-->
MENUMENU
(954) 474-1776 |   |       |  Click Here to Receive our Free Market Report

Archives

Florida Is the Only State to Tax Commercial Leases

Florida Is the Only State to Tax Commercial Leases on morrissegroup.com

Politicians, business owners, realtors, and lobbyists are all baffled

While this notoriety can be blamed on ease of access to police blotters thanks to the state’s open records law, there’s another item that is uniquely Florida: We are the only state that imposes a sales tax on commercial leases.

The monetary benefit of the Business Rent Tax

Written into the state’s tax code in the late ‘60s, the Business Rent Tax (BRT) means businesses must pay a 6% state sales tax on their rent and any added costs to that lease, such as property taxes, maintenance fees, and insurance costs. On top of this, local governments can add an additional 1.5%.

In terms of the bottom line, the tax generates a lot of money for Florida. While the bulk of state revenue comes from the state sales tax, about $25 billion dollars in fiscal year 2015-2016, the BRT also contributes its share. Current estimates place the amount at $1.7 billion dollars, with a projection of $2 billion dollars by 2020.

These numbers are important to keep in mind since Florida’s constitution prohibits a personal income tax and we are state with many needs.

How the business rent tax hurts the state

Those opposed to the tax, including Governor Rick Scott, Florida TaxWatch, and the Florida Chamber of Commerce, believe the BRT puts Florida at a unique disadvantage. With the tax in place, there is little incentive for businesses to relocate to Florida.

For smaller businesses and start-ups, there is a disproportionate financial hardship. Some local retailers, for example, could pay more than $100,000 a year in taxes on their leases. Not only do these costs lead to a sluggish economy and suppressed job growth, the costs are passed down to consumers.

Florida realtors also oppose the BRT

Not surprisingly, the BRT hurts commercial real estate in Florida. Small businesses with limited capital, for example, are less likely to expand and more likely to lease spaces too small for their needs. They’re also less likely to hire employees and to provide competitive salaries for staff.

Florida Realtors has added its voice to that of the Governor and other groups to begin cutting the BRT. The organization’s findings indicate that in the first year of a complete repeal of the BRT, 185,000 jobs would be created and there would be a $20 billion economic impact.

Florida sits in the middle, and that’s unacceptable

To further illustrate the impact the BRT is having on the state, one only has to look at various rankings. Florida’s business ranking – determined by competitiveness, business costs, labor supply and other factors – placed the state in 13th place in Site Selection magazine and in 22nd place by Forbes.

In 2016, a small business friendliness survey placed Florida 15th among 35 states. That’s a B minus. Texas received an A plus, and neighboring Georgia, an A. In other words, businesses are more likely to turn to those states for opportunities, rather than the Sunshine State.

Morris Southeast Group responds to the BRT

For more than 25 years, Ken Morris has been dealing with the impact of the BRT on the commercial real estate market. It has been a headwind; stifling growth, innovation, and jobs. While the state, at the moment, may not be in a financial position to enact a complete repeal of the tax, it is in a position to begin reducing the tax so businesses and the Florida economy can grow and be competitive with other states.

It is our belief that Florida has so much to offer businesses – from our beautiful climate to cultural enrichment; from vibrant communities to a strong and eager workforce.

For a free consultation about commercial real estate opportunities in the area, contact Morris Southeast Group at 954.474.1776 or reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com

The Common Sense of Common Space

The Common Sense of Common Space on morrissegroup.com

Finding collaboration and innovation with free Wi-Fi, a cup of coffee, and a game

Today’s office is all about space – and how to best utilize space that’s often shrinking and more expensive. There’s open space and space dedicated to focused individual work, small group space and larger meeting space, shared space and co-location space.

With an emphasis on flexibility, productivity, and cost-effectiveness, it only makes sense for the office common space – also known as the break room – to undergo its own evolution.

Mobility and the incredible shrinking office

Over the past decade, the office footprint has gotten smaller as the result of new styles of working, tech advances, higher costs, and a younger, more mobile workforce.

It’s the idea of mobility, though, that has really pushed the idea of the smaller office. So long as there’s an Internet connection, employees can work from the field or from the local coffeehouse. Less time in the office means less need for individual offices and a greater need for plug-in locations for those day or hours when employees are in-house.

While the open floor plan has had its own issues – too many distractions, for instance – the layout has helped companies realize that informal gatherings of people can often result in some of the greatest and most inspiring ideas and problem-solving opportunities.

Maximizing a smaller space

The key to increasing productivity in a smaller space is that many office areas now need to perform double duty. For companies and designers, this has led to a shift in how the break room can be better utilized. By reframing it as a common space, it’s now able to offer a reprieve from work while also encouraging a fresh approach to ideas.

Several recent studies have looked into why so many mobile workers choose to work from a coffeehouse. Findings indicate that:

  • Moderate levels of ambient noise (the sound of a cappuccino machine) improve performance on creative tasks;
  • Being around other people working hard (on laptops in a coffeehouse) sparks individuals to work harder.

Creating a common space that works

Armed with this knowledge, companies and designers have created spaces that closely resemble coffeehouses or lounges. There’s stylish seating, plenty of tables for group or individual work, Wi-Fi, healthy snacks, coffee, and, perhaps a tabletop game or two.

By bringing the coffeehouse in-house, companies are experiencing a Field of Dreams moment. If you build it, they will come.

In this case, “they” is more than just employees. Clients are also tending to linger in the common space after a meeting or before heading to the airport to take advantage of the atmosphere, to interact with employees, and to even hold meetings with their own clients.

For the companies, smart common spaces are a way to maximize their real estate investment. The common space is an additional work location option for employees and it’s a social place in which company culture and, in some cases, products are highlighted. Clients not only gain better insight into the company with which they’re doing business, but they also have an opportunity to interact with the materials they’re interested in purchasing.

Size doesn’t always matter in the new office

When it comes to today’s office space, companies have had to make adjustments to meet both changing needs and the bottom line. The good news is that with smart design that focuses on double duty, productivity, flexibility, and efficiency, smaller spaces can accomplish big results.

Morris Southeast Group is one of the top commercial real estate brokers in South Florida, and we are available to help you meet the needs of your growing company, no matter if you need more space, new space, or any space. For a free consultation, contact our team today at 954-474-1776. You can also reach Ken Morris directly at 954.240.4400 or via email at kenmorris@morrissegroup.com.

Listings

Follow us on Twitter