Understanding the impact of HB 7031 starting October 1, 2025
Florida Repeals Commercial Lease Tax: A Historic Change
On October 1, 2025, Florida officially eliminated the 4.5% state sales tax on commercial lease payments through HB 7031, signed by Governor Ron DeSantis earlier this year.
This marks a significant milestone for business owners, landlords, and investors, as Florida was the only U.S. state with such a tax.
What Does the Law Cover?
- Applies to office, retail, industrial, and warehouse leases
- State tax removed – but local county surtaxes may still apply
- Effective for new and existing leases starting October 1, 2025
Why It Matters
For tenants:
- Direct reduction in monthly lease costs
- More room for business expansion and operational savings
For landlords:
- Easier tenant retention and attraction
- Increased competitiveness in lease negotiations
For investors:
- Enhanced property demand
- Stronger ROI as leasing becomes more attractive
Action Steps for Tenants & Landlords
✅ Review current leases with your attorney or broker
✅ Check if local surtax still applies in your county
✅ Renegotiate or restructure leases if appropriate
✅ Factor savings into future CRE investment decisions
