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- Published: 20 Jan 2021
It is critical that commercial real estate owners in the state recognize the applicable sales tax rate is based on the timing of when a tenant occupies or has a right to occupy the property and not the month or year in which the tenant pays the rent. The local option surtax varies between 0.5% to 1% for those counties that impose it. Therefore, if you live in Pasco County, your sales tax rate remains 7%. Posted: (2 days ago) Florida is the only state in the nation that subjects commercial rent to sales tax, which puts Florida at a competitive disadvantage when trying to get major businesses to locate in Florida. Check to activate the menu and then navigate with tab key, Florida Commercial Lease Sales Tax Rate Further Reduced, Open our Trip Advisor Page in a new window. three years. This will be the third such reduction in the last
These types of structures need to be especially mindful of the sales tax rules because, even though the two businesses have the same owner, sales tax is still due on any rental payments (or payments construed as rent) made from the business to the real estate holding company. In addition, it is the responsibility of the property owner to collect from tenants any county-imposed local-option sales surtax on the total rent charged. Miami, Florida 33131-5351. The step, however, is a small one with a reduction only going from 6% to 5.8% at … at the new reduced sales tax rate of 5.5%. If the rental consideration is paid in advance for January 2020, for example, the lower rate applies; however, rent paid on or after January 1, 2020 for prior periods is subject to the higher tax rate. would only owe $60/month in sales tax, which would result in savings of $41,040 for a 36 month audit period. This will be the third such reduction in the last three years. This new state sales tax rate, however, does not impact county surtax rates. Florida state sales tax at the rate of 5.5%, plus any applicable discretionary sales surtax, is due on the total rent charged for renting, leasing, or granting a license to use commercial real property in Florida, unless the rent is specifically exempt. by Melissa Fleitas, CPA, It’s Time for Business to Begin Tax Reporting for 2020 by Lewis Taub, CPA. Pass-through charges that are … such amounts are prepaid prior to that time. Effective
Florida is currently the only state in the country where residents are required to pay sales tax when renting a commercial property. Florida has a 6% sales tax and Pasco County collects an additional 1%, so the minimum sales tax rate in Pasco County is 7% (not including any city or special district taxes). are subject to Florida’s 6.0% sale tax, which is not impacted by this rate
For example a Florida commercial
Commercial landlords and management
She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com. Martinez. Real property rentals subject to the reduced rate include commercial office space, retail, warehouses and certain self-storage units, excluding storage for motor vehicles, boats and aircraft. property and certain services provided by commercial landlords to their tenants
reduction. About the Author: Karen A. Florida is reducing the state-level sales tax rate on commercial leases for occupancy periods beginning on or after January 1, 2020 down to 5.5%. All Rights Reserved, Process Improvement Audits and Consulting, Foreign Corrupt Practices Act (FCPA) Investigations, Forensic Accounting and Litigation Support, Real Estate Investment Trust (REIT) Accounting, Construction and Development of Real Estate, Infrastructure and Heavy Equipment Projects, Financial Institutions and Banking Practice, Healthcare, Hospitals and Physician Practices, High-Net-Worth Families, Entrepreneurs and Business Owners, Real Estate Investment, Development and Management, Explore Career Opportunities – Experienced Professionals, Explore Career Opportunities – Students and Recent Graduates, How to Apply for Loans Under the Revived Paycheck Protection Program by Andrew Leonard, CPA, Which COVID-19-Related Payroll Tax Credit Is My Business Eligible to Receive? 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