CLEARWATER, Fla. — Starting in June, businesses that rent property in Florida will pay reduced rental taxes.
What you need to know: Florida will cut its commercial lease sales tax from 4.5% to 2% by June 1st.
Business experts say this will help the state remain competitive in attracting businesses.
Taxes increased after the pandemic as the Commerce Department's trust fund dried up.
The fund recently surpassed $4 billion, leading to the announced changes.
The Florida Department of Commerce announced earlier this month that the state's commercial lease sales tax rate will be reduced from 4.5% to 2% by June 1.
The decision was made possible because the state was able to replenish its Reemployment Assistance Trust Fund, which was depleted during the pandemic.
One Clearwater business owner said he's excited about the prospect of paying less in taxes to rent his facility.
“We were looking for a job that wasn't as stressful as our previous jobs, so we thought this would be good,” said Michelle Napoleon, spa director at Essentials Spa in Clearwater.
Napoleon said he and his wife, Marisol, opened Essentials in February 2020, just before the pandemic hit.
What was meant to be a relaxing time quickly became a source of anxiety, he said.
“It was a great learning experience,” Napoleon said.
He said offering a range of goods and services has allowed businesses to stay afloat and, in some cases, thrive.
“This was a kind of pandemic preparedness,” Napoleon said. “People were at home and stressed, so this was a big need.”
Over the next few years, rent became increasingly burdensome for him, as it was for many Bay Area businesses.
Especially if you have a 5,000 square foot spa with about 15 treatment rooms.
“The prices aren't cheap,” Napoleon said. “Initially we were able to negotiate the rent, but now the prices have gone up.”
He said inflation has also increased the prices of the products they use, so any lifeline they can get is appreciated.
“We really feel that,” Napoleon said, “so this change in policy is going to be really good for us.”
Amanda Payne, president and CEO of AMPLIFY Clearwater, said she believes the tax is unnecessary and that lowering and eventually eliminating the tax is the best outcome for businesses like Essentials Spa.
“It's been a challenge because of interest rates and rising prices, and there's very limited supply,” Payne said.
“We want to remain competitive,” Payne added. “We want to maintain an environment where people want to move here and do business.”