The tax bill signed into law by Florida Gov. Ronald DeSantis includes a slight reduction on the sales tax rate for commercial leases, but the bill is more notable for what it did not include—a law that would have required online retailers and marketplace sellers to collect tax on sales to Florida residents, even if the seller does not have a physical presence in Florida.

Reduction in Commercial Lease Rate

Florida is one of only two states that impose sales tax on commercial leases (Arizona, which allows local governments to impose a similar tax, being the second; New York City imposes a commercial rent tax on leases in portions of Manhattan that operates in a similar manner). The reason for taxing the lease of real property is simple—since Florida does not have a personal income tax or impose its corporate tax on pass-through entities (like S corporations or LLCs), the state simply needs to widen the net of its sales tax to raise the revenue necessary to balance the budget.

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