Florida Commercial Leases Explained: NNN, Gross, CAM and the End of the Business Rent Tax

Commercial

Oct 22

Quick answer: Florida's sales tax on commercial rent ended for occupancy periods beginning on or after October 1, 2025, under Chapter 2025-208 (HB 7031), and the county surtax ended with it; rent for periods through September 2025 is still taxable even if paid later. The lease type decides what the tenant pays beyond base rent: a gross lease bundles operating expenses into one rent, a triple net (NNN) lease adds the tenant's share of property taxes, insurance and common area maintenance, and a modified gross lease splits them by negotiation. Part I of chapter 83 of the Florida Statutes sets the default rules for nonresidential tenancies, including notice periods and the removal process. None of this replaces an attorney reading the specific lease.

A business owner looking at a bay in a Port St. Lucie retail center or an office suite in Melbourne usually gets a rate like "$20 NNN" before anything else. That number is only part of the rent. The lease type decides which building costs the tenant pays on top of it, and the clauses decide how those costs change over the term. This article covers lease structures, CAM billing, the clauses that matter, Florida's nonresidential tenancy statute, and the end of the sales tax on commercial rent. It does not replace a Florida real estate attorney reading the lease.

Net, gross and modified gross

In a gross lease, the landlord pays the property's operating expenses and the tenant pays a single, all-inclusive rent. In a net lease, the tenant pays base rent plus some or all of the operating expenses, which can include property taxes, insurance, utilities and common area maintenance (Cornell Law School's Wex, reviewed November 2025). The letters count categories: single net adds property taxes, double net adds taxes and insurance, and triple net, written NNN, adds taxes, insurance and common area maintenance.

A modified gross lease sits between the two: both landlord and tenant pay some of the operating expenses, and the split depends on the lease (PropertyMetrics, February 24, 2025). With a base year, the landlord's share is fixed at the expenses in the base year, typically the calendar year the lease begins, and the tenant pays its share of anything above that. With an expense stop, the landlord pays up to a stated amount and the tenant pays above it. I found no Florida statute that defines any of these lease types; the lease does.

How CAM is billed and reconciled

Common area maintenance charges, or CAM, are fees commercial tenants pay on top of base rent to cover the cost of maintaining shared spaces (Occupier, updated August 23, 2026). The tenant's pro rata share is usually its rentable square footage divided by the property's gross leasable area. Landlords estimate CAM at the start of the year, bill it monthly on that estimate, and reconcile against actual expenses at year end; the tenant owes the difference or receives a credit. That reconciliation is where a NNN tenant learns what the year cost, so the definition of CAM, its exclusions and the audit right deserve more attention than the base rent usually gets.

The same space under NNN and gross terms

A hypothetical with round numbers: a 2,000 square foot bay in a 20,000 square foot retail center is offered at $20.00 per square foot per year NNN. The center's annual property taxes are $60,000, insurance $20,000 and estimated CAM $40,000. The pro rata share is the tenant's rentable area divided by the center's gross leasable area: 2,000 divided by 20,000, or 10 percent. For the gross column I assume the same bay at $26.00 per square foot gross, chosen because it equals the NNN quote plus the estimated pass-throughs, so the table shows who carries the difference when costs move, not which structure is cheaper.

Line	NNN lease	Gross lease	Basis
Annual base rent	$40,000	$52,000	$20.00 x 2,000 sf; $26.00 x 2,000 sf
Estimated pass-throughs	$12,000 ($6.00 per sf)	Included in rent	($60,000 + $20,000 + $40,000) x 10 percent
Monthly payment, estimated	$4,333.33	$4,333.33	$3,333.33 base plus $1,000.00 NNN; $52,000 divided by 12
Year end reconciliation if actual CAM is $44,000	Tenant owes $400	No change	($60,000 + $20,000 + $44,000) x 10 percent = $12,400, less $12,000 paid
Annual cost after reconciliation	$52,400	$52,000	Base rent plus actual pass-throughs

The two structures cost the same until something changes, and then the NNN tenant pays the $400 while the gross tenant does not. The pattern holds if taxes or insurance move instead. Under a modified gross lease with a base year, the tenant would pay its share only of the amount above the base year's expenses.

