Sales Tax Decrease on Commercial Property

Tax Rate on Commercial Property

Commercial real property is property that is used for business purposes and that is owned to produce income (spaces for offices, retail, etc.). Florida imposes a state sales tax on the lease of such property. Since 2018, the sales tax on commercial rent in Florida has consistently gone down, decreasing from 6% to 5.7% to 5.5% in 2020. The new state tax rate on leases of commercial real property has become effective in Florida on January 1, 2020. The tax rate has marked a decrease from 5.7% to 5.5%.

What is a Surtax Rate?

A surtax is a tax added on top of another tax. Most of Florida’s counties charge their own surtax on top of the state’s sales tax. New surtax rates usually become effective January 1st of each year and can be found on the website of the Florida Department of Revenue. Expiration dates of these surtax rates vary. Importantly, Florida law requires filing a tax return even if you do not owe any sales tax.

Counties’ Surtax Rates

It is worth noting that counties can impose an additional surtax that might range from 0% to 2.5% on top of the state tax. Some counties do not impose a surtax at all. The new state tax decrease will not impact different counties’ surtax rates. Therefore, when calculating the total tax rate on a commercial property, the sales surtax in each individual county must be taken into account. Currently, Miami-Dade, Broward and Palm Beach Counties’ surtax rate is 1%. The 1% should be added to the new state sales tax (5.5%) to achieve the new total tax rate in these counties.

It is estimated that the tax rate reduction will save around $64.5 million each year. Other parts of the new tax bill include sales tax exemptions for disaster preparedness supplies and tax reductions of license fees for the use of real property, among others.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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