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Published: Aug 20, 2025

Updated: Aug 27, 2025

Florida’s HB 7031: A Game-Changer for Commercial Leases Starting October 2025

By Andrew David Easler, Esq.

Published: Aug 20, 2025

Updated: Aug 27, 2025

On October 1, 2025, Florida’s commercial real estate landscape will undergo a transformative change with the implementation of House Bill (HB) 7031. Signed into law by Governor Ron DeSantis, this legislation eliminates the State Business Rent Tax and County Surtax on commercial leases, positioning Florida as a more attractive hub for businesses.

What is HB 7031?

HB 7031 repeals Section 212.031 of the Florida Statutes, which has imposed a sales tax on commercial lease payments since 1969. Previously, Florida was the only state to levy such a tax, currently at 2%, with additional County Surtaxes ranging from 0.5% to 1.5%. The repeal eliminates these taxes, reducing costs for tenants leasing office, retail, or industrial spaces. However, taxes on motor vehicles, boats, aircraft storage, or short-term residential rentals (under six months) under Section 212.03 remain unaffected.

Economic Benefits for Florida

The elimination of the commercial rent tax is expected to significantly boost Florida’s economy. Lower occupancy costs make the state more competitive, attracting new businesses and encouraging existing ones to expand their operations. Small businesses, often burdened by tight margins, will benefit the most, as reduced rent expenses free up capital for hiring, inventory, or marketing. For example, a small retail shop in Miami-Dade County paying $5,000 monthly rent could save $175-$275 per month (2% state tax plus 0.5%-1.5% county surtax), equating to $2,100-$3,300 annually. This extra cash flow can fuel growth and job creation.

The repeal also enhances Florida’s appeal for startups and entrepreneurs. With lower operational costs, businesses can allocate resources to innovation, technology, or customer experience, fostering a vibrant economic ecosystem. Cities like Miami, Orlando, and Tampa could see increased commercial leasing activity, driving demand for retail and office spaces.

Practical Example: How HB 7031 Impacts a Business

Consider a mid-sized tech firm leasing a 10,000-square-foot office in Broward County. Their monthly rent, including common area maintenance and property taxes, totals $25,000. Under the current tax structure, they pay an additional 2% state tax ($500) and a 1% county surtax ($250), totaling $750 monthly or $9,000 annually. Post-repeal, starting October 1, 2025, this firm will save the entire $9,000 annually, which could fund new equipment, additional staff, or marketing campaigns. This cost reduction enhances their competitiveness and financial stability.

Action Steps for Businesses

For Tenants

  • Review 2025 Reconciliations: Ensure landlords do not charge sales tax on rent for periods after September 30, 2025. Verify that annual reconciliations prorate taxes correctly for the first three quarters of 2025.

  • Update Payment Systems: If you use automatic rent payments, adjust settings to exclude the tax component starting October 2025.

  • Communicate with Landlords: Confirm that your landlord is aware of HB 7031 and will adjust invoicing to reflect the tax repeal.

For Landlords

  • Cease Tax Collection: Stop collecting sales tax on commercial rent for periods after September 30, 2025. Taxes for earlier periods remain due.

  • Update Systems: Modify accounting and invoicing systems to reflect the tax repeal. Ensure 2025 reconciliations prorate taxes for the first nine months.

  • Notify Tenants: Inform tenants of the change and its impact on their payments. Clarify if any lease components (e.g., vehicle storage) remain taxable.

  • Evaluate Lease Portfolio: Identify leases that may still be subject to tax, such as those for short-term rentals or storage, and adjust practices accordingly.

Why This Matters for Small Businesses

Small businesses, from cafes to boutique consultancies, often operate on thin budgets. The tax repeal directly reduces their overhead, allowing them to reinvest savings into growth initiatives. For instance, a family-owned restaurant could use the savings to upgrade equipment or expand its menu, while a startup could hire additional staff to scale operations. This financial relief also levels the playing field, enabling smaller enterprises to compete with larger corporations in Florida’s dynamic market.

Looking Ahead

HB 7031 marks a significant shift, aligning Florida with other states by removing a unique tax burden. The anticipated economic boost, particularly for small businesses and startups, could drive job creation and innovation across the state. However, both landlords and tenants must act proactively to ensure compliance and maximize benefits. Early coordination, system updates, and clear communication will ensure a seamless transition.

Disclaimer

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Responsibilities of wills and trust attorneys include providing legal advice and guidance related to asset protection, minimizing tax obligations, facilitating efficient wealth transfer to designated heirs, offering advice on appointing guardians for minor children, and drafting healthcare directives for unforeseen circumstances.

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Estate planning attorneys provide advice and legal guidance for managing and distributing assets in the event of death or incapacity and assist individuals of various financial backgrounds in preparing essential legal documents such as wills, trusts, and Lady Bird Deeds, and may offer advanced techniques like offshore trusts and family-limited partnerships.

Experienced attorneys offer personalized legal advice, tailoring strategies to meet individual client needs, and assist clients in navigating complex laws and regulations affecting asset management, taxation, and inheritance.

End-of-life planning safeguards wealth and secures a lasting legacy for heirs and charitable causes. Whether estates are modest or substantial, these plans provide invaluable peace of mind and financial security for future generations.

