Florida Passes New Tax Rate Reductions for Commercial Properties
By Paul Graney, State & Local Tax Leader
John Bonk, Senior Manager, Tax & Business Services
Florida passes House Bill 7087, which includes a reduction of the sales tax rate for commercial rentals, along with other tax changes.
On March 23, 2018, Florida Governor Rick Scott signed House Bill 7087, which will reduce the sales tax rate on commercial rentals an additional 0.1%, to 5.7%, effective January 1, 2019. Florida had previously decreased the rate from 6% to 5.8%, as of January 1, 2018. An important consideration which must be factored into the determination of the applicable sales tax rate are the local surcharges. In Florida, some localities (e.g., Miami-Dade County) apply a sales tax surcharge – generally about 1%. In such circumstances, the 5.7% sales tax rate must be increased to include the local surcharge. For example, in Miami-Dade County, the adjusted sales tax on commercial rent as of January 1, 2019, would be 6.7% (5.7% plus 1%).
This reduction is part of the state’s larger goal of eliminating the sales tax on commercial rental properties. The tax professionals at Marcum will continue to monitor and provide updates on any further reductions.
Additional noteworthy changes in House Bill 7087 include:
- Updating the Florida tax code to conform to the recent Federal income tax changes effective January 1, 2018.
- Sales tax exemptions for generators at nursing homes and assisted living facilities.
- Clarification of sales tax exemptions for aquaculture and recycling.
- Two sales tax holidays, one for back to school and one for disaster preparedness.
- Property tax relief related to tropical storm damage.
- Fuel tax exemptions related to agriculture.
Please contact your dedicated Marcum professional to address any questions regarding this notice or any other tax matter.
