Understanding the sales tax on rent in Florida is more than a legal formality—it’s a critical part of managing real estate, whether you’re a landlord leasing commercial space or a tenant negotiating terms. Florida stands out as one of the few states that taxes commercial rent, and with new changes taking effect from June 1, 2024, the state tax rate has dropped to 2%, creating both opportunities and obligations.
In this guide, we’ll break down what this means for you, what to watch out for, and how to stay compliant—without getting buried in red tape or audit risk.
Understanding Florida’s Rental Sales Tax
Understanding the nuances of Florida’s rental sales tax is essential for both landlords and tenants. The state imposes specific tax rates on various rental scenarios, and recent legislative changes have adjusted these rates.
Commercial Rentals
In Florida, the rental, lease, or license to use commercial real property is subject to a state sales tax. Effective June 1, 2024, this rate was reduced from 4.5% to 2.0%. This tax applies to properties such as:
- Office spaces
- Retail stores
- Warehouses
- Self-storage units
It’s important to note that this reduction does not affect the discretionary sales surtax imposed by individual counties, which can range from 0.5% to 2.5%, depending on the county. For instance, as of 2025, Broward County imposes a 1.0% surtax, while Hillsborough County’s surtax is 2.5%.
Residential Rentals
Long-Term Leases (Over Six Months):
Residential rentals with a duration exceeding six months are generally exempt from state sales tax. This exemption is designed to encourage long-term housing stability.
Short-Term Rentals (Six Months or Less):
Short-term residential rentals, often referred to as “transient rentals,” are subject to a 6% state sales tax. Additionally, these rentals may be subject to:
- Discretionary Sales Surtax: Varies by county.
- Tourist Development Taxes: Imposed by some counties to fund tourism-related activities.
Examples of transient rentals include:
- Hotel and motel rooms
- Vacation homes
- Condominium units rented for short durations
- Campground sites
Landlords offering short-term rentals must register with the Florida Department of Revenue to collect and remit these taxes. Failure to comply can result in penalties and interest charges.
Understanding these distinctions is crucial for compliance and financial planning. Both landlords and tenants should be aware of their obligations and rights concerning rental sales tax in Florida.
Local Discretionary Sales Surtax
In Florida, counties have the authority to impose a Local Discretionary Sales Surtax in addition to the state’s base sales tax. These surtaxes are typically levied to fund specific local initiatives, such as infrastructure projects, education, or emergency services. The surtax rates vary by county and are applied to transactions that are already subject to the state sales tax. For rentals, this means that the surtax is added on top of the applicable state tax, affecting the total amount tenants pay.
Variations:
The surtax rates across Florida’s counties range from 0.5% to 1.5%. For instance:
- Miami-Dade County: 1.0%
- Hillsborough County: 1.5%
- Orange County: 0.5%
These rates are subject to change, and it’s important for landlords and tenants to stay updated on the current rates in their respective counties. The Florida Department of Revenue provides an annual publication detailing the surtax rates for each county.
Calculation:
To determine the total tax on rent, combine the state sales tax rate with the county’s discretionary surtax rate. For example, if the state sales tax is 6% and the county surtax is 1%, the total tax rate would be 7%. This combined rate is then applied to the taxable rent amount.
Example Calculation:
Suppose a commercial property in Miami-Dade County has a monthly rent of $5,000. With a state tax rate of 6% and a county surtax of 1%, the total tax rate is 7%.
- State Tax: $5,000 × 6% = $300
- County Surtax: $5,000 × 1% = $50
- Total Tax: $300 + $50 = $350
Therefore, the tenant would pay a total of $5,350 for that month.
It’s crucial for both landlords and tenants to be aware of these taxes to ensure compliance and accurate financial planning.
Responsibilities of Landlords
Navigating Florida’s rental sales tax landscape requires landlords to adhere to specific obligations to ensure compliance and avoid potential penalties.
Registration
Landlords leasing taxable real property in Florida must register with the Florida Department of Revenue before commencing rental activities. This registration is accomplished by completing the Florida Business Tax Application (Form DR-1). Upon approval, landlords receive a Certificate of Registration (Form DR-11) and a Florida Annual Resale Certificate for Sales Tax (Form DR-13), which must be displayed prominently at the business location.
Collection and Remittance
Landlords are responsible for collecting the appropriate state sales tax and any applicable local discretionary sales surtax from tenants at the time rent is received. The collected taxes must be remitted to the Department of Revenue by the 20th day of the month following the reporting period. Timely remittance is crucial to maintain compliance.
Record-Keeping
Maintaining accurate records is essential. Landlords should keep detailed documentation of:
- Rental agreements
- Amounts of rent collected
- Sales tax collected
- Dates of transactions
- Copies of filed tax returns
These records should be retained for a minimum of three years and made available for inspection upon request by the Department.
Penalties
Failure to comply with sales tax obligations can result in significant consequences, including:
- Late Payment Penalties: A penalty of 10% of the amount due, with a minimum of $50, may be assessed for late payments.
- Interest Charges: Interest accrues on any unpaid tax from the due date until the tax is paid in full.
- Legal Action: Continued non-compliance may lead to liens, garnishments, or other legal actions to recover owed taxes.
By understanding and fulfilling these responsibilities, landlords can ensure compliance with Florida’s sales tax laws and avoid unnecessary penalties.
