On June 30, 2025, Governor Ron DeSantis signed Florida House Bill 7031, which among other tax changes, repeals Section 212.031, Florida Statutes, effective October 1, 2025. This means that as of that date, landlords will no longer charge — and tenants will no longer pay — sales tax (the state Business Rent Tax) and local discretionary surtaxes on commercial real property leases. Here’s what that means, how it works, and how landlords benefit, plus what to watch out for during the transition.
What Was Repealed, and What Remains
What’s getting repealed: The tax on rent, lease, or license fees for use of real property under F.S. 212.031, commonly called the Business Rent Tax (BRT) or commercial lease tax. Starting October 1, 2025, this tax (and any county or local surtax tied to it) no longer applies to commercial leases.
What stays taxable: Not all rent or storage or leasing goes tax‑free after October 1. The repeal does not affect Section 212.03, which continues to tax certain rental activities, including short‑term residential rentals (under six months), parking/vehicle storage, boat slips, marinas, and aircraft hangars.
Key Rules & Timing: What Counts as “Before” vs. “After”
- Effective date: October 1, 2025. For occupancy/use beginning on or after this date, no tax applies.
- Rent covering pre‑October 1 periods remains taxable, even if paid later.
- Local surtaxes tied to the Business Rent Tax are removed with the state portion.
How Landlords Benefit
- Lower administrative burden. No more tracking, collecting, or remitting the tax for eligible leases.
- More predictable lease costs for tenants. Landlords can use this as a competitive advantage.
- Simpler lease negotiations. Fewer disputes over taxable items and surtaxes.
- Savings for tenants on amounts passed through. Commercial rent invoices will no longer carry tax.
- Reduced compliance risks. Fewer opportunities for audit issues once the tax is gone.
What Landlords Should Do Now (Before and After Oct 1, 2025)
- Review existing lease agreements for provisions referencing the Business Rent Tax and adjust for renewals.
- Update billing/accounting systems so invoices for periods starting October 1, 2025, do not include sales tax.
- Collect and remit tax properly on payments covering pre‑October 1 occupancy.
- Communicate with tenants to avoid confusion about charges.
- Maintain good records for audit purposes (DOR can audit up to three years back).
Risks, Caveats, and Questions
- The repeal is narrow — other taxable rentals under F.S. 212.03 remain.
- Prepaid rent covering pre‑October 1 periods is still taxable.
- Leases spanning the effective date should be carefully drafted to separate taxable vs. non‑taxable periods.
Conclusion
HB 7031 represents a major shift for Florida commercial real estate. The repeal of F.S. 212.031 as of October 1, 2025, removes the Business Rent Tax and related surtaxes for commercial leases. For landlords, this means lower administrative complexity, reduced compliance burdens, and a competitive advantage. The transition requires careful planning — review leases, update billing, and communicate with tenants to ensure a smooth changeover.