TAX ALERT: Florida’s Business Rent Tax Is Finally Gone

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On June 30, 2025, Governor Ron DeSantis signed House Bill 7031, wiping out both the 2 percent state sales tax and the 1–1.5 percent local surtax on commercial real-property leases. The change takes effect October 1, 2025.

The repeal leaves roughly $1.53 billion a year in business pockets instead of state coffers. Florida Realtors pegs the tenant windfall closer to $2.5 billion. Either way, that’s payroll, inventory, or expansion capital suddenly available for SMBs. As one broker quipped, “It’s like finding free square footage under the doormat.”

Below are the steps tenants and landlords should take now, plus other HB 7031 contents that can save and make you money.

Why the repeal matters

Since 1969, the Business Rent Tax (BRT) made Florida the lone state taxing commercial rent. Even after the 2024 rate trim, tenants paid an extra 3–3.5 percent on most leases. A company shelling out $10,000 monthly rent forked over $2,400–$4,200 a year for the privilege.

Come October 1, 2025, that bite disappears. State economists expect annual revenue reductions of $904.8 million (state) and $623 million (local). Independent analysts forecast $19.7 billion in economic activity and 58,000 new jobs over five years. Nice tailwind.

That’s the macro view. Here’s how to make the repeal work for you.

Action plan for tenants

1. Scrutinize your leases. Flag any provision calling for “applicable sales tax” or naming the BRT. Starting with October 2025 rent, those clauses die. Make sure invoices reflect the change—push back if they don’t.

2. Update your books. Remove the 3–3.5 percent add-on from payment software. A $5,000 lease drops from $5,150 to $5,000, saving $1,800–$2,100 a year—cash you can redirect to marketing, hiring, or debt reduction.

3. Negotiate smarter renewals. Signing a new lease before October 1? Add language confirming no sales tax after the repeal date and that any future tax is a landlord pass-through.

Action plan for landlords

1. Purge the tax from systems. Billing templates, lease-administration software, and A/R settings must drop the BRT after September 30, 2025—even if rent is prepaid.

2. Revise form leases. Revise outdated tax clauses in your lease template.

3. Watch for the DOR website for guidance. The Florida Department of Revenue (DOR) will publish implementation rules before September 30, 2025.

Other HB 7031 breaks worth bookmarking

1. Permanent Back-to-School Sales-Tax Holiday

When: August 1–31 every year
Exempt items:
• Clothing/footwear ≤ $100
• School supplies ≤ $50
• Learning aids & puzzles ≤ $30
• Personal computers & accessories ≤ $1,500
Retailers: lay in inventory early and market the month-long window.

2. Hunting, Fishing & Camping Holiday (Sept 8–Dec 31, 2025)

Tax-free tents, lanterns, rods, ammo, and more—ideal for sporting-goods shops eyeing Q4.

3. Permanent Disaster-Preparedness Exemptions (effective July 1, 2025)

Batteries, tarps, generators, smoke detectors—plus life jackets, bicycle helmets, coolers, flashlights, sunscreen, and insect repellent are now forever sales-tax-free. Update your POS and spread the word.

4. Bullion break gets bigger

Gold, silver, and platinum bullion sales are tax-exempt regardless of price. The old $500 threshold is history. Dealers: promote small-ticket options to broaden your customer base.

Quick compliance checklist

✔ Calendar reminders. Mark October 1 on finance, leasing, and A/R calendars so no one invoices tax the day after.

✔ Tenant notices. Send a memo explaining the repeal and effective date—keep the receipt for audit trails.

✔ DOR account review. If BTR is your only taxable activity, plan to close the sales-tax account once final returns are filed.

✔ Audit file. Keep copies of invoices showing tax removed; they prove prompt compliance if the DOR comes calling.

✔ Cash-flow forecast. Re-run projections without the tax drag—new clarity may unlock additional savings or growth.

Strategic takeaways

Eliminating the BRT isn’t just an accounting tweak; it’s a structural cost cut. Tenants should adjust budgets, revisit leases, and plan growth. Landlords should modernize systems, sharpen lease language, and capitalize on fresh demand. Retailers stand to benefit from HB 7031’s permanent holidays and exemptions.

Warren Buffett often reminds shareholders that “price is what you pay; value is what you get.” Eliminating BRT should improve both.

For personalized guidance, consult a qualified tax pro or real-estate attorney. 

Then keep an eye on The Co. Letter—we will provide updates as we find them.

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