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Civil litigators are also skilled negotiators, often resolving disputes outside of court to save time and maintain relationships, which is particularly vital in business and probate matters.

When trials are necessary, they present and argue cases effectively to minimize losses and secure favorable outcomes. They offer continuous support and guidance throughout the litigation process, simplifying complex legal issues for their clients in both personal and business contexts.

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Real Estate

A real estate attorney specializes in property law, helping clients navigate the complexities of buying, selling, and managing real estate, ensuring that transactions comply with state laws and regulations, and providing protection and peace of mind.

Responsibilities of an attorney include drafting and reviewing contracts, negotiating terms, and resolving complex issues such as zoning, leasing, property development, and disputes involving boundaries or titles. Real estate attorneys are also skilled in handling litigation related to construction defects and other property disputes, helping to resolve these matters effectively and prevent potential legal challenges.

By conducting due diligence and offering strategic legal advice, attorneys play an important role in safeguarding clients’ interests. Whether for individual homeowners or commercial property investors, real estate attorneys mitigate risks, represent clients in court, and assist them with making informed decisions that are legally sound.

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Business

Attorneys who practice business law provide legal advice for starting, managing, and expanding businesses, ensuring compliance with applicable laws. Their expertise covers various duties, including drafting and reviewing contracts, advising on corporate governance, facilitating business transactions such as mergers and acquisitions, forming partnerships, LLCs, and other business entities like DBAs, drafting and reviewing LLC Operating Agreements, and assisting with strategic planning.

Business attorneys also help wtih legal matters such as intellectual property rights, disputes, franchising, and regulatory compliance, represent clients in civil litigation to resolve issues like contract breaches and other civil matters, offer advice on administrative and compliance requirements, assist clients who are buying or selling businesses, and even help plan for succession and asset protection.

Attorneys help mitigate risks, safeguard company interests, assist clients in making legally sound, informed decisions, help manage growth, and provide guidance to navigate and resolve legal challenges effectively. Their strategic insights are invaluable in ensuring business operations align with legal standards and long-term objectives.

Learn More About Business Law Learn More arrow_forward calendar_today

Probate

Probate attorneys actively manage the estate administration process following an individual's death, ensuring the distribution of assets aligns with the will or state law, and handle Formal Probate Administration for complex cases, Summary Administration for smaller estates, and Ancillary Administration for assets in other states.

Responsibilities of probate attorneys include filing petitions, appointing personal representatives to manage estate affairs, notifying interested parties to ensure transparency and prevent disputes, helping conduct an inventory and appraisal of the estate's assets, overseeing the payment of debts and expenses, handling probate litigation to resolve any disputes that arise.

They also assist in distributing the assets and formally closing the estate, ensuring all legal and financial responsibilities are met, simplifying the complex probate process, honoring the decedent's wishes, and providing clarity and support to the beneficiaries.

Learn More About Probate Learn More arrow_forward calendar_today

Wills & Trusts

Will and trust attorneys help draft legal documents to ensure their clients' wishes for asset distribution are executed correctly. They draft personalized and legally compliant wills to designate beneficiaries, appoint executors, and establish trusts for asset management and distribution. It is important to note that wills and trusts are an integral part of the estate planning process.

Responsibilities of wills and trust attorneys include providing legal advice and guidance related to asset protection, minimizing tax obligations, facilitating efficient wealth transfer to designated heirs, offering advice on appointing guardians for minor children, and drafting healthcare directives for unforeseen circumstances.

By providing tailored legal advice and crafting personalized documents, attorneys help clients safeguard their legacies, protect loved ones, and ensure that all documents are both legally compliant and enforceable.

Learn More About Wills & Trusts Learn More arrow_forward calendar_today

Estate Planning

Estate planning attorneys provide advice and legal guidance for managing and distributing assets in the event of death or incapacity and assist individuals of various financial backgrounds in preparing essential legal documents such as wills, trusts, and Lady Bird Deeds, and may offer advanced techniques like offshore trusts and family-limited partnerships.

Experienced attorneys offer personalized legal advice, tailoring strategies to meet individual client needs, and assist clients in navigating complex laws and regulations affecting asset management, taxation, and inheritance.

End-of-life planning safeguards wealth and secures a lasting legacy for heirs and charitable causes. Whether estates are modest or substantial, these plans provide invaluable peace of mind and financial security for future generations.

Learn More About Estate Planning Learn More arrow_forward calendar_today

Civil Litigation

Civil litigation attorneys manage disputes and represent their clients effectively with various legal matters and issues. They provide clear legal advice and handle all aspects of a case, from preparing documents to gathering evidence and preparing for trial. They also offer guidance and experience to help clients navigate the legal system efficiently, ensuring that cases are managed effectively and lead to timely outcomes.

Civil litigators are also skilled negotiators, often resolving disputes outside of court to save time and maintain relationships, which is particularly vital in business and probate matters.

When trials are necessary, they present and argue cases effectively to minimize losses and secure favorable outcomes. They offer continuous support and guidance throughout the litigation process, simplifying complex legal issues for their clients in both personal and business contexts.

Learn More About Civil Litigation Learn More arrow_forward calendar_today
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