The clauses that decide what the rent becomes

A tenant-side article from a Florida law firm, published March 30, 2026, describes the escalation methods (Finberg Firm). The article describes increases tied to a consumer price index as common and suggests naming the index and capping the annual increase; fixed percentage increases are predictable; resets to a market rate are called high risk unless the lease sets an objective method for finding that rate. On CAM, it recommends audit rights, excluding capital improvements, leasing commissions, legal fees and the cost of pre-existing code violations, and capping the expenses the landlord controls. On assignment and subletting, it recommends that consent not be unreasonably withheld, conditioned or delayed. The article cites no Florida statute; these are contract terms, not legal defaults.

Three more documents come up. A personal guaranty puts a guarantor, a person or entity that assumes the financial obligation of another party, behind the tenant entity (Wex, reviewed January 2023). An estoppel certificate is a representation as of a particular moment in time as to the status of the lease, and lenders generally want one dated no more than 30 days before closing (Williams Mullen, December 27, 2022). An SNDA (subordination, non-disturbance and attornment agreement) subordinates the lease to the lender's lien, promises that a tenant not in default will not be disturbed, and has the tenant recognize a new owner after foreclosure.

What chapter 83, part I covers

Part I of chapter 83 of the Florida Statutes applies to nonresidential tenancies and all tenancies not governed by the residential part (s. 83.001). A lease that is not in writing and signed by the lessor is a tenancy at will, with a period that matches how rent is paid (s. 83.01). Ending a tenancy at will takes notice before the end of a period: at least 3 months for year to year, 45 days for quarter to quarter, 15 days for month to month and 7 days for week to week (s. 83.03). A tenant who stays after a written fixed-term lease expires, without a new written lease, is a tenant at sufferance, and accepting rent alone does not renew the term (s. 83.04). The landlord may demand double the monthly rent from a tenant who refuses to leave (s. 83.06).

Removal for nonpayment requires 3 days' written notice demanding the rent or possession; a material non-rent breach requires 15 days' written notice to cure, but only when the lease is silent or the tenancy is an oral tenancy at will (s. 83.20). The landlord also has a lien on the tenant's property usually kept on the premises, enforced through the distress for rent procedure (ss. 83.08 and 83.11 to 83.19). Some sections of part I apply only when the lease is silent, which is one reason the written lease matters.

The business rent tax is gone, with a cutoff

Until October 2025, Florida charged sales tax on commercial rent. Former s. 212.031 taxed 2.0 percent of the total rent, which the statute said included base rent, percentage rents or similar charges, at the rate in effect when the tenant occupied the space regardless of when rent was paid, with the tenant paying the tax to the landlord (2024 Florida Statutes). The rate had come down in steps: from 5.5 percent to 4.5 percent effective December 1, 2023 (Department of Revenue TIP 23A01-20, issued September 25, 2023, citing Chapter 2023-157), and from 4.5 percent to 2.0 percent effective June 1, 2024 (TIP 24A01-02, issued April 8, 2024, citing Chapter 2021-2). Holland & Knight, a law firm, states the rate fell from 6 percent in 2017; I found no Department of Revenue publications for the steps between 6 and 5.5 percent.

