In 2018, we shared an article explaining the Florida Legislature’s decision to reduce the business rent tax (“BRT”) from 5.8% to 5.7% for leases commencing in 2019 and beyond. On Election Day 2018, the voters in Lee and Collier counties voted in favor of a discretionary sales tax (the “Sales Tax”), 0.5 percent and 1 percent respectively.

According to the Florida Department of Revenue, if a county has a discretionary sales tax, then the Sales Tax should be collected in addition to the BRT. In other words, the voters in Lee and Collier counties have increased the tax on commercial tenants by voting in favor of the Sales Tax. For example, a landlord of commercial property in Lee County should collect the BRT of 5.7% and Sales Tax of 0.5%.

Therefore, the effective tax rate for commercial tenants in Lee County is 6.2%. Below, we have detailed the effective tax rates for select southwest Florida counties:

  • Lee 6.2%
  • Collier 6.7%
  • Charlotte 6.7%

As with all tax matters, please consult with your tax professional. If you have any questions regarding the Business Rent Tax, the discretionary sales tax and its effects, please feel free to contact us at either caleb.hinton@henlaw.com (239-344-1125) or kaylee.tuck@henlaw.com (239-344-1164).