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Florida Leasehold Improvements Not Subject to Sales and Use Tax


Leasing

The rental or leasing of property in Florida is taxable unless the property is exempt. A 6% tax is assessed on the total rent charged. A Florida Court of Appeals found that the cost of leasehold improvements was not part of the total rent charged to an individual and therefore was not subject to Florida sales and use tax. “Total rent” includes payments made for the privilege to use or occupy property, and it includes base rent, percentage rent, or similar charges. In the case in question, evidence didn’t exist that either party to the lease intended for the cost of leasehold improvements to be part of the total rent charged. As such, the cost of leasehold improvements was not subject to Florida sales and use tax. (Department of Revenue v. Ruehl No. 925, LLC, District Court of Appeal of Florida, First District, No. 1D11-2174, December 30, 2011)

(01/17/2012)
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