Effective January 1, 2019, there will be a decrease in the sales tax rate for renting, leasing, letting or granting a license to use commercial real estate. The rate will fall from 5.8% to 5.7%. Examples of real property subject to the real property rental sales tax include commercial office space or retail space, warehouses, and self-storage units or mini-warehouses.

The commercial sales tax applies to all amounts due and payable by the tenant to a landlord for the right to use the rental. The change in rate will be effective for all payments for occupancy after January 1, 2019. As an example, if you make a payment on December 20, 2018, for the following month, the new rate will apply.

Additionally, on November 6, 2018, Broward County voters approved two new discretionary surtaxes. Effective January 1, 2019, there will be a .5% discretionary surtax added for city infrastructure and another .5% for county transportation improvements. This additional combined 1% surtax will apply to all types of sales tax payable after January 1, 2019, including commercial rentals.

The new commercial rental sales tax rates and county surtax will not affect non-profit exemptions.

Taxpayers registered with the Florida Department of Revenue (FDOR) should have received their Tax Information Publication (TIP) on the new commercial rental sales tax rate as of the date of this article. If you are not receiving your TIPs you should reach out to the FDOR.

If you are a commercial property owner looking for legal representation, please call Pompano Law at 954-942-6500 or visit us at www.pompanolaw.com. Since 1978 we’ve been representing property owners with all of their purchase, sales, refinance and other real estate related legal needs.

Pompano Law is a full service family run law firm practicing in the areas of business, real estate, wills, trusts, estate planning and probate.