Issue Brief: HB 7031 and Southwest Florida Taxable Sales
March 27, 2026 / RERI Research Team
Issue Brief: HB 7031 and Southwest Florida Taxable Sales
On October 1, 2025, Florida HB 7031 went into effect for the state. The house bill repealed the imposition of sales tax on commercial lease rental payments, ending a long-standing practice that set Florida apart from most other states that do not tax commercial leases. This bill is viewed as a way of providing relief to commercial tenants statewide by making office, industrial and retail space more affordable and business friendly. Because this bill removes commercial rents from the base of transactions subject to Florida’s sales tax, this means that lease payments made by businesses for commercial space no longer must be reported to the Florida Department of Revenue (FDOR). This introduces a structural break into the data that must be accounted for when interpreting trends.
In this issue brief, we examine how the recent enactment of HB 7031 may affect aggregate taxable sales measures for the region. We use taxable sales data available from the FDOR website and adjust it for inflation using the “All Urban Consumers” Consumer Price Index. All dollar values reported in this issue brief are represented in 2022 dollars. We then seasonally adjust the real values using the X13-ARIMA-SEATS seasonal adjustment model, provided by the U.S. Census Bureau. From there, we provide a breakdown of taxable sales by various industry groupings and analyze how reliant taxable sales are on various sectors.
Results from the issue brief find that seasonally adjusted real taxable sales for the region have steadily declined for 34 of the past 36 months, with more pronounced dips featured from November 2025 to January 2026. Moreover, we find that while taxable sales from commercial rents declined substantially, the region also saw modest declines across other major industries over the past year. Overall, we find seasonally adjusted real taxable sales continued to decline over the past three months, even when commercial rents are excluded. Southwest Florida continues to face genuine downward pressure across multiple sectors of the economy.
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Issue Brief: HB 7031 and Southwest Florida Taxable Sales
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