House tax amendment calls for big changes to TDT funding

In tourist-rich Florida, local government officials and legislators scrambled Monday to understand the implications of a proposed House tax amendment that would override tourism development tax statutes by allowing counties to tap into that money for general uses while property taxes are cut.

Under a newly published amendment to a tax package (HB 7033), counties would no longer be required to spend at least 40% of their tourist development taxes (TDT) on commercials and tourism advertisements. Tourist development councils would get dissolved by the end of 2025.

Rep. Lawrence McClure, the House budget committee chair, clarified VISIT FLORIDA would not be eliminated with the county-level tourism councils.

Counties could use the TDT to complete any projects or contracts already under way as of July 1, the amendment said.

“Any such contracts may not be renewed or extended,” it also said. “Bonds or other debt outstanding as of July 1, 2025, may be refinanced, but the duration of such debt may not be extended and the outstanding principal may not be increased, except to account for costs of issuance.”

Destinations Florida Executive Director Robert Skrob said the amendment is not a cost-saving tool, rather “an act of economic sabotage.”

“This proposal gambles with the livelihoods of more than 2 million Floridians, from hotel workers to small business owners, and risks collapsing the tax base that makes Florida’s income tax-free status possible,” he said in a statement. 

Destinations Florida, the state’s association serving local tourism promotion organizations, laid out math that calls the House’s calculous into question, pointing to tourist development taxes’ use on bringing visitors and their spending to Florida. Tourists pay sales tax, gas tax and bed taxes on hotel and motel stays, money that supports schools, infrastructure, public safety and more. The group pointed out that tourism development taxes statewide account for just $1.8 billion, while nearly $16 billion in property taxes are levied. The group said the current proposal offers minimal offset, but risks devastating fiscal losses. 

The House Budget Committee is scheduled to debate the issue at its upcoming 3:30 p.m. Tuesday meeting.

Some counties generate far more TDT revenue than others, so the proposal could have wide-ranging consequences.

In Orange County — home of Disney World — the 6% surcharge on all short-term rentals and hotels generated $364 million in 2024. Much of that money goes to Visit Orlando, which advertises the region, and to paying for the Orange County Convention Center.

“I am in favor of flexibility, but historically oppose preemption. I need to see the math on this in more detail before I can make a final decision,” said Rep. Anna Eskamani, an Orlando Democrat who had been one of the voices calling for TDT money to be spent on community needs, such as public transportation and affordable housing.

Orange County government affairs also is analyzing the House proposal, spokeswoman Jane Watrel said.

Eric Gray, who served on the the county’s TDT citizen advisory task force and is running for Orange County Commission, called the tax proposal “insane” and “truly one of the most ridiculous pieces of legislation I’ve ever read.”

He said he feared counties would be forced to lower property taxes by the amount of TDT they collect, nullifying the impact of the TDT “flexibility” in the first place, he said, pointing out in a tourism economy like Orlando, millions of visitors drive on the roads, use the water and solid waste system and require a beefed-up police presence.

Meanwhile, on the Senate side, Sen. Carlos Guillermo Smith’s proposal to allow TDT to be be spent on public transportation and other needs was added into a larger tax package (SB 7034).

“For decades, corporate tourism executives have controlled how billions in public dollars are spent while community needs are left underfunded. TDT reforms are long overdue, and counties must have the flexibility to use tax revenue to invest in destination infrastructure including transportation, workforce housing, and public safety,” Smith, an Orlando Democrat, said in statement when reached for comment Monday night on the House tax amendment. “I’m encouraged to see the Legislature fully engaged in this discussion and look forward to continued negotiations that advance the priorities of Central Florida.”

Florida Politics reached out to Visit Orlando for comment Monday and did not get a response.