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Commercial Leasing -Florida sales tax reduction disappointing

Commercial leasing in Florida - Are you a landlord or tenant of a business lease? Municipal governments across Florida just scored a touchdown, but state legislators dropped the ball big time. Recent legislation hurts, rather than helps, Florida businesses -- especially start-up enterprises and small businesses paying commercial rents.

That is the view held by a wide swath of Florida's commercial realtors in reference to lease tax issue we spotlighted in our April 27 blog post.

Namely, that amounts to a business tax levied upon Florida commercial entities paying rents for their offices, warehouses, dealerships and factories. As noted in our April entry, "Florida is the only state in the country to put such a state and local tax burden on commercial renters."

As stated above, government officials love the tax income, and for obvious reasons.

Real estate brokers specializing in commercial property say that the tax materially undermines development and creates a strong disincentive for investment in the state.

Remember, people, vote with their feet. Industries can choose another state to open new branches or even to relocate their headquarters. Businesses already here can decide to relocate out of state.

Firms may decide against an expansion of square footage.

"Sustainable revenue comes not from taxation, but from business growth," notes the Florida Gulfcoast Commercial Association of Realtors,

And incoming revenue will continue to decrease, not increase, as the pool of commercial property under lease stagnates.

That thinking is what leads realtors to condemn the passage late last month of state legislation lowering the tax from 6% of monthly lease outlays to 5.8%.

This tiny, meaningless decrease doesn't fool anyone and is a pointless waste of paper.  Entrepreneurs and business principals leasing commercial properties continue to see great opportunities across the state.  The legislature should encourage, rather than discourage them!

Our office is happy to assist with commercial leases and lease disputes. We handle all types of real estate litigation -- as well as creative approaches to preventing litigation. Visit us at


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