‘Uncharted waters': Florida House, Senate eye sweeping changes to hotel tax

Yahoo

24-04-2025

TALLAHASSEE — A significant source of tax revenue for Orlando's tourism industry is in flux as the Florida House eyes using money collected from visitors to give homeowners a property tax break.
The House's tax package would transform the tourist development tax, defund the marketing agency Visit Orlando and upend a major means of financing entertainment and sporting venues like the Kia Center, home of the Orlando Magic.
The proposal calls for taking money collected from tourists and using it to provide Florida homeowners with a credit on their property tax bill. For tourist-rich Orange County, that change would affect roughly $360 million in annual tax revenue paid by visitors staying in hotels and short-term rentals.
'I'd say it's the most sweeping change in the TDT [tourist development tax] since Orange County first approved it,' Orange County Comptroller Phil Diamond said of the House's proposal. 'I think there are a lot of unknowns, and everything seems to be moving at the speed of sound. We're clearly in uncharted waters right now.'
Gov. Ron DeSantis has called for property tax relief, arguing he'd rather tax tourists than homeowners, though he and House and Senate leaders have not agreed on whether or how to do that.
DeSantis says 'Tax the tourists. Tax some of the foreigners.' to offset other revenue losses
Representatives of the tourism industry argue hotel tax revenue is vital to keep Florida competitive with other destinations and oppose the House plan.
The House's proposal is 'not a tax cut but a job killer,' Paul Beirnes, vice president of the the Amelia Island Convention & Visitors Bureau, told lawmakers at a Tuesday legislative hearing.
'Without marketing that we do so well, Florida will lose visitors, Florida will certainly lose jobs, and Florida will lose tax revenue as a result,' he said.
Meanwhile, two Orlando Democrats who have pushed for TDT reforms say counties need flexibility in how they use the revenue, whether that be funding mass transit projects or reducing property taxes.
House and Senate budget negotiators will hammer out the details in the final days of the legislative session, which is scheduled to end May 2.
Under the House's proposal, counties could use hotel tax revenue to continue paying debt for any projects started before July 1, or to fulfill contracts entered into as of Jan. 1, according to the proposal. But beginning with the 2026-27 budget year, the revenue must be used to offset county property taxes, less any outstanding debt payments.
That proposal also would dissolve tourist development councils, which are governing bodies responsible for attracting visitors. Generated by a 6% tax on hotel stays and short-term rentals, Orange County's tourist development tax revenue is used for Visit Orlando, the convention center, stadiums, arts venues and museums.
Orange County has a host of debt obligations backed by TDT funding that total hundreds of millions of dollars. That money is funding the expansion of the Orange County Convention Center, work to improve FBC Mortgage Stadium on the University of Central Florida 's campus and upgrades to the Kia Center and Camping World Stadium. It has been used to help build the Dr. Phillips Center for the Performing Arts and lure major events like the NFL Pro Bowl to the area.
This week, commissioners approved a combined $29 million in incentives to lure the Jacksonville Jaguars to play their 2027 season at Camping World Stadium, and for numerous combat sports events put on by TKO Group holdings — which owns World Wrestling Entertainment and the Ultimate Fighting Championship. Those events include Wrestlemania.
When Orange County voters approved imposing it in the late 1970s, one of the conditions was that property tax dollars couldn't be used to maintain the convention center. Without the TDT, Diamond said he isn't sure how the county could pay for upkeep, such as replacing the roof or conditioning units. Such expenses can total tens of millions of dollars in a year.
Orange County's lobbyist Mark Jeffries formally opposed the package in the hearing Tuesday but didn't speak.
The Senate's tax package would also disrupt the tourist development tax, although to a lesser extent than the House's plan. The Senate's proposal would ease a requirement that at least 40% of revenue be used for tourism advertising.
The measure, introduced by state Sen. Carlos Guillermo Smith, sets the mandatory spending requirement for tourism promotion to no more than $50 million, or about half of what is spent currently by Visit Orlando.
Smith, an Orlando Democrat, said the House's plan doesn't provide enough flexibility to local government. He wants tourist tax revenue to be shifted away from tourism advertising to expanding SunRail.
'The House proposal is extreme and would weaken our ability to fund tourism-related needs in Central Florida,' he said. 'Counties must have the flexibility to invest more in destination infrastructure, including transportation, workforce housing, and public safety, and less on wasteful corporate tourism ads.'
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State Rep. Anna Eskamani, D-Orlando, said her focus will be toward securing reform 'that grants flexibility while maintaining local control.'
Orange County Commissioner Kelly Semrad said the Senate proposal would be a boon for the county, freeing up at least some of the lucrative bed tax to be spent on improving transportation to the benefit of both visitors and residents.
'I think that this is a win,' she said. 'Ultimately, these are billion-dollar corporations and this is a public tax and this public tax needs to benefit the public.'
Semrad, an associate professor at UCF's Rosen College of Hospitality Management, said she supports legislation that gives counties flexibility to use the tax money on local needs like affordable housing, transit and combatting homelessness.
She's skeptical of the House proposal, which instead allows the money to replace a portion of property taxes.
'That doesn't add up to me,' she said.
The proposal could change as negotiations unfold, said state Rep. Wyman Duggan, who introduced the bill. The Jacksonville Republican said lawmakers are looking for 'innovative' ways to provide immediate property tax relief.
'The cake is not baked,' he said at Tuesday's hearing. 'There is a long way to go.'