Currently, commercial rentals are taxed at 6% at the state level, plus the local discretionary surtax. SB 656 by Sen. Hukill and HB 629 by Rep. O’Toole propose to phase out the sales and use tax on commercial rentals by reducing the tax rate by 1% per year and completely repealing both state and local sales and use taxes in the year 2019.
This proposal has been identified by the Florida Association of Realtors as one of its primary legislative objectives for 2013.
According to the Florida Revenue Estimating Conference, if this proposal were to pass it would have a negative recurring fiscal impact to local governments equal to $386.2 million annually by FY 2019. The total fiscal impact including the State’s revenue would be $1.4 Billion by FY 2019. To view the State’s fiscal impact analysis on this issue, please click here.
Neither bill has been actually scheduled for its first hearing as of yet. While the bill was not anticipated during FAC’s policy development process, FAC staff, as well as staff from the Florida League of Cities are planning on recommending that both groups oppose this legislation or any variation of the original draft. As further information and analyses are developed towards these efforts, FAC staff will distribute this information to each county’s respective designated legislative contact.