Tax Law Updates

Statal Law

Expanded and Permanent Sales Tax Holidays & Exemptions

Repeal of Commercial Rent Sales Tax

Effective October 1, 2025, Florida completely eliminates the state sales tax on commercial real property rentals. This is a significant tax reduction for businesses operating in Florida, as the state was the last in the U.S. to impose such a tax

Key Property Tax Adjustments and Future Study Mandate

Corporate Income Tax Conformity and New Credits

Florida's corporate income tax code has been updated to conform with the federal Internal Revenue Code as of January 1, 2025, ensuring consistency with recent federal tax changes. The law also introduces new corporate tax credits, including those for contributions to housing for families of critically ill children and support for rural community investment.

While comprehensive property tax reform wasn't fully passed, HB 7031 includes significant property tax changes. It expands property tax exemptions for multifamily affordable housing and for childcare centers with a Gold Seal designation. Crucially, it mandates the Office of Economic and Demographic Research to conduct a comprehensive study of Florida's property tax system and report to the Legislature by November 1, 2025, signaling future legislative action in this area.

Florida's HB 7031 establishes a new permanent, month-long Back-to-School Sales Tax Holiday every August. It also creates new permanent sales tax exemptions for various health, safety, and outdoor items like batteries, bicycle helmets, fire extinguishers, sunscreen, insect repellent, and admissions to Florida State Parks, effective August 1, 2025.

Federal Law

Continued Shift Towards Flat-Rate Income Taxes at the State Level

Several states are simplifying individual income taxes. Iowa and Louisiana are notable, transitioning from progressive to flat tax rates (3.8% and 3% respectively) in 2025. Other states like Mississippi, Missouri, Nebraska, and North Carolina are also reducing their top marginal rates. This trend aims to streamline tax codes, boost economic growth, and enhance state competitiveness.

The 2025 Tax Act

Florida's HB 7031 brings significant tax relief. Commercial rent sales tax is fully repealed (Oct 1, 2025). Expect expanded permanent sales tax holidays and new exemptions. Corporate tax aligns federally with new credits. Property tax includes expanded affordable housing exemptions and mandates a future system study.

Property Tax Relief Measures and Debates

Rising home prices spurred property tax cuts in many states by mid-2025, including Idaho, Kansas, and Texas. Florida notably repealed commercial lease sales tax and boosted homestead exemptions. Vermont also aided seniors and disabled residents with exemptions and is exploring new assessment methods, indicating widespread state efforts to address property tax burdens.

Sales Tax Base Expansions and "Sin Taxes" Increases

Many states adjusted sales tax bases by July 1, 2025. Arkansas and Kansas expanded data center exemptions, while Minnesota ended theirs. Colorado now taxes interstate phone services. Cannabis taxes increased in states like California, Maryland, and Minnesota, while tobacco/nicotine taxes rose in California, Illinois, Indiana, and North Carolina, alongside sports betting tax shifts.