What Can We Learn From Bulgari Jewelers?

In 1984, the hoity-toity (yes that’s a legal term) Bulgari jewelry store, on 5^th Avenue in Manhattan, was raided by tax agents after a months-long sales tax evasion investigation. It was alleged that the Rome based jeweler helped celebrities like Henry Kissinger and Frank Sinatra evade sales tax by mailing empty boxes to out-of-state addresses and allowed their customers to claim they were exempt from NY sales tax even after leaving with the jewelry. Bulgari pleaded guilty and ended up paying $2M in fines and penalties (yikes!).

So, what can we learn from these designer tax dodgers?

We can talk all about Florida’s laws regarding the state sales tax on real property rent. If you didn’t know, landlords are responsible for collecting sales tax (2%) from their tenants and remitting it to the Florida Department of Revenue (DOR).

Long-term rentals: Florida does not charge sales tax on residential rentals for periods longer than six months.

Short-term (transient) rentals: Rentals for a period of six months or less are subject to state and local sales taxes. This includes vacation homes, apartments, hotel rooms, and mobile homes.

Commercial rental income: Effective October 1, 2025, the Florida sales tax imposed on rent or license fees for the use of real property (commercial rentals) is repealed. This means no state sales tax or discretionary sales surtax applies to rent or license fees for rental or occupancy periods beginning on or after October 1, 2025. Examples of commercial rentals subject to the repeal include rentals of commercial office or retail space, warehouses, and self-storage units. You’re welcome!

Exclusions: Even after the repeal, sales tax will continue to apply to certain commercial-related rentals, such as those for vehicle storage, boat docks, and aircraft hangars.

This does not mean that we no longer have property taxes, that’s a separate tax. We’re only talking about sales tax on your rentals. This also doesn’t mean that your rental income is not taxable, that’s a separate income tax, we’re only discussing sales tax.

Now, of course, and as always, you must first speak to your accountant before you stop paying taxes because you read it in a newsletter. But, you heard it here first (maybe), no more sales tax on your commercial rental income. Good times!