Florida taking aim at lease tax
TALLAHASSEE --- One of the biggest parts of a $1.3 billion tax package passed this spring will take hold Friday: a cut in Florida’s commercial-lease tax from 5.5 percent to 4.5 percent.
Projected to save businesses $219.3 million this fiscal year, the tax is slated to be further lowered to 2 percent next year as part of a 2021 deal.
For groups such as the National Federation of Independent Business-Florida, that isn’t low enough.
NFIB-Florida State Executive Director Bill Herrle, in an op-ed, said the tax should be zeroed out in 2025.
“When lawmakers return to Tallahassee in January, our small business members will encourage them to eliminate this onerous tax once and for all,” Herrle wrote.
The state has imposed the tax since 1969, and business lobbying groups have long sought to whittle the rate.
As part of the 2021 agreement, lawmakers approved reducing the rate from 5.5 percent to 2 percent, based on when the state’s Unemployment Compensation Trust Fund is replenished to its level before the COVID-19 pandemic. As an interim step during the 2023 session, lawmakers agreed to reduce the rate from 5.5 percent to 4.5 percent.
The unemployment trust fund was squeezed as businesses shut down and workers lost jobs early in the pandemic. The 2021 decision to reduce the commercial-lease tax to 2 percent was part of a deal that also included requiring out-of-state online retailers to collect sales taxes on purchases made by Floridians.
A legislative staff analysis this year projected the unemployment fund will be replenished in time to allow the 2 percent tax rate to take effect in August 2024.
Herrle said the tax is a “unique” burden costing businesses that operate in Florida $1 billion a year.
“This is a tax that the Florida Legislature could eliminate,” Herrle wrote. “The last few years have seen record revenues coming into the state coffers. It’s more than past time to take a small portion of those record revenues and return them to the job creators.”