HB 7031 (2025) became Chapter 2025-208, Laws of Florida, approved by the Governor on June 30, 2025. The Department of Revenue's TIP 25A01-04, issued July 24, 2025, states that effective October 1, 2025 the state sales tax on commercial real property rentals under s. 212.031 is repealed. The cutoff is by occupancy period, not payment date: rent for occupancy through September 2025 remains taxable at the 2 percent state rate plus any county surtax even if paid later, and payments made before October 1, 2025 for later periods are not taxable. The county surtax on rent ended on the same schedule; for 2025 it was 1 percent in St. Lucie, Martin, Indian River and Brevard counties (DOR form DR-15DSS). In the hypothetical above, a September 2025 period in St. Lucie County carried tax of 3 percent on $4,333.33, or $130.00; an October 2025 period carried none. Transient rentals of six months or less, parking or storage of motor vehicles, boat docking or storage, and aircraft tie-down or storage remain taxable under s. 212.03.

What I could not confirm

I did not confirm whether property taxes or CAM paid by a tenant counted as taxable rent under the former statute, so the $130.00 figure applies the tax to the whole payment as an illustration; a CPA can check what should have been taxed on a lease that predates October 2025 and whether a refund is owed. The repeal shows on flsenate.gov only as an absence from the 2025 chapter 212 index; the Department of Revenue publication is the confirming document. I collected no lease rate or vacancy statistics for either coast. The definitions of rent, CAM, base year and default in the lease you sign control, and a Florida real estate attorney should read them before you do.

The quoted rate is the starting point, not the rent. Ask for the lease type, the current year's expense estimate by category, the last reconciliation statement and the escalation clause, then run the table above with the building's real numbers.

Questions tenants and landlords ask about Florida commercial leases

Is Florida sales tax still charged on commercial rent?

Not for occupancy periods beginning on or after October 1, 2025. Section 212.031 was repealed by Chapter 2025-208 (HB 7031), and rent for periods through September 2025 remains taxable even if it is paid later.

What was the rate before the repeal?

The state rate was 2.0 percent from June 1, 2024, 4.5 percent from December 1, 2023, and 5.5 percent before that, according to Department of Revenue publications. County surtax applied on top of the state rate until the repeal.

What is the difference between a gross lease and a triple net lease?

In a gross lease the tenant pays a single all-inclusive rent and the landlord pays the operating expenses. In a NNN lease the tenant pays base rent plus its share of property taxes, insurance and common area maintenance.

How much notice ends a month to month commercial tenancy in Florida?

At least 15 days before the end of the monthly period under s. 83.03(3). Year to year takes at least 3 months, quarter to quarter at least 45 days, and week to week at least 7 days.

What notice must a commercial landlord give for unpaid rent before filing for removal?

Three days' written notice requiring payment of the rent or possession of the premises under s. 83.20(2). A 15 day notice applies to non-rent breaches only when the lease is silent or the tenancy is an oral tenancy at will.

What happens if a commercial tenant stays after the lease ends?

The tenant becomes a tenant at sufferance under s. 83.04, and the landlord may demand double the monthly rent under s. 83.06(1). Accepting rent alone does not renew the term; if the landlord consents in writing to the holdover, the tenancy becomes a tenancy at will under s. 83.04.

Talk with William. Looking at a space, or holding a lease you are not sure you understand? Send me the lease or the listing's rate sheet and the center's current expense estimate. I will go through the lease type, the pass-throughs and the escalation terms with you and help you frame the questions for your attorney and CPA. Call or text (772) 800-2274 or send a message.

General information, not legal, tax, lending, insurance, survey, environmental or engineering advice. Lease types are defined by the contract; I found no statute defining them; the repeal of s. 212.031 was confirmed from a Department of Revenue publication and the 2025 statute index rather than a repeal note; whether tenant-paid taxes and CAM were taxable rent under the former statute was not verified; and the rate steps before 5.5 percent rest on a law firm summary. Have a Florida real estate attorney read the lease and a CPA review the tax history. Statute and rule references are as reviewed on October 22, 2026. William Merchant, REALTOR®, RE/MAX Gold. Each RE/MAX office is independently owned and operated. Equal Housing Opportunity.

Sources

commercial leasetriple netcam chargesflorida rent taxchapter 83

William Merchant