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Agents lobby for sales tax cut to commercial rent

25th Feb, 2013back

347 Real-estate agents in Florida are lobbying for a tax break that would eliminate the sales tax on commercial rent. Following last year's bid for a property tax cut, which was rejected, the group is now hoping to persuade the Florida Legislature to remove the sales tax currently charged on commercial rent. Eliminating this sales tax would give commercial property owners more scope for charging higher rents, effectively increasing commissions for commercial agents and brokers.

Dean Asher, an Orlando realtor, said: "The property owner would be able to get more income for their property, versus paying it to the state".

State representative Marlene O'Toole said: "People that do business in the state of Florida, like the grocers, if they didn't have to pay the tax, they would probably increase their business in the state".

It has been highlighted by supporters of the tax break that state taxes on commercial rent are not commonplace, with Florida being just one of three states to add a tax charge; the others are Arizona and Hawaii. New York City also enforces commercial rent tax.

Florida is one of seven states without a personal income tax and has been attracting a number of investors bringing business to the area, as a result of the appeal of the state boasting one of the country's lower corporate income tax rates. This has seen the state rank as the country's fifth most favorable tax climate for businesses.

The Florida Association of Realtors has made the tax elimination on commercial rent its top legislative priority, although the group does acknowledge that enforcing the tax cut immediately could prove difficult. It has therefore drafted a cut from 6% to 5% in 2014 and one point cuts each year thereafter until the rate eventually reaches zero.