Does the tenant have to pay florida state sales tax on base rent, CAM, and property tax ? a tax on a tax?

In Leasing Property - Asked by Tom F. - May 12, 2011
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Answer(s)

Lee G.
Broker/Agent
Orlando, FL

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
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JOHN R.
Broker/Agent
Tampa, FL

NO, FLORIDA LAW IS 7% SALES TAX ON BASE RENT ON COMMERCIAL PROPERTY. RESIDENTIAL RENTAL PROPERTY CAN ALSO BE TAXED IF LEASE IS LESS THAN 7 MONTHS. JOHN REAVES

May 13, 2011
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PlazaCorp R.
Developer
Kalamazoo, MI

Yes. So long as the landlord pays the tax and receives reimbursement from the tenant. If the property were single-user, or divided (into condos or the like), so that the tenant paid tax directly to the taxing body, then the sales tax of 6% (plus any local tax percentage) would not apply since it would not be paid as a pass-thru expense (which is considered rent).

May 18, 2011
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Daron T.
Broker/Agent
Boca Raton, FL

John, the state tax is fixed at 6%. Certain counties have added tax but the sales tax for the state of Florida is 6%.

May 25, 2011
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