Implications for Tenants
While landlords are responsible for collecting and remitting sales tax on commercial rentals, tenants should understand how these taxes impact their lease agreements and financial obligations.
Understanding Tax Charges
In Florida, sales tax on commercial rent is typically added on top of the base rent. Lease agreements should clearly specify:
- The amount of base rent.
- The applicable state and local sales tax rates.
- Whether taxes are included in the quoted rent or charged separately.
For example, a lease stating $10,000/month in rent would incur an additional 2% state sales tax, plus any applicable discretionary surtax based on the property’s county.
Verification and Compliance
Tenants should verify that:
- The landlord is registered with the Florida Department of Revenue to collect sales tax.
- The tax amount charged matches the correct combined rate (state + local).
- They receive invoices or receipts showing tax as a separate line item.
You can confirm a landlord’s registration using Florida’s tax certificate verification tool.
Audit Risks
If taxes are miscalculated or not remitted by the landlord, both parties could face audit scrutiny. Tenants should retain copies of all lease documents and payment records in case of review. Under Florida law, a failure to document tax payments can lead to assessments or back taxes owed.
Being proactive about tax transparency helps tenants avoid surprises during audits or lease disputes.
Exemptions and Special Cases
While Florida generally imposes sales tax on commercial real property rentals, certain exemptions and special cases apply. Understanding these can help landlords and tenants navigate their tax obligations more effectively.
Exemptions
- Rentals to Governmental Entities or Nonprofit Organizations
Rentals to federal, state, county, or city government agencies are exempt from sales tax. Additionally, nonprofit organizations that have obtained a Florida Consumer’s Certificate of Exemption (Form DR-14) can lease commercial property tax-free, provided the rental is paid directly by the organization using its funds.
- Agricultural Property Rentals
Rentals of real property assessed as agricultural are exempt from sales tax. This exemption supports the agricultural sector by reducing the tax burden on properties used for farming and related activities.
Special Cases
- Subleases
When a tenant subleases a portion of the leased property, they must collect sales tax on the sublease rent. However, they can claim a prorated credit for the sales tax paid to their landlord on the portion subleased. If the tenant subleases the entire property or retains only an incidental portion, they may provide a resale certificate to the landlord to lease the property tax-exempt and then collect and remit sales tax on the subleased property.
- Related-Party Rentals
Leases between related parties, such as between a parent company and its subsidiary or between an individual and their single-member LLC, are generally not exempt from sales tax. These transactions are treated like any other commercial lease and are subject to the same tax obligations.
Understanding these exemptions and special cases is crucial for compliance with Florida’s sales tax laws on rental properties. Both landlords and tenants should consult with tax professionals or legal advisors to ensure they are meeting their obligations and taking advantage of any applicable exemptions.
Compliance and Best Practices
Navigating Florida’s rental sales tax requirements demands more than just knowing the rates—it requires consistent compliance, accurate filings, and strategic oversight. Landlords and property managers who prioritize these best practices can reduce audit risk and avoid costly penalties.
Timely Filing
Landlords collecting sales tax on rental income must file returns and remit payments on time to the Florida Department of Revenue (DOR). Filing frequency—monthly, quarterly, or annually—is assigned based on the amount of tax collected. Missing deadlines can lead to penalties and interest.
Professional Assistance
Sales tax on rentals involves many moving parts—state vs. local tax rates, exemptions, subleases, and changing rules. If you manage multiple properties or deal with complex lease structures, consulting tax professionals or compliance experts like Hands Off Sales Tax (HOST) can ensure peace of mind. HOST offers end-to-end services—from registration to filing—freeing you to focus on your real estate business without tax headaches.
Streamlining Rental Tax Compliance with HOST
Sales tax on rent in Florida isn’t just another line item—it’s a legal obligation that affects how landlords structure leases, collect payments, and manage filings. From fluctuating local surtaxes to updated state rates, staying compliant can feel like a full-time job. That’s where Hands Off Sales Tax (HOST) becomes your behind-the-scenes ally.
A Full-Service Sales Tax Partner
HOST specializes in managing sales tax compliance for landlords, commercial property managers, and short-term rental operators. Their team handles:
- Sales Tax Registration: HOST registers your business with the Florida Department of Revenue and applicable local jurisdictions.
- Tax Collection Support: They help structure your lease terms to properly reflect tax obligations—whether you charge rent plus tax or build it into the total.
- Filing & Remittance: HOST ensures timely, accurate filings and remits tax on your behalf, so you never miss a deadline.
- Audit Protection: If you’re flagged for an audit, HOST provides representation, record prep, and support throughout the process.
Whether you’re leasing commercial office space or managing short-term rentals, HOST ensures your tax compliance is seamless, accurate, and off your plate—so you can focus on growing your real estate business, not interpreting tax codes.
Final Word: Clarity and Confidence in Florida Rental Tax
Understanding sales tax on rent in Florida is essential for protecting both your bottom line and legal standing. From the latest rate reductions to complex exemptions and local surtaxes, every detail matters. For landlords, tenants, and property managers alike, staying informed isn’t optional—it’s critical.
If the rules feel overwhelming, you’re not alone. Hands Off Sales Tax (HOST) offers a complete, expert-led compliance service tailored to Florida’s rental tax landscape. From registration to filings and audits, HOST handles it all. Reach out today for a consultation and put your tax worries behind you.
