

With one full year of data and experience, both the benefits and the complications of the repeal are coming into focus.

1. Leasing Activity Is Surging
Businesses are reinvesting savings from the tax repeal into expansion. Florida’s office and industrial markets have shown measurable leasing growth in 2025, particularly in Broward and Miami-Dade counties. For small and mid-sized tenants, the savings amount to thousands of dollars a year — often enough to fund buildouts or equipment upgrades.

2. Property Values Are Rising
With lower operating costs and stronger tenant demand, commercial properties are becoming more valuable. Appraisers are beginning to adjust capitalization rates to reflect improved net operating income (NOI), giving property owners a measurable boost in asset value.

3. Lease Language Is Creating Legal Issues
Many leases signed before mid-2024 still contain outdated clauses requiring sales tax collection on rent. Some landlords have continued to charge the tax by mistake, while others have faced refund requests from tenants who overpaid. These issues are driving a noticeable increase in lease amendment requests and contract disputes in 2025.

4. Developers Are Gaining Momentum
Lower leasing costs have encouraged developers to move forward with delayed projects. Adaptive reuse and mixed-use developments are particularly active, with investors taking advantage of Florida’s competitive business environment and rising population growth.

5. Brokers Are Using the Repeal as a Selling Point
Real estate professionals are promoting Florida’s “no tax on commercial rent” status as a major advantage for relocating companies. In a national market where operating costs matter more than ever, this remains a persuasive marketing angle heading into 2026.

Key Compliance Steps for Property Owners

Even though the tax is gone, landlords and property managers still have obligations to keep their leases and accounting records compliant.

• Review and update all lease templates to remove any language referencing rent sales tax.
• Audit invoices issued after June 2024 to ensure that no tax was accidentally charged or remitted.
• If tax was collected in error, coordinate with the Florida Department of Revenue to process tenant refunds or credits.
• Adjust property management software to prevent future billing issues.
• Communicate clearly with tenants to confirm that future rent invoices reflect the 0% rate.

Emerging Legal Disputes

Feinstein Real Estate Litigation & Business Law is seeing a growing number of commercial lease disputes tied to the repeal. Common issues include overcollection of rent tax, delayed refunds, miscalculated CAM (common area maintenance) charges, and confusion over “triple-net” lease provisions that still reference sales tax. These disputes will likely continue into 2026 as older leases renew and portfolios are updated.

What to Expect in 2026

As the repeal enters its second full year, the focus will shift from adjustment to optimization. Landlords will continue revising long-term leases and using the savings to reinvest in property improvements. Tenants may see moderate rent increases as landlords capture part of the savings through market adjustments, while developers will likely expand projects that stalled during higher-cost years.

The Florida Department of Revenue is also expected to release further clarification on how the repeal affects subleases, CAM pass-throughs, and mixed-use contracts. Staying informed and working with experienced real estate counsel will remain essential through 2026.

Bottom Line

The repeal of Florida’s commercial rent sales tax is proving to be one of the most impactful business reforms in state history. It’s lowering barriers for companies, attracting new investors, and strengthening the real estate market from Miami to Jacksonville. But it also demands careful attention to contracts, accounting, and compliance — areas where small errors can still lead to major disputes.

With 2026 approaching, property owners, managers, and investors should ensure their documentation is up to date and that their lease terms align with Florida’s new tax-free reality. Doing so now will help avoid costly mistakes later and position their properties for long-term success.

Feinstein Real Estate Litigation & Business Law
501 E Las Olas Blvd, Suite 300, Fort Lauderdale, FL 33301
Phone: (954) 767-9662
Website: www.feinsteinlaw.net

Feinstein Real Estate Litigation & Business Law advises landlords, developers, and commercial tenants throughout South Florida on lease disputes, contract compliance, and real estate development matters.