Florida Decreases Rate on Real Property Rentals

Florida decreases the sales tax rate on real property rentals to 5.8% from 6%, effective January 1, 2018.

Sales Tax on Real Property Rentals

A Department of Revenue publication explains that Florida imposes the sales tax on the total charged when real property is:

  • rented;
  • leased;
  • let; or
  • licensed.

Some examples of real property rentals subject to tax include:

  • commercial office space;
  • commercial retail space;
  • warehouses;
  • self-storage units; and
  • mini-warehouses.

Applicable Sales Tax Rate

Sales tax applies at the rate in effect during the time the tenant occupies, or is entitled to occupy, the real property, regardless of when the rent is paid. For example, rental charges paid on or after January 1, 2018, for rental periods prior to January 1, 2018, are subject to 6% state sales tax. In addition, rental payments made prior to January 1, 2018, that entitle the tenant to occupy the real property on or after January 1, 2018, are subject to 5.8% state sales tax. Discretionary sales surtax may also apply to the rental charges.

Reporting Sales Tax Due

In addition, the publication discusses the proper reporting of tax due on commercial rentals on sales and use tax returns.

Tax Information Publication, No. 17A01-14, Florida Department of Revenue, November 13, 2017, ¶206-322

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CCHTaxGroup

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