fbpx

Move to cut business rent tax continues

The 2019 Florida legislative session is setting up to be busy for bills affecting the commercial real estate sector.

Topping the industry’s priority pile again this year is further reducing the business rent tax on commercial leases.

Florida is the only state that imposes a sales tax on commercial rent and operating expenses, collectively known as CAM (common area maintenance). Because CAM is generally inclusive of a passthrough of all ad valorem taxes, business tenants are also paying sales tax on property taxes paid to local municipalities and counties.

A squeaky but heavyweight coalition of industry groups, including Florida Realtors, NAIOP and the Florida Chamber of Commerce, have successfully nudged back the rent tax rate from the state’s standard 6 percent sales tax to 5.7 percent during the previous two legislative sessions. This year, the group is rolling up its sleeves to back an effort to slash the commercial rent tax to 4.2 percent and institute an internet sales tax to make up the difference.

The state collects approximate $1.8 billion a year in business rent tax. Reducing it by 1.5 percent would cost about $500 million in tax revenue. An internet sales tax, however, could raise $300 million to $450 million a year in tax revenue, estimates show.

Florida is among a growing number of states now considering sales tax requirements on goods bought online in the aftermath of last year’s U.S. Supreme Court ruling striking an old trade law stipulation that a seller had to have a physical presence in a state to be subjected to its sales tax.

Commercial real estate interests have long maintained that the tax disparity created a competitive disadvantage for bricks-and-mortar retailers. But raising taxes can be a tough sell in Tallahassee.

“I think it faces an uphill battle,” says Carolyn Johnson, director of business economic development and innovation at the Florida Chamber. She’s says it won’t be until later in the Legislature’s 60-day session before the tax bills really get hammered out.

Meanwhile, the session, which started March 5, already had at least two bills requiring further rollbacks of the business rent tax.

The business rent tax “really prevents businesses from expanding and investing back into themselves,” Johnson says.

Other CRE-centric legislation to watch this session:

• Permit transparency legislation, which would require local governments to publicly post permit and inspection fee costs and how that revenue is being applied within government functions. Commercial and construction industry experts argue local governments arbitrarily raise those fees and then shift that revenue to nonrelated departments and functions.

• Commercial lease digital execution legislation, which would allow commercial leases to be signed electronically thus streamlining the signing and witnessing process.

• Fast Act, which seeks to shorten the prolonged and often onerous process of getting a building permit by requiring local governments to hit certain issuing deadlines or face fee reductions. The permitting process can sometimes take longer than an actual construction project.

Freelance writer Darcie Lunsford is a former real estate editor of the South Florida Business Journal. She is the senior VP for leasing at Butters Group and is avoiding a conflict of interest in her column by not covering her own deals.

You May Also Like
State Legislature Drops the Job Growth Ball

By Gary Press   With Florida facing historically high unemployment because of the COVID-19 pandemic, one would think our state government would be pulling out all of the stops to

Read More
Rethinking Sales Today

Today, more organizations increasingly are facing more competition, rapidly changing technology, slower market growth and less product differentiation. This trend requires business development professionals to manage more accounts, build stronger

Read More
The Future of the Office

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] As I talked to my many office tenants in the first few weeks of the national shutdown, they were pleasantly surprised

Read More
Is your sales manager managing time well?

Is your sales manager balancing priorities properly? How do you know? Today a big question faced by most executives is, what is my sales manager doing and what should he

Read More
Other Posts
And Justice For All

By Monica St. Omer   Monica St. Omer has been working with me for eight years. She is my right-hand but so much more. She is a wonderful soul who

Read More
Keeping us connected

As a company that doesn’t directly serve the general public, SBA Communications might be called the quiet giant of the South Florida business scene even thought it’s on the S&P

Read More
Lessons learned

As I write this column, South Florida has yet to enter into a phase one reopening, lagging the rest of the state. I hope readers and their businesses are negotiating

Read More
The Unseen Enemy

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] As I wrote my column in March for the April issue, the COVID-19 virus was just starting to wreak havoc in

Read More

Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.