We’ve included a link to this new announcement concerning sales tax on commercial rentals. Feel free to open and download the publication, which includes a form to help figure your tax by clicking this link. If you need assistance in filling out the form, please call our office at 386-423-3636.
First, let’s clarify what commercial rentals include. If your business rents any of the following spaces, the new sales tax on commercial rentals applies to you. They are:
- Commercial Offices
- Retail Space
- Storage Units
- Storage Warehouses
When Does the Sales Tax on Commercial Rentals take effect?
Secondly, when does this sales tax on commercial rentals take effect? The 5.8% decrease impacts leases that are currently in effect for occupancy periods beginning after January 1, 2018. If you are currently in a commercial lease, the sales tax on your rent deceases January 1st. Sales tax is due at the rate in effect during the time that the tenant occupies the real property. Regardless of when the rent is paid. Here are examples, provided by Jill Carlton, CPA, to help clarify the rate’s timeframe:
EXAMPLES:
- Rent $600 for December 2017 is paid late by the tenant on January 15, 2018. The property is located in a county with .5% discretionary surtax:
Calculation: $600.00 x 6.5% (6% + discretionary .5%) = tax due $39.00
Old rate applies even though it is paid in January 2018 because the payment was for the December 2017 rental period
- Rent $600 for January 2018 is paid January 15, 2018. The property is located in a county with .5% discretionary surtax:
$600.00 x 6.3% (5.8% + discretionary .5%) = tax due $37.80
The new rate applies for the January 2018 rental period as it is after the 1/1/2018 effective date.
Additionally, please note that the local option discretionary sales surtax imposed by the county where the real property is located continues to apply to the total rent charged. The reduction pertains to the state sales tax rate only, not to the county rate. Regardless, your business taxes will be affected in a positive reduction.
Help with Commercial Taxes
In conclusion, if you rent or lease commercial property for your business, Jill Carlton, CPA PLLC can help clarify this new sales tax on commercial rentals. Jill has many years of experience and is an expert in business tax preparation, accounting & payroll services, audit representation and other tax-related services. Many local businesses in New Smyrna Beach and Volusia County trust Jill with their business taxes. See what other advantages Jill Carlton CPA can find for your business! Call 386-423-3636 to make an appointment today.