Florida revenue officials spike idea to tax business leases

After lobbying by commercial real estate groups, Florida's Department of Revenue spiked a plan that could have imposed more taxes on business leases.

Department of Revenue officials met with commercial real estate brokers and developers earlier this month to discuss how sales taxes are levied on improvements that leaseholders make to buildings. Florida Gulfcoast Commercial Association of Realtors characterized the study as "double taxation" and feared a new tax would stall business expansion and stymie job growth in Florida.

A tax official confirmed Monday that the study will not move forward.

Currently, taxes are paid on building materials used for commercial property renovations made after tenants sign leases, according to FGCAR. Once the property appraiser reassesses the property, the owner may also have to pay higher taxes if the upgrades increased the property value.

The state also collects a 6 percent tax on the amount paid for leases. In other words, the state gets $60 for a $1,000-a-month commercial lease. Local governments often add 1 or 2 percent to the tax on leases.