It costs jobs. It limits a business's growth potential. It discourages people from starting small businesses. It leaves holes in communities as commercial space sits empty. These, and many more comments just like them, abound when you ask Realtors® about the business rent tax.
"I have been involved in multiple deals that simply fell apart once the client started factoring in the extra cost of the business rent tax," says Edward Redlich, a commercial Realtor based out of Miami.
So, what exactly is the business rent tax and why is Florida Realtors fighting to reduce it?
Florida charges a six percent sales tax on businesses that rent commercial space. Additionally, municipalities and local governments may levy taxes on top of the state sales tax rate, resulting in businesses paying up to an eight-percent sales tax rate on their business rent.
For many businesses currently operating in Florida, that six to eight percent tax is a big hit to the bottom line. Lowering the business rent tax will provide Florida businesses with the capital to expand, hire more employees, buy new equipment, improve benefits and raise salaries. It would also diminish a potential barrier to out-of-state businesses contemplating a move to Florida.
Florida Realtors is leading a coalition of business trade associations to advocate for the successful passage of a bill that will reduce the amount of sales tax that businesses must pay to rent commercial space.
"The business rent tax leads to negative impacts on Realtors who are trying to help businesses grow and relocate, and communities who miss out on the benefits of a healthier business climate," Redlich says. "Reducing this unfair tax will pay big dividends to our economy in the years to come."