Florida’s commercial rent tax is gone, a repeal the Institute on Taxation and Economic Policy estimates will cost the state close to $1 billion a year in revenue it won’t be collecting from businesses anymore. New York and New Jersey’s corporate tax bills are not gone. Between those two facts sits a real dollar gap commercial investors can run for themselves, using nothing but four states’ published tax schedules.
Corporate Income Tax Alone Splits Four States
New York taxes corporate business income at 6.5 percent for most filers, rising to 7.25 percent on income above $5 million, a temporary rate first imposed in 2021 and extended through the 2026 tax year.New Jersey runs higher still: an 11.5 percent top marginal rate, the highest in the country, built from a 9 percent base corporate business tax plus a 2.5 percent surcharge on large employers that state lawmakers have repeatedly extended rather than let expire. Florida sits well below both at 5.5 percent. Nevada charges no corporate income tax at all.
On $6 million of taxable business income, that spread alone works out to $435,000 owed in New York, $690,000 in New Jersey, $330,000 in Florida, and zero in Nevada, before a single property tax bill enters the picture.
Property Tax Widens the Gap Further
Property tax follows a similar pattern.New York’s average effective property tax rate sits at 1.30 percent.New Jersey’s runs higher still, at 2.11 percent, among the highest of any state in the country. Florida’s runs closer to 0.78 percent. Nevada’s sits at just 0.47 percent, seventh lowest in the nation, a rate protected in part by a state law capping how much a property tax bill can climb from one year to the next. None of these numbers are averages pulled from a survey. They’re the published rates a title company would run for any commercial buyer asking, before the wire ever leaves the escrow account.
Applied to a $5 million commercial property, that difference adds $65,000 a year in New York, $105,500 in New Jersey, $39,000 in Florida, and $23,500 in Nevada.
One Portfolio, Four States
Put both numbers together for an illustrative mid-size investor holding a $5 million commercial property that generates $6 million in annual taxable business income, and the same portfolio produces four very different annual state tax bills. In New Jersey, corporate income tax and property tax combined come to roughly $795,500 a year. In New York, the combined total runs $500,000. In Florida, it lands near $369,000. In Nevada, it drops to about $23,500.
That gap runs into real money: the kind that shows up as a different number on the return an investor actually files, not a rounding error buried in a spreadsheet.
Nevada carries one caveat this comparison leaves out: a Commerce Tax applies to businesses with more than $4 million in Nevada-sourced gross revenue, at rates that vary by industry and run from roughly 0.05 percent to 0.33 percent. For a real estate or leasing business, that tax adds a few thousand dollars at most on top of the property tax bill above. It doesn’t come close to closing the gap with New York or New Jersey.
None of these figures require an investor to guess. Every rate is published by the taxing state itself, which is exactly why the same math shows up, deal after deal, in the calculations commercial buyers run before they decide which zip code holds their next acquisition.
