Insurance proceeds for rent loss are not subject to sales tax in Florida
With the many hurricane loss claims in recent years in Florida, there is some confusion about whether insurance claims proceeds for lost rent on commercial rental properties must be reported on your monthly Sales and Use Tax Return (Form DR-15).
Sales tax must be paid on all considerations due and payable by the tenant or other person actually occupying, using, or entitled to use any real property to his landlord or other person for the privilege of use, occupancy, or the right to use or occupy any real property for any purpose.
Therefore, because the insurance claims proceeds for lost rent are not paid to the landlord for the privilege of use, occupancy, or the right to use or occupy the commercial property, the proceeds are not subject to sales tax, and are not required to be reported as commercial rent on Form DR-15.
If you own commercial property in Florida, and have any questions about the tax implications of owning that property, please contact a ShindelRock tax professional.