NAIOP Florida Legislative Efforts Result in Major Reduction to the Business Rent Tax
Brian DePotter, Managing Partner, FirstPointe Advisors, LLC and NAIOP Florida Board Member and NAIOP South Florida Legislative Affairs Co-Chair plays instrumental role in the passage of the major reduction to the business rent tax. NAIOP South Florida published the below press release on April 20, 2021.
FORT LAUDERDALE, Fla. (April 20, 2021) – NAIOP South Florida, the Commercial Real Estate Development Association, has announced that a significant cut to the Business Rent Tax – the sales tax on rents under commercial leases – is on the horizon.
The Florida chapters of NAIOP, the Commercial Real Estate Development Association, have long recognized that this tax, which is unique to Florida, is an undue burden on commercial landlords and tenants. Due in part to NAIOP’s continued advocacy over the past several years, incremental reductions have been achieved. Now, with the passage of SB50 on April 19, 2021, which enforces Florida’s existing sales tax on online purchases, a truly meaningful cut will be made.
The initial proceeds from the online sales tax will be directed to the unemployment tax fund for businesses. When that fund collects $4,017,000,000, which could occur as soon as 2023, the Business Rent Tax will automatically be reduced from 5.5% to 2.0%.
This is projected to save Florida businesses over $1,000,000,000 in taxes annually that can be reinvested into their companies, employees and communities.
“This success is a credit to NAIOP Florida’s tireless effort and validates our belief that the Business Rent Tax is bad for business. It is real progress toward our ultimate goal – the elimination of this onerous tax,” says Trey Wilson, NAIOP Florida’s 2021 President and a partner at the law firm of Driver, McAfee, Hawthorne & Diebenow, PLLC in Jacksonville.
Leadership from each of Florida’s five NAIOP chapters – Tampa, Central, Northwest, Northeast and South Florida – actively engaged lawmakers in multiple virtual visits and letter-writing campaigns during the 2021 legislative cycle. A central focus of those visits was lowering, and eventually eradicating, the Business Rent Tax.
“The passage of SB50 will lead to a meaningful reduction in the business rent tax, creating parity for brick-and-mortar businesses and benefiting the entrepreneur/small business community, which is the back-bone of commercial real estate and the American economy,” said NAIOP South Florida President Ryan Nee, First Vice President and District Manager of Marcus & Millichap. “This win for the commercial real estate community and the business community is a great reminder of the advocacy efficacy of NAIOP and a call to action for everyone in the business community to become a part of NAIOP.”