- Florida has repealed its commercial lease sales tax, effective October 1, ending a decades-old policy unique to the state.
- Tenants across Florida are expected to save an estimated $900M annually, freeing up capital for hiring, expansion, and operational improvements.
- The repeal levels the playing field for Florida, which had been the only state to levy a sales tax on commercial leases since the 1960s, potentially making it more attractive to relocating or expanding businesses.
A Long-Awaited Change
As of October 1, Florida no longer charges a sales tax on commercial leases, marking a significant shift in the state’s business climate, reports CoStar. Signed into law by Governor Ron DeSantis in June, the repeal eliminates both the state’s base tax and county-level surtaxes that applied to commercial lease agreements.
This move brings Florida in line with the rest of the US It had been the only state to continue taxing commercial rent since the 1960s.
Why It Mattered
The now-defunct tax didn’t just apply to base rent. It also included charges for property management, CAM fees, insurance, and more. These costs added up quickly, especially for large tenants.
“It was a bad tax,” said Mike Griffin, vice chair at Savills and co-head of the firm’s Florida region. “It penalized business growth and made Florida less competitive for site selection decisions.”
In high-cost leases, especially across major metros like Miami, Tampa, and Orlando, the added expense could total thousands—or even millions—annually.
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A Boost For Growth
With the repeal, Florida tenants could see a collective $900M in annual savings. According to Griffin, this will allow businesses to reinvest in their workforce, expand footprints, and make the state more competitive in attracting new entrants.
Beyond direct cost savings, the tax’s removal is expected to encourage more leasing activity. It could also unlock previously stalled decisions. This is especially true for companies uncertain about expanding within or relocating to Florida.
“This will fuel additional growth,” said Griffin. “It removes a long-standing barrier and helps companies stay competitive.”
What’s Next
As the savings materialize, the commercial real estate sector is watching closely. Industry leaders want to see if leasing velocity picks up. There is also interest in whether out-of-state companies increase their activity in Florida markets. The policy shift could have ripple effects across development, investment, and job creation statewide.
For now, one thing is clear: Florida just became a more attractive—and cost-effective—place to do business.
