FGCAR Deems Florida Lawmakers’ Reduction of Business Rental Tax Economically Damaging

Professional commercial realtors in the Sunshine State stimulate commercial development and attract new business, yet are left scratching their heads in the wake of the tax being very slightly reduced and not more fully eliminated.

(Palm Harbor, FL) June 06, 2017—The Florida Gulfcoast Commercial Association of Realtors® (FGCAR) stands behind its position that the recently reduced business rental tax by the Florida Senate remains economically damaging to business, even as a very small measure of relief was accomplished. A tax on businesses works against commercial development and creates a disincentive for businesses to locate in Florida, maintains the organization that comprises over 400 commercial real estate brokers and professional affiliates in the Tampa Bay region.

“The business rent tax should not merely be reduced, but eliminated. Florida is the only state in the union that charges such a tax,” said Brian Andrus, president of FGCAR.  “It is one of those factors that contributes to suppressing job growth and, therefore, economic activity.”

In an 11th-hour session last month, the Florida Senate passed a long-awaited tax-relief measure in the form of House Bill 7109. Included in the omnibus package was a 3.3% reduction (from 6% of total monthly lease payments to 5.8%) in Florida’s controversial—and, in the view of commercial real estate industry experts, wrongheaded and economically damaging—state tax on business property rentals.1

As an example, a $10,000 monthly lease amount will have its $600 tax reduced to $580, a $20 savings.   “This is progress, but $20 per week is not going to hire a new person whereas $600 per week moves toward providing one”, said Andrus.

FGCAR represent the interests of commercial Realtors throughout the Tampa Bay region and note that the business tax places a disproportionate burden on small businesses and startups, particularly in highly competitive, low-margin industries like retail.

If the tenant also makes payments towards maintenance, ad valorem taxes, or insurance on behalf of the landlord, these payments are also classified as rent and subject to the tax. Examples of this are payments for services such as utilities, parking, and janitorial services that may also be included in the taxable rent.2

The tax-relief bill passed in May 2017 represented the last in a series of adjustments and compromises made to the business rental tax as it passed through committee in both houses of the legislature. While almost universally opposed by business groups, the business rental tax has been part of Florida law since 1969. One reason for the tax’s tenacity is its popularity with Florida municipal governments, which can impose a local surtax of up to 1.5% on the state tax.3

“We understand municipalities’ attachment to this revenue source,” says FGCAR’s Andrus, “but we reject the reasoning behind it. Sustainable revenue comes not from taxation, but from business growth.”

In the wake of the reduced, though not eliminated business rent tax, it is incumbent upon municipalities, counties and development professionals to utilize the expertise of the Florida Gulfcoast Commercial Association of Realtors®’ professionals and their resources. Commercial brokers, appraisers, title companies, lenders, attorneys, civil engineers, environmental specialists, and urban planners work together with municipalities to stimulate commercial development, attract new business, facilitate property closings and enhance the economic well-being of their entire area. In this way FGCAR enables the market to function as it should.

About Florida Gulfcoast Commercial Association of Realtors:

Established in November 1993, the Florida Gulfcoast Commercial Association of Realtors® (FGCAR) is the lone commercial-only professional real estate board for licensed commercial real estate brokers and professional affiliates in the Tampa Bay region, is one of only two in Florida and one of a handful nationwide.  The mission of the Florida Gulfcoast Commercial Association of Realtors® is to provide the Tampa Bay region a source of professional expertise and ethical accountability in the field of commercial real estate. The association offers continuing education as well as resources for all brokers and professionals engaged in commercial real estate transactions.

About Brian Andrus:

As president of the Florida Gulfcoast Commercial Association of Realtors, Brian Andrus brings a background of experience to the organization which provides the Tampa Bay region with a solid source of professional expertise and ethical accountability in the field of commercial real estate. Andrus is managing broker at Stonebridge Real Estate Co., a commercial and residential real estate brokerage in Clearwater, FL.

1. Staff Writer. “Lawmakers Complete 2017 Broad-Based Tax Relief Package.” Sunshine State News. N.p.,Web. 09 May 2017.

2. Neal, Pat. “Business Rent Tax Stifles Florida’s Economic Future.” N.p., Web. Sunshine State News. 06 April 2017.

3. Staff Writer. “Reducing the Business Rent Tax.” N.p., n.d., Web. Florida TaxWatch. October 2015.

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