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News & Knowledge

Florida Commercial Lease Sales Tax Rate Further Reduced

August 12, 2019

By: Matthew R. O’Kane and Joaquin E. Martinez

Effective January 1, 2020, the State of Florida’s sales tax rate on commercial real property lease payments (including base rent and additional rent) will be reduced from 5.7% to 5.5% for payments received for occupancy periods beginning on or after January 1, 2020. This will be the third such reduction in the last three years.

The new sales tax rate will be applicable to all payments of rent attributable to the period beginning on or after January 1, 2020, even if such amounts are prepaid prior to that time. For example a Florida commercial tenant prepaying January 2020 rent in December 2019 will pay tax on such rent at the new reduced sales tax rate of 5.5%. Commercial landlords and management companies sending invoices for occupancy periods beginning on or after January 1, 2020 should update their records to account for the sales tax rate reduction.

Note that the sales tax reduction does not affect the local discretionary sales surtax imposed by many Florida counties. The combined sales tax and discretionary sales surtax rate for certain Florida counties for 2019 and 2020 are listed below:

County

2019

2020

Brevard County

6.7%

6.5%

Hillsborough County

8.2%

8.0%

Lake County

6.7%

6.5%

Orange County

6.2%

6.0%

Osceola County

7.2%

7.0%

Pinellas County

6.7%

6.5%

Polk County

6.7%

6.5%

Seminole County

6.7%

6.5%

Volusia County

6.2%

6.0%

As a reminder, Florida sales tax on commercial rent only applies to amounts paid as rent by commercial tenants. Sales of tangible personal property and certain services provided by commercial landlords to their tenants are subject to Florida’s 6.0% sale tax, which is not impacted by this rate reduction.


Joaquin

Being the third generation in his family to be named Joaquin, his parents distinguished him from his father and grandfather by calling him Quino (pronounced “key-no”). Having his name constantly mispronounced doesn’t bother Quino. His clients get it right, and even more significantly, they respect that he gets their business right. No trite statements here; just the facts: Quino cares deeply about his clients, their businesses, and their families.

His clients include public and private real estate investors, developers, property management companies, brokerage firms, and, from time to time, non-profits. Quino has represented these entities in the acquisition, financing, development and disposition of multifamily developments, industrial properties, office buildings, shopping centers, restaurants, hotels, golf courses and other resort related developments, retirement communities and vacant land. He has also represented national lending institutions in connection with commercial loan transactions, workouts and loan restructuring.

Whether focusing on commercial leasingreal estate investment and development or financing, Quino takes “ownership” of his clients’ transactions. Described by his clients as a deal-maker, Quino and his team work hard to ensure that their deals close in a timely manner and that their clients’ objectives are met. Qualities honed by his Jesuit education – integrity, initiative in service of others, patience, persistence and excellent communication – have endeared him to clients and colleagues alike. Those same traits afforded him leadership roles with the Board of Governors of the State Bar of Georgia, the City of Orlando Board of Zoning Adjustment and Habitat for Humanity of Greater Orlando. He also initiated a community partnership and sustained mentoring program between Lowndes and the FAMU College of Law.

Licensed to practice law in Florida, Georgia, and Texas, Quino is proud to be connected to each of those states (but particularly the Lone Star State), and routinely assists clients in matters in each locale. Mostly, he is proud of his deep relationships with his clients and colleagues – who have no trouble pronouncing his name.

Matthew

Matt O’Kane has a broad background in federal tax, Florida state tax, estate planning and U.S. taxation of foreign investors. He counsels clients on a broad range of federal tax issues and business planning issues from entity selection and formation to dissolutions. He advises clients on Florida state tax issues and represents clients in controversies involving the Florida Department of Revenue. He has lectured on Florida sales tax, documentary stamp tax and intangible tax. He also counsels clients on a broad range of wealth transfer issues including estates, gift and generation skipping transfer tax planning, irrevocable trust planning, charitable planning, and family limited partnerships. He also advises nonresident clients with regard to their U.S. investments.

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