How To Ensure You Don't Pay Florida Tourist Development Tax
Have you recently received a letter from the Leon County Tax Collector, advising you to pay a Florida Tourist Development Tax?
If you are a real estate investor in Florida, and you own residential investment properties, you should be aware of this tax.
Fortunately, the tourist development tax only applies to the rental of living quarters or accommodations for a term of six months or less, and thus has been nicknamed the “bed tax.”
I received an email yesterday from a long-time friend and client who wrote:
Joe, I got a letter from the Leon County Tax Collector this weekend. The topic was Tourist Development Tax Registration. I have attached the document, but I think the basic message is that Florida taxes revenue from rental properties and I may need to register... JB
Tourist Development Tax - The "Bed Tax"
The document that was attached to the letter explained:
Pursuant to sections 125.1014 and 212, Florida Statutes, Tourist Development tax is to be charged by owners and operators of facilities on the revenue of their rentals that are for a term of six months or less.So how do you know if it applies to you?
Who Is Subject To The Tourist Development Tax?
This is very simple. If you ever lease a property for six months or less, you need to register to pay this tax. My friend owns rental properties in Leon County, but his are long-term rentals that go for periods of one year or longer. He does not have to pay the tourist development tax.
Tourist Development Tax Tip
If you own Florida residential investment properties and have a property manager who handles the leasing and management, then there will be times when somebody is going to want a six month lease and you will be in a position to want to accept it. Here's what you do.
Have your property manager execute a one-year lease, allowing for the tenant to terminate early after the sixth month. Give the tenant the right to terminate prior to the end of the leasing period, providing the tenant gives written notice of the intent to terminate 30 days prior to the termination date.
This will ensure that you go beyond the six month point and not be subject to the tourist development tax.
If you are unsure as to whether you need to register and/or pay the tourist development tax, you can contact the Leon County Tax Collector's office at (850) 488-4735.
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