Cut in Florida lease tax could come sooner than expected
TALLAHASSEE - A reduction in a state tax on commercial leases could begin earlier than anticipated this summer.
The timing of the reduction is tied to replenishing the state's Unemployment Compensation Trust Fund, which was depleted during the COVID-19 pandemic.
A report posted Tuesday by the Legislature's Office of Economic & Demographic Research showed that the unemployment fund is expected to be replenished to its pre-pandemic benchmark of $4 billion in March, earlier than expected. That would trigger the reduction in the commercial lease tax to take effect in June. The reduction had been expected to begin in August, a couple of months after the trust fund was restored.
"What does this mean for Florida businesses? A substantial reduction in the business rent tax from 4.5 percent to 2.0 percent, effective June 2024 --- two months ahead of schedule," the Tallahassee-based Florida TaxWatch said in a news release Wednesday. "This change will result in approximately $1 billion in annual savings for taxpayers!"
A 2021 legislative deal tied together a reduction in the lease tax with a plan to require out-of-state retailers to collect sales taxes on purchases made by Floridians. As an interim step during the 2023 session, lawmakers reduced the lease tax from 5.5 percent to 4.5 percent on July 1, the start of the current fiscal year.
The reduction was projected to save $219.3 million. The state has imposed the tax since 1969, and business lobbying groups have long sought to whittle the rate.