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AI-assisted summary Florida will eliminate its business rent tax, effective October 1, 2025.

The elimination of the tax aims to encourage business development and attract investment in Florida.

Businesses should review their lease agreements and adjust accordingly after the effective date.

On June 30, Gov. Ron DeSantis signed a landmark bill that will ripple through every corner of Florida’s economy including right here in Tallahassee.

Starting Oct. 1, 2025, Florida’s business rent tax will be eliminated, thanks to the passage of HB 7031. For small business owners, commercial landlords, developers, and local entrepreneurs, this change is monumental.

Florida has been the only state in the nation to charge sales tax on commercial leases. This meant that in addition to paying rent, businesses also had to pay a state and local surtax, a cost that added up fast, especially for newer or growing companies. With the repeal now official, we’re correcting that imbalance and signaling that Florida is serious about attracting investment, supporting job creators, and fueling smart economic growth.

What does this mean for Tallahassee?

For starters, it means lower costs for small businesses — the backbone of our community. Whether you’re a young entrepreneur opening your first storefront in Midtown or a tech startup signing your first office lease in Innovation Park, this repeal gives you more financial breathing room. Every dollar no longer spent on rent tax can now go toward hiring, technology upgrades, benefits for employees, or simply building a financial cushion.

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For those just starting out, this makes Florida a more welcoming place to take that leap. In Tallahassee, this pairs well with the repeal of our Business License Tax which was championed by the Greater Tallahassee Chamber of Commerce in 2016. Opening a business is hard enough. Removing unnecessary tax burdens from day one makes that journey a little less steep and a lot more viable.

Landlords and property managers also benefit from simplified operations. No more collecting and remitting sales tax on rent means less time spent navigating bureaucracy and more time focusing on service, retention, and property improvements. For developers, the repeal makes the numbers work better for their potential tenants encouraging more construction, redevelopment, and repositioning of underutilized assets.

Florida projects the repeal will save businesses in the sunshine state $2.5 billion every year. The economic ripple effect is expected to be even more significant with some estimates suggesting up to $6 in economic activity for every $1 saved. In a city like Tallahassee, where state government, education, and healthcare anchor our economy, that kind of growth potential opens real opportunities for local job creation, neighborhood revitalization, and long-term community wealth.

But this isn’t just a technical tax adjustment. It’s a policy shift that says: we want people to start businesses here. We want them to grow here. We want them to stay.

If you’re a tenant in a commercial lease, now is the time to review your agreements, accounts payable and ensure your rent is adjusted accordingly after Oct. 1. Landlords should begin updating lease templates and invoicing systems to reflect the tax change.

This is a meaningful victory for Florida’s business community. Let’s make sure we take full advantage — and build something lasting with it, right here in Tallahassee.

John McNeill is a principal and Commercial Real Estate Advisor at NAI TALCOR, a commercial real estate company headquartered in Tallahassee with offices in Panama City, Florida, Dothan, Alabama, and now Mobile, Alabama. He can be reached at jmcneill@talcor.com

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