- Florida TaxWatch’s continued call for a cut to the business rent tax (BRT) is echoed again in its latest report. The BRT, the only statewide tax of its kind in the country, requires all Florida businesses to pay the state a six percent tax on commercial leases, with a local option up to an additional two percent. This places a significant and costly burden upon Florida businesses, especially start-ups and smaller companies.
Florida TaxWatch’s report highly recommends that the Legislature permanently cut the BRT by one percent during the 2017 Legislative Session.
“For years, Florida TaxWatch has called on the Legislature to take scissors to the BRT and cut the rate on Florida businesses. Too many hard-working Floridians are facing difficult decisions regarding the future of their business thanks to this onerous tax,” said Florida TaxWatch President and CEO Dominic M. Calabro. “This is a clear competitive disadvantage for the state economy and the time is now to finally put this issue to rest.”
The report found that, assuming a lease rate of $16 per square foot, each 10,000 square feet of space would cost the renter $9,600 in state sales taxes annually. This does not include any applicable local option taxes, which, at the highest rate, would add $2,400 (25 percent) to the tax bill. Reducing the state tax rate from 6 percent to 5 percent would save this hypothetical taxpayer $1,600 per 10,000 square feet of leased space.
“Over the past few years, we have discussed chipping away at Florida’s business rent tax. Small businesses have suffered for too long and that’s not good for Florida families. This year, the Florida House remains committed to placing families first and ensuring Florida remains the most competitive state for job creators by returning $454 million into Florida businesses,” said House Ways and Means Chairman Jim Boyd.
The BRT puts Florida at a significant economic disadvantage. Not only does it increase costs for Florida businesses but it prevents them from hiring additional people and expanding to new locations in the state. Additionally, businesses from outside the state could be discouraged from relocating to Florida because of the BRT. Florida TaxWatch noted that in an annual survey of corporate executives, occupancy costs ranged between the fourth and second most important site selection factor, meaning the BRT is potentially turning off companies from moving to Florida, costing jobs for hard-working Floridians.
For the full report, click here