The Florida commercial lease tax rate is set to drop from 5.7% to 5.5%, the third reduction in three years.
State lawmakers approved the move, and Gov. Ron DeSantis is expected to sign the bill. It would take effect on Jan. 1, 2020.
Florida is the only state that has a business rent tax connected to commercial real estate leases. The tax can cost businesses thousands of dollars each year, and that's on top of the actual rent paid and fees landlords charge for maintaining common areas.
Commercial real estate groups and property owners have urged the state to do away with the tax in an effort to stimulate the state economy and make Florida a more attractive place for big companies to settle.
"This tax makes Florida's development and commercial real estate sector less competitive," said the state president of the National Association of Industrial and Office Parks this year. "It zaps money that businesses could otherwise invest in growth and job creation."
The Florida tax was 6 percent in 2017, but the Legislature reduced it in that session as other states eliminated lease taxes.
The lease tax is just one part of a commercial lease, and the one part landlords can't negotiate. But the rest of a commercial lease is negotiable, from the monthly rent to building maintenance to amenities to necessary refurbishments. An attorney should review all commercial leases before prospective tenants sign on to make sure their best interests are protected. Otherwise, mistakes could be costly and adversely affect a company's bottom line.