What is the Florida commercial rent sales tax and how do I record it in my books?

Florida is one of the only states in the country that charges sales tax on commercial rent. If you lease office space, a retail storefront, a warehouse, or any other commercial property in Florida, your landlord is required to collect sales tax on your monthly rent and remit it to the state.

The current state rate is 2%, which was reduced from 4.5% over the past few years. On top of that, each county adds its own discretionary surtax. In Orange County, that surtax is 0.5%, bringing the total to 2.5%. So if your monthly rent is $3,000, you’re paying an extra $75 in sales tax every month. Over a full year that adds up to $900 in additional occupancy cost that catches a lot of first-time commercial tenants off guard.

The tax is charged on top of your rent, not included in it. It typically applies to base rent and common area maintenance charges. Your landlord should be itemizing it on their invoice. If they’re not breaking it out separately, ask them to. You need that detail for your records.

In QuickBooks, do not lump the sales tax in with your rent expense. Create a separate expense account called something like “Sales Tax on Rent” or “Rent - Sales Tax.” Each month when you enter the payment, split the transaction into two lines. Base rent goes to your Rent or Lease Expense account, and the tax portion goes to the separate tax account. If your landlord also charges CAM fees, that can be a third line. The goal is to never combine different types of costs into a single entry.

Keeping the tax separate matters for a few reasons. It gives you a clearer picture of your actual occupancy costs when you review your financials. It makes your accountant’s life easier at tax time because both amounts are deductible but they’re different types of expenses. And when you’re comparing lease options or budgeting for a new location, you want to see base rent without the tax muddying the comparison. A small business bookkeeper familiar with Florida will set this up correctly from the start so you don’t have to untangle months of combined entries later.

This is one of those Florida-specific details that trips up business owners who relocate from other states or who are signing their first commercial lease. It’s also worth noting that the rate has changed multiple times in recent years, dropping from 5.5% to 4.5% to the current 2%. If you’re handling your own sales tax management, keep an eye on the rate because it could change again. Your landlord should be applying the correct rate, but it never hurts to verify.

If your books currently have rent and the tax combined into one monthly entry, go back and split them. The longer you let it go, the more cleanup you’ll need. It’s a small adjustment each month that keeps your financial reports accurate and your tax preparation straightforward.