Florida Sales Tax Rate Reduced on Leases of Real Property

The Florida state sales tax rate on rentals, leases, or licenses to use real property is scheduled to decrease to 2% (from 4.5%) on June 1, 2024. This year’s tax rates reduction follows a reduction in December 2023 that reduced the rate from 5.5% to 4.5%.

The tax on rentals, leases, or licenses to use real property generally applies to commercial office space, warehouses, and self-storage units. The rate reduction does not apply to storage of motor vehicles, boats, or aircraft.

The sales tax rate is based on when the occupant is entitled to occupy the property, not necessarily when the rent is paid.

• Rental charges paid on or after June 1, 2024 for rental periods December 1, 2023 through May 31, 2024 are subject to the 4.5% state sales tax plus any applicable discretionary sales surtax.
• Rental payments made prior to June 1, 2024 that entitle the tenant to occupy the real property on or after June 1, 2024 are subject to 2% state sales tax plus discretionary sales surtax.

The Tax Information Publication No: 24A01-02 issued by the Florida Department of Revenue can be viewed here.

If you have questions on Florida’s tax rate change or other SALT matters, please contact HBK’s SALT Advisory Group at hbksalt@hbkcpa.com.