In a NNN lease do you figure the sales tax on the base rent or on total rent?

In Buying Property - Asked by Maria F. - Mar 19, 2012
Report Abuse
Answer this Question

Answer(s)

Dick C.
Broker/Agent
Oshkosh, WI

Yes

Mar 19, 2012
Report Abuse
Rob M.
Lender/Mortgage Broker
Houston, TX

Try Here

Mar 19, 2012
Report Abuse
Terry M.
Broker/Agent
San Diego, CA

The lease document rules. Expect that the sales figure will be net of returns, but will include sales taxes. On most NNN there is no override based on store sales.

Mar 19, 2012
Report Abuse
Dawn S.
Broker/Agent
Spring, TX

Triple Net Lease (NNN) – A Triple net lease is a net lease where the tenant agrees to pay a monthly lump sum base rent as well as the property taxes, the property insurance, and the maintenance. Under a triple net lease there are a few legal defenses which may relieve a tenant of his responsibilities. For example, a triple net lease may relieve the tenant of his responsibility if the property is subject to an eminent domain proceeding.

Mar 19, 2012
Report Abuse
Alex J.
Broker/Agent
Plano, TX

I am assuming that you are referring to a percentage rent lease clause. The lease should stipulate the details of the revenue to be used for a percentage lease clause. The tenant and landlord need to agree on whether the sales tax payable to the government would be included in the tenant reporting revenue for the percentage rent calculations. Typically tenants desire to have the sales tax payable excluded from the calculations. As mentioned previously, it is a negotiable item between the tenant and the landlord.

Mar 21, 2012
Report Abuse
Randolph G.
Broker/Agent
Boca Raton, FL

Total rent.

Mar 24, 2012
Report Abuse
Gregory G.
Broker/Agent
San Francisco, CA

What do you mean by sales tax?
-
Gregory Garver - Commercial Real Estate Broker
Broker License# 01716531
(415)225-9894
gregory.garver@gmail.com

Jun 30, 2012
Report Abuse
Leonardo D.
Broker/Agent
Miami, FL

Hi Maria,
Sales tax is based on the total consideration including pass throughs. The article below explains in detail what is taxed.

Jul 22, 2012
Report Abuse
Chris S.
Broker/Agent
Coeur D'alene, ID

The lease contract should be specific in this regard. If not, then I would default to NOT including it in the calculation.

Aug 1, 2012
Report Abuse

Welcome to Answers

LoopNet Answers is where the commercial real estate community shares what they know to help each other out. And it's all for free.

Ask a question to get advice from brokers, investors, professionals and local experts.

Answer questions to raise your visibility as a trusted advisor and build new relationships.

Ask a Question

Post Question