The Tax Cuts and Jobs Act provides a tax break for businesses conducted by pass-through entities (partnerships, LLCs and Subchapter S corporations) which will allow a deduction of 20 percent of the business income, so that the owners will pay tax on only 80 percent of the business income. But this tax break is not available to the owners of professional service businesses, like lawyers, accountants, physician, dentists and consultants, unless their total taxable income is less than $157,500 (or $315,000 for married taxpayers). Many tax advisers around the country are telling their professional service clients to spin-off the real estate used in their practice that is owned by the business, and charge rent to their practices. This would shift income from their professional practice (not eligible for the 20-percent deduction) to their separate office leasing business, which would be eligible for the tax break. Although this technique will be viable in most every state, it will not work in Florida because of the structure of our sales tax here.

Florida is one of the only states in the U.S. which imposes its sales tax on commercial real estate leases (Arizona is the other notable exception). The sales tax is due on all leases, even on a lease to related parties. The sales tax due on the lease will likely exceed the potential income tax savings resulting from the 20-percent deduction.