News Summary
Florida has announced the elimination of the business rent tax, which will take effect on October 1, 2025. This significant change aims to save businesses over $1 billion annually, enabling them to invest in growth and jobs. The removal of the tax comes as part of a broader tax reduction package approved by the state legislature, which also introduces various other tax exemptions intended to alleviate the tax burden on residents and support small businesses. This legislative effort reflects ongoing discussions about the economic landscape in Florida.
Florida has announced that starting October 1, 2025, businesses will no longer be required to pay the state sales tax on commercial leases, effectively eliminating the business rent tax after more than 50 years in place. This significant legislative change is expected to save Florida companies over $1 billion annually, allowing them to reinvest that savings into jobs, equipment, and customer services.
The decision to phase out the business rent tax was part of a broader tax package approved by the GOP-led Legislature during the summer session of 2025. The approval followed an unusually lengthy budget negotiation process, which lasted over six weeks past the scheduled end of the legislative session, reflecting extensive discussions among lawmaking members.
The final budget for the 2025-26 fiscal year is set at $115.1 billion, $3.5 billion smaller than the previous year’s budget, and half a billion less than Governor Ron DeSantis’ original proposal. Approximately 70% of the tax reduction initiative is allocated to the permanent elimination of the business rent tax, leading to a projected decrease in state revenue by $904.8 million.
In addition to abolishing the business rent tax, the tax package introduces several other tax exemptions including the full repeal of the aviation fuel tax, a 2% reduction in cardroom taxes, and sales tax exemptions on NASCAR Championship Race tickets. Other noteworthy exemptions include recurring sales tax relief for back-to-school items during August, hurricane preparedness supplies year-round, and state park admissions, all aimed at lessening the tax burden on Florida residents.
Legislators assert that the elimination of the business rent tax will particularly benefit small businesses and local entrepreneurs, often referred to as “mom and pop” shops. However, the tax package faced opposition from some members of the Democratic Party, with seven legislators in the House and two in the Senate voting against it. These dissenters raised concerns about the potential negative impact on local government revenue and argued that the major benefits of the tax cuts favored businesses over individual residents.
In response to concerns about future economic challenges, lawmakers are planning to allocate $1.5 billion into the Budget Stabilization Fund over the next two fiscal years. Additionally, the budget provides for a 2% raise for state employees, with a minimum increase of $1,000 per worker—an acknowledgment of the importance of maintaining a motivated workforce.
Funding for K-12 education has received a substantial commitment, totaling $34.6 billion, which heavily depends on local property taxes. The budget also outlines an allocation of $11.7 billion for higher education, with a commitment to keep college tuition rates unchanged. Additionally, an extra $101.6 million is set aside for teacher salary increases across the state, addressing previous deficiencies in educator compensation.
As the implications of this tax package unfold, it remains to be seen how businesses will utilize the savings generated from the elimination of the business rent tax. The collective aim is to enhance Florida’s economic landscape, fostering growth while navigating the challenges posed by potential economic downturns in the future. The legislative moves signify a commitment to maintaining a business-friendly environment in the Sunshine State.
Deeper Dive: News & Info About This Topic
- WFTV
- Wikipedia: Business Tax
- Florida Phoenix
- Google Search: Florida business rent tax
- Miami Herald
- Google Scholar: Florida tax policy
- Buildings
- Encyclopedia Britannica: Tax Reform
- Florida Politics
- Google News: Florida commercial lease tax
Author: STAFF HERE ORLANDO WRITER
ORLANDO STAFF WRITER The ORLANDO STAFF WRITER represents the experienced team at HEREOrlando.com, your go-to source for actionable local news and information in Orlando, Orange County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Orlando International Fringe Theatre Festival, Megacon Orlando, and Central Florida Fair. Our coverage extends to key organizations like the Orlando Economic Partnership and Hispanic Chamber of Commerce Metro Orlando, plus leading businesses in leisure and hospitality that power the local economy such as Walt Disney World Resort, AdventHealth, and Universal Orlando. As part of the broader HERE network, including HEREJacksonville.com, HEREPetersburg.com, HERETallahassee.com, and HERETampa.com, we provide comprehensive, credible insights into Florida's dynamic landscape.
