Notable State Tax Developments in Florida, Arkansas, and Georgia

By: Jeff Glickman, SALT Partner

Below is a summary of a few notable state tax developments in Florida, Arkansas, and Georgia.

Florida – Repeal of Sales Tax on Commercial Real Estate Rentals

One of the unique elements of Florida’s sales tax rules is that the state requires landlords to collect sales tax from tenants on commercial real estate rent payments.  Over the last several years, the state has reduced the sales tax rate, which currently sits at 2%.

On June 30, 2025, Governor Ron DeSantis signed HB 7031 (Chapter No. 2025-208), a tax reform bill.  One of the changes made by the legislation is the repeal of this sales tax obligation, effective October 1, 2025.

Since the sales tax collected relates to the occupancy period, any rent payments are charged after October 1, 2025, for a rental period prior to that date are still subject to tax.  Conversely, if a tenant prepays rent prior to October 1, 2025, and the related occupancy period is on or after that date, no tax will be due.

This legislation does not impact sales tax on other types of rentals that are imposed by other sections of Florida law.  Examples include short-term residential rentals, as well as vehicle parking, boat docking, and aircraft hangar rentals.

Arkansas – Income Tax Changes

On April 16, 2025, Arkansas Governor Sarah Huckabee Sanders signed into law SB 567 (Act 719), which makes several changes to the state’s income tax that will impact both corporations and partnerships for tax years beginning on or after January 1, 2026, relating to apportionment and nexus.

Apportionment – The legislation amends certain provisions relating to apportionment to bring the state’s apportionment rules more in line with the 2015 version of the Uniform Division for Tax Purposes Act (UDITPA).[1]

• Replaces the old definition of “business income” with a more expansive definition of “apportionable income.”
• Sales of other than tangible personal property will now be sourced using market-based sourcing rules and eliminating the old “income-producing activity” sourcing method.
• Provides additional guidance regarding the process for taxpayers to request or for the state to require the use of alternative apportionment methods.

Nexus – The legislation adopts a new income tax “economic nexus” rule that states:

The income of a nonresident corporation or partnership with no physical presence in the state through real or personal property, employees, agents, representatives, or otherwise shall be subject to [income tax] if the nonresident’s Arkansas receipts under [the state’s apportionment rules] exceed two hundred fifty thousand dollars ($250,000) for the current or the immediately preceding tax year.

Georgia – Amendments to Tax Credit Regulations

Georgia published revisions to many of its tax credit regulations so that those regulations reflect prior legislative changes, for example, updating the carryforward period for many tax credits that were reduced under legislation enacted in 2024.

One additional noteworthy change concerns the process for electing to use tax credits against state payroll withholding tax in lieu of income tax, which is available for a limited number of tax credits, including film/gaming, R&D, and certain jobs tax credit.  Previously, that process required that a taxpayer make an election to utilize tax credits against payroll withholding tax through the Georgia Tax Center (GTC) “within thirty (30) days after the due date of the Georgia income tax return (including extensions) or within thirty (30) days after the filing of a timely filed Georgia income tax return, whichever occurs first.”

Effective for tax credits claimed for tax years beginning on or after January 1, 2025, taxpayers may now make the election at any time within the three-year statute of limitations period for that tax year.  The election is irrevocable and “may only be made one time with respect to each tax year for which the credit is earned for such tax year, for all or part of the excess tax credit remaining at the time of the election.”

This change should provide more flexibility for taxpayers deciding how to utilize their Georgia tax credits.  Note that for taxpayers still filing their 2024 tax year returns, the old 30-day rule still applies.

Aprio’s SALT team can help your business understand the impact of these new state tax rules.  We constantly monitor these and other important state tax topics, and we will include any significant developments in future issues of the Aprio SALT Newsletter.

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[1] UDITPA is a model set of income tax allocation and apportionment rules adopted by the Multistate Tax Commission, an intergovernmental state tax agency whose mission is to promote uniform and consistent tax policy and administration among the states, assist taxpayers in achieving compliance with existing tax laws, and advocate for state and local sovereignty in the development of tax policy.  Many states incorporate some or all of these model rules into their income tax statutes.