Effective January 1, 2018
REVIEW YOUR LEASE(S) TODAY!
The state sales tax imposed on the total rent charged for renting, leasing, letting or granting a license to use real property is decreased from 6% to 5.8%. Some examples of real property rentals included commercial office or retail space, warehouses, and self-storage units or mini-warehouses. In addition to this 5.8% tax rate, a landlord must also collect the local option surtax, if any. There is no reduction in the rate of this local tax.
Note: the law specifically provides that the tax rate applicable to a rent payment is based on the date the property is occupied, not when the payment is due or paid. Therefore, you cannot take advantage of the lower rate by delaying rent payments until after December 31, 2017.
For landlords, this change in law means that leases may need to be amended to reflect the lower tax rate for occupancy after January 1, 2018. For leases that reflect pre-payments, there may be an overpayment of sales tax reflected in the payment if this change in rate was not taken into account before the payment.
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