Posted: Sep 20, 2018
Florida Business Rent Tax Scholarship Program

During the last Florida legislative session a new bill House Bill (HB) was passed and signed into law that allows any tenant that pays a rental or licensee fee that is subject to a business rent tax to make a voluntary donation to a nonprofit scholarship-funding organization which then places that voluntary donation in to a scholarship fund that helps educate children with special needs.  The tenant receives a 100% credit in the amount donated to offset the tenant’s tax liability. This law is known as HB 7055 and became active on July 1st. By voluntarily directing any portion of the business rent taxes (that you have to pay anyway) into this program you will be helping children with special needs or limited incomes to attend first-rate Key West schools. Good idea!

House Bill 7055

HB 7055 is a broad education bill that addresses several education-related matters. Included, is a measure that allows businesses paying the Business Rent Tax (Sales and Use Tax on the Rental, Lease, or License to Use Commercial Real Property) to take a 100% credit against those taxes contributed to a non-profit scholarship funding organization.  Instead of paying the full Sales and Use Tax to the State, the tenant can make a up to !00% contribution to a nonprofit scholarship-funding organization.  A dollar for dollar credit is received for that amount contributed, thereby reducing the tenant’s total tax liability. Note:  Florida sales and use tax rate is 5.8%.  Monroe County surtax is 1.5%.  But only the Florida sales and use tax rate can be used.

 

The state-wide program is capped at $57.5 million. Contributions will first be used to fund Gardiner Scholarships for students with special needs.  Remaining funds will be used for the Florida Tax Credit Scholarship Program for students based on financial need.

 

The Gardiner Scholarship, begun in January 2016, allows parents to personalize the education of their children who have unique abilities/special mental or physical needs.  Money can be directed toward a combination of programs and approved providers. These include schools, therapists, specialists, curriculum, technology – even a college savings account.

 

The Florida Legislature created the Florida Tax Credit Scholarship Program in 2001. The law provides for state tax credits for contributions to nonprofit scholarship funding organizations, (SFOs). The SFOs then award scholarships to eligible children of low-income families.

 

One such nonprofit scholarship funding organization (SFO) is Step Up For Students.  Step Up traces its roots to 1998 when the Children’s Scholarship Fund of Tampa Bay was formed.  This fund provided privately funded scholarships for low-income children to attend a K-8 school of their choice. Step Up For Children serves over 106,000 students in over 1800 private schools.

 

Schools in Key West

 

 

 

Step Up For Students presently works with three schools In Key West.  The three schools that participate in the Florida Tax Credit and Gardiner Scholarship programs are:

 

  1. Grace Lutheran School
  2. Montessori Children's School
  3. The Basilica School of St. Mary Star of the Sea

 

 

 

Who is eligible to make this contribution?

 

Tenants of commercial rental properties are eligible to apply for an allocation under the new Florida Sales Tax Credit Scholarship Program. This program authorizes the tenant to receive a dollar-for-dollar credit against the state Sales and Use Tax due, equal to the contributions paid to an eligible nonprofit scholarship-funding organization (SFO). Tenants must apply with the Florida Department of Revenue to receive approval to participate in the program.

 

Go to the Florida Department of Revenue to fill out an online application. After filling out and submitting the application, the Florida Department of Revenue will send a letter to you authorizing you to participate in the program.

 

Then What?

 

Its simple:

 

  1. Fill out the online application, including the Name of Eligible NonProfit-Funding Organization and Planned Contribution Amount.  This dollar ($) amount can be up to 100% of your projected tax due.
  2. The Florida Department of Revenue will send an authorization letter to you authorizing the dollar amount you can contribute to the nonprofit-funding organization.
  3. At tax time, send this dollar amount Directly to the scholarship funding organization (SFO).
  4. The scholarship funding organization sends a letter back to you acknowledging your donation.
  5. Give a copy of the Florida Department of Revenue letter and the letter from the scholarship funding organization to the property owner.
  6. The property owner submits both of these letters to the State when they submit their taxes.

 

Conclusion

 

There is ZERO increase in anyone's tax bill as a result of participating in this voluntary program. All that is happening is a small exercise in redirecting where your tax bill goes - to helping local kids with special needs get a good education.

 

I recommend both tenant and property owner discuss and coordinate this opportunity before applying so there are no surprises. Plus, many property owners own multiple rental properties so when one tenant notifies their landlord of this opportunity, the landlord could spread the news to other tenants for a larger overall contribution.

 

One final note. In fiscal year 2018 - 2019 the donated and redirected taxes will only go toward low-income students via the Florida Tax Credit (FTC) Scholarship.  Thereafter, redirected taxes will first go to the Gardiner Scholarship and then to the FTC Scholarship.

 

Your tax dollars at work in a way that you choose!  Many, many thanks for helping me research this article to:

 

  • Wendy Woolley, Step Up for Students, Tampa, FL
  • Kevin Ireland, New Business Development, Florida Realtors
  • Tom Butler, Public Policy Communications Director, Florida Realtor
  • French Brown, Dean/Mead, Attorneys at Law, Tallahassee, FL

 

If you have any coments or questions, please contact me here.

 

Good luck!

 

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