Lawmakers consider changing TDT taxes, which angers tourist industry

Image via AP.

House lawmakers are mulling over whether to reform the tourist development tax (TDT) and require voter approval every six years which is drawing ire from the tourism industry.

“There’s so many things the TDT touches and I don’t think legislators know,” said Philip McDaniel, the CEO of the St. Augustine Distillery who also serves on Visit Florida’s Board of Directors. “I honestly think they don’t fully understand the impact of what they’re talking about.”

But House Ways and Means Committee Chair Stan McClain is pushing to reform the TDT, as he said the tax is more lucrative than ever. In Orange County, where Mickey Mouse is king, the local TDT generates $30 million in one month alone for the 6% surcharge on hotel rooms, for example.

“Just from a perspective of allowing the taxpayers to have an opportunity to understand what the TDT tax is and how it’s being used, I think, is important,” McClain said during a Feb. 14 discussion on TDT that was part of a larger tax bill (PCB WMC 24-05). 

Under the proposed changes, counties not using the tax funds to issue bonds would be required to get voter approval every six years to renew the TDT. The 31 counties issuing debt from TDT proceeds would be required to pay off the debt first before gaining voter approval.

The hotel taxes throughout the state pay for marketing, cultural festivals and expansions at major arts and sports venues. Other counties use the proceeds for beach refurbishment and other projects to drum up tourism. The magic of the bed tax? It’s paid by visitors but benefits the locals, McDaniel said.

One Representative expressed concern about the financial hit potentially taking away TDT would leave on local governments.

“We’re using it to cover some of the beach refurbishment projects in Lee County — especially those after Hurricane Ian,” said Rep. Spencer Roach, a Republican from Fort Myers. “If the TDT goes away, that tax burden gets shifted to the county residents.”

But McClain warned that change is needed as some local governments are pushing to spend the bed tax money on other community issues unrelated to tourism.

“As I’ve sat in this seat for a couple of years, there has been a continuous onslaught of requests to use the TDT tax in ways that are not currently allowable in statute,” the Republican from Ocala said.

Orange County is rocked by skyrocketing housing prices, underfunded public transit and crowded roads. An ongoing local debate is whether the county can use some of its TDT money to pay for the community’s other needs. 

“Our service economy creates an environment where a lot of our best and brightest workers who deliver the most magical experiences struggle to have a roof over their head and food on their table,” said Rep. Anna Eskamani, a Democrat from Orlando, who unsuccessfully pushed to amend the bill to allow more spending on affordable housing.

Other counties have pushed to spend the hotel tax on law enforcement.

Meanwhile, tourism advocates warned requiring six-year voter-approved renewals will have a far-reaching effect. 

Communities could miss out on major projects because they wouldn’t be able to pursue anything with a bonding period beyond six years, said Samantha Padgett, Vice President of Government Relations for the Florida Restaurant and Lodging Association.

Jennifer Fennell, the spokeswoman for Destinations Florida, which promotes the state’s tourism industry, also criticized the legislation.

“Mandating local referendums every six years to reapprove tourist development taxes puts every entity that relies on those local tax collections into jeopardy. This bill kills local tourism promotion by making retaining staff and vendors impossible. Who will take a job that could be sunset every six years?”