Judge rules Tampa taxing hotel visitors illegally

A circuit court judge has ruled that a hotel room surcharge — collected by the city of Tampa on top of its existing maxed-out bed tax — is an “illegal tax,” according to a spokesperson for the Florida House, which sued the city over the $1.50-per-night fee two years ago.

The House Speaker at the time, Republican Richard Corcoran of Land O’Lakes, set out to stop the city from collecting a special “marketing fee” on each room night after a WTSP-TV report spotlighted the controversial charges, created by Tampa in 2017 to generate new revenue for tourism marketing. State law prohibits a city or county from taxing hotel guests more than 5 or 6 cents on the dollar, depending on the county’s annual tourism figures.

Attorneys from GrayRobinson, representing the city of Tampa, argued the case lacked merit, for the $1.50-per-night charge was a “fee,” and not a “tax.” They also accused Corcoran of assaulting “home rule powers.” But the case proceeded for the last two years, even as Corcoran was succeeded as Speaker by Rep. José Oliva, a Miami Lakes Republican.

Judge Rex Barbus announced the state’s motion for summary judgment would be approved last Thursday, according to the House spokesperson. The state successfully argued that a per-night fee on hotel stays was a charge on an activity that varies over time, and therefore, a tax that was never authorized by the Legislature.

The case could impact the ability of all Florida cities and counties to create similar taxing districts, including one that had been discussed by Tampa and Hillsborough County for a new Rays stadium or entertainment complex in Ybor City.

It is not clear what happens to the approximately $3 million dollars collected in marketing surcharges by the 13 hotels in the Downtown Tampa and Ybor City special district.

The Hillsborough County Hotel and Motel Association (HCHMA) managed the marketing money but did not respond to a request for comment. City of Tampa spokesperson Ashley Bauman declined to comment because the formal order has not yet been filed. The city will have 30 days to appeal the ruling once it is finalized.

Hillsborough tourism officials said in 2017 they needed more money for marketing, but most of the existing bed tax collections were already committed to existing marketing programs or stadium debt for the Bucs, Yankees, and Lightning. The county later raised its bed tax from five cents on the dollar to six cents after it became the state’s ninth “high impact” tourism county, reaching $600 million in taxable hotel revenue last year.