Starting October 1, 2025, Florida will officially repeal the state sales tax on commercial rent. This change affects property owners, landlords, and tenants leasing office, retail, warehouse, or self-storage space. If handled correctly, the repeal can lead to cost savings, simplified accounting, and a smoother leasing experience.
Unfortunately, many business owners misunderstand how the repeal applies and end up overpaying, misfiling, or missing refund opportunities altogether.
Why So Many Landlords and Tenants Get It Wrong
Even with clear announcements from the Department of Revenue, confusion still surrounds this repeal. The most common issues include:
- Confusing the date rent is paid with the date it applies to
- Continuing to charge or pay tax on rent after October 1, 2025
- Failing to file required returns even when no tax is due
- Missing refunds for tax paid too early
- Assuming their sales tax account will be closed automatically
The good news is, once you understand the timeline and filing requirements, you can handle this transition with confidence.
Understand the Cutoff—October 1, 2025
This is the key date. Florida’s repeal of sales tax on commercial rentals only applies to rental periods beginning on or after October 1, 2025.
Here’s how it breaks down:
- Rent paid in September 2025 for October occupancy is not taxable
- Rent paid in October 2025 for September occupancy is taxable
If rent is pre-paid for future periods, what matters is when the occupancy period begins, not the payment date.
Example: If a tenant pays October rent in advance on September 15, no sales tax is due. But if they pay overdue September rent on October 3, sales tax must still be collected and reported.
Don’t Assume Filing Requirements End with the Tax
Just because the tax is going away doesn’t mean your filing obligations disappear. You must still file a return for each reporting period that covers rental activity through September 30, 2025—even if no tax is due for that period.
Filing periods:
- Monthly filers: Must submit returns for July, August, and September 2025
- Quarterly filers: Must file for Q3 2025 (July–September)
- Semiannual and Annual filers: Must report rent activity through September 30, 2025
If your tax account is used only for commercial rent, the Florida Department of Revenue will automatically update your account after your final return is received. However, if you receive late payments for rental periods prior to October 1, 2025, you still need to report and remit the applicable tax.
Handle Refunds the Right Way
If you collected or paid sales tax on rent for periods after October 1, 2025, you may be eligible for a refund. But to request a refund from the state, you must first refund your tenant.
Here’s the process:
- Refund the sales tax to your tenant
- File Form DR-26S with the Florida Department of Revenue
- Include documentation proving the refund was issued
For example, if a salon tenant paid sales tax in June 2025 for October through December rent, the landlord should refund the tax and then apply for reimbursement through the Department’s refund portal.
Final Thoughts
The repeal of Florida’s commercial rent tax marks a significant shift in the state’s business environment. For landlords and tenants, the opportunity lies in understanding the timing, handling compliance correctly, and adjusting accounting practices accordingly.
Need help navigating this tax transition? At Aligned CPA, we guide Florida business owners, landlords, and property managers through complex tax updates like this one. Whether you’re managing multi-unit leases or solo office spaces, our expert team ensures you’re compliant, optimized, and never overpaying.
Contact us today to schedule a consultation and prepare for the October 1st repeal with confidence.
Joy Lutz, CPA, CTP
I help our client’s keep more money in their pockets by implementing proactive tax strategies.
I promise you, working with a CPA and Certified Tax Planner can be much more exciting than crunching numbers and reviewing last year’s taxes.