Charges passed through to a tenant by the landlord for utility, security, maid, landscaping, repairs, and other general maintenance services are part of the total consideration for the use and enjoyment of the premises and are taxable. The one exception is charges for electricity. If the landlord has paid sales tax on electricity measured at the landlord's master meter, the electricity's cost was not taxable as rent when passed on to the tenant. Sales tax is due at the rate of 6 percent on the total rent paid for the right to use or occupy commercial real property, unless the rent is specifically exempt. If the tenant makes payments such as mortgage, ad valorem taxes or insurance on behalf of the landlord, those payments are also classified as rent and are subject to tax. Payments for separately stated services that are required under the lease or license are part of the taxable total rent paid.
May 12, 2011