The Florida Sales Tax Repeal

As of October 1, 2025, Florida repealed the 2.0% state sales tax on commercial real property leases under House Bill 7031. This landmark change creates a massive opportunity for capital recovery — but it also introduces significant risk for organizations with high-volume lease portfolios.

The Technical Challenge: The Regulatory Vacuum

For over 50 years, Florida was the only state to tax commercial rent. Many landlord accounting systems lack the agility to cleanse ledgers of these taxes for periods starting after the October 1st deadline.

• Tenants with Triple Net (NNN) leases are at risk of accidental tax inclusions in their 2025–2026 reconciliations

• Organizations using legacy lease accounting software or ERPs must manually update tax logic across thousands of locations to prevent systemic overpayment.

How "Ghost Taxes" Hide in NNN Lease Structures

In a Triple Net (NNN) lease structure, tenants are responsible for their pro-rata share of Operating Expenses, including Property Taxes, Insurance, and Common Area Maintenance (CAM) in addition to their Base Rent. These expenses are typically bundled as Additional Rent.

Because Florida's commercial rent tax historically applied to Total Rent (Base + Additional), it was charged on the entire bundle of operating expenses. Many landlords collect these expenses as monthly estimates and reconcile them annually.

Here's where the problem emerges:

If a landlord's accounting system was not manually updated to stop the 2.0% tax collection on October 1, 2025, the tax will remain hidden within the estimated operating expense payments for the remainder of the year. Without forensic verification at the lease-to-ledger level, these "ghost taxes" compound silently, appearing in every monthly invoice but never flagged as erroneous.

The Scale of the Opportunity

For Florida tenants and small business owners, the elimination of the state sales tax on commercial leases represents a critical opportunity for immediate capital recovery.

At the individual level:

The sunsetting of the 2.0% state tax (plus applicable local surtaxes, which can reach up to 2.5% in some counties) translates to savings of $2,400 to $5,400 annually for a standard $10,000/month lease, depending on location.

At the portfolio level:

For large corporations managing hundreds of locations, the risk lies in cumulative leakage — where millions of dollars are lost simply because tax logic is not analyzed at the actual legal reality of the lease.

Given that small businesses account for 99.8% of Florida firms, ensuring this capital remains with the business owner rather than being lost to accounting errors is vital for domestic economic health and operational sustainability.

The Insurance + Tax Squeeze

Florida businesses face a triple threat: elevated insurance premiums, rising property assessments, and the technical burden of ASC 842 compliance.

While insurance rates and property taxes are largely uncontrollable, lease accuracy is a controllable expense. Forensic verification ensures that the tax repeal translates into actual capital recovery — not just a theoretical savings that never materializes on the balance sheet.

The question for Florida tenants is not whether the tax was repealed. The question is: Are you actually getting the savings, or are ghost taxes still hiding in your invoices?