Decrease in sales tax for real property rentals, effective Jan. 1

For UF departments conducting real property rental activities to others, a new lower state sales tax rate will be going into effect. (Real property is real estate, including land and structures, and the owners’ rights to use the property as they see fit.)

Effective Jan. 1, the state sales tax rate imposed under section 212.031, Florida Statutes, on the total rent charged for renting, leasing, letting or granting a license to use real property will decrease from 6.0 percent to 5.8 percent. Some examples of real property rentals subject to tax include:

• Commercial office or retail space (including rooms/space for conferences, conventions and meetings)
• Warehouses or mini-warehouses
• Self-storage units

Sales tax is due at the rate in effect during the time the tenant occupies, or is entitled to occupy, the real property regardless of when the rent is paid. Rental charges paid on or after Jan. 1, 2018, for rental periods prior to Jan. 1, 2018, are subject to 6-percent state sales tax, plus any applicable discretionary sales surtax. Rental payments made prior to Jan. 1, 2018, that entitle the tenant to occupy the real property on or after Jan. 1, 2018, are subject to 5.8-percent state sales tax, plus any applicable discretionary sales surtax.

The decrease in the state sales tax rate for renting, leasing, letting or granting a license to use real property does not apply to the tax imposed under section 212.03(6), Florida Statutes (parking or storage space for motor vehicles in parking lots or garages, including storage facilities for towed vehicles; docking or storage spaces for boats in boat docks or marinas; tie-down or storage space for aircraft at airports).

Please refer to the Florida Department of Revenue TIP #17A01-14 and the University Payroll and Tax – Sales and Use Tax website or contact fa-sales-tax@admin.ufl.edu for further assistance.