Notable Tax Updates: What’s New in Florida, Arkansas, and Georgia

By: Jeff Glickman, SALT Partner

At a glance  

• The main takeaway: Florida repealed its sales tax on commercial real estate rentals, Arkansas enacted an income tax economic nexus rule, and Georgia amended its tax credit regulations to change the process for electing to use certain tax credits against payroll withholding tax. 
• Assess the impact: Understanding these new tax developments is crucial for businesses operating in these states to help ensure compliance and optimize their tax strategies. 
• Take the next step: Aprio’s State and Local Tax (SALT) team can advise your business on the impact of state tax law and regulatory changes.

Schedule a free consultation today!

In recent months, several notable tax developments have occurred in Florida, Arkansas, and Georgia. These include (i) a Florida tax bill that repeals sales tax on commercial real estate, (ii) Arkansas legislation that makes significant changes to the state’s income tax apportionment methodology and adopts an income tax nexus rule, and (iii) amendment to Georgia’s tax credit regulations.

In this article, we break down these state tax changes.

Florida Repealed the Sales Tax on Commercial Real Estate Rentals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 on rent payments from commercial real estate tenants. 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 tax reform bill HB 7031 (Chapter No. 2025-208) into law. One of the changes under this 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 that are charged after October 1, 2025, for a rental period prior to that date will still be subject to tax. Conversely, if a tenant prepays rent before October 1, 2025, for an occupancy period on or after that date, no tax will be due.

HB 7031 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 vehicle parking, boat docking, and aircraft hangar rentals.

For more information on the repeal and how it impacts landlords and tenants, please see Florida Tax Information Publication (TIP) No. 25A01-04, published on July 24, 2025.

Arkansas Enacted Changes to Income Tax Apportionment and Nexus Rules

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

Changes to Apportionment Rules

SB 567 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] The new legislation:

• 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, 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.

Adoption of a New Nexus Rule

This legislation creates 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 Adopted Amendments to its Tax Credit Regulations

Georgia finalized revisions to many tax credit regulations to better reflect prior legislative changes, such as updating the carryforward period that were reduced under legislation enacted in 2024.

One noteworthy change unrelated to any prior legislation concerns the process for electing to use tax credits against state payroll withholding tax in lieu of income tax. This option is available for a limited number of tax credits, including film/gaming, R&D, and certain jobs tax credit. Previously, taxpayers had to 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.

The bottom line

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.