DeSantis signs bill cutting commercial rent tax by $1B
The new law levels the playing field for brick-and-mortar retailers while offsetting the expansion of the sales tax with a cut in the commercial rent tax.
Florida is the only state in the nation to charge small business owners a tax for the privilege of renting a storefront
But that unfair burden will be slashed by more than half following a bill signing by Gov. Ron DeSantis April 19.
House Bill 15, co-sponsored by state Reps. Chuck Clemons, R-Cross City, and Chip LaMarca, R-Lighthouse Point, requires online retailers that sell in the state to collect the same 6% state sales tax brick-and-mortar stores are required to collect. The sales tax expansion is expected to bring in $421 million in year one and $612 million per year after that – totaling over $1 billion in new revenues.
But an amendment to HB 15 made the plan revenue-neutral by slashing commercial rent taxes to 2% from 5.5%. The commercial rent tax cut is estimated at around $1 billion, offsetting new revenues from the sales tax.
Stand Up Florida collected nearly 2,000 petition signatures in favor of repealing the rent tax entirely.
Revenue from the measure will first go to replenish the Unemployment Compensation Trust Fund, preventing a tax hike on businesses. Following last year’s shock to the unemployment system, the fund was depleted, and unemployment taxes on employees increased from $7 per worker last year to $49 in 2021.
Once the fund is replenished to $4 billion, the new law calls for the commercial rent tax to be cut.
“Gov. DeSantis’ signature reiterates his commitment to relaunching Florida’s economy and helping Florida job creators recover from a once in a century pandemic,” Florida Chamber of Commerce President and CEO Mark Wilson said.
Throughout the pandemic, Florida residents have turned to online retailers for shopping and delivery to meet their needs – purchases that did not collect sales tax, unlike brick-and-mortar stores.
Florida League of Cities President Tony Ortiz also praised the signed bill, saying, “No longer will out-of-state retailers, who don’t contribute anything to the betterment of our communities, have an unfair advantage over our local businesses who are not only part of our local communities but who have a vested interest in them and their success.”
The new law is a victory for tax fairness and business owners. Brick-and-mortar and online retailers will finally be treated equally, while the burden business owners feel under Florida’s unique commercial rent tax is lessened.