Gabrielle Russon
The House passed a tax package Friday that could shake up counties’ hotel tax funding.
Republicans said the significant changes would save taxpayers money and offer immediate property tax relief, while many lawmakers argued the proposed reform would defund local counties. The bill also faces staunch opposition from the tourism and hospitality industry.
Under the latest version of HB 7033, 75% of a county’s tourist development tax (TDT) would be redirected to lower property taxes starting in 2026, while counties could decide how to spend the remaining 25% on tourism advertising, public transit, and any other needs, said House Ways and Means Committee Chair Rep. Wyman Duggan during Friday’s debate.
Counties would also choose whether the state-mandated property tax relief was aimed at residential or commercial properties, or both, said Duggan, a Jacksonville Republican.
For a community like Orange County, home of the Mouse, that means local officials would get about $93 million in their coffers to spend at their discretion, based on last year’s TDT figures and the 25% math, Duggan said.
One Orlando Democrat argued it wasn’t enough.
“$90 million is not going to help pay for the continuous expansion of our convention center, where we have 1.6 million visitors a year,” shot back Rep. Bruce Antone. “We are doing a $400 million expansion on our football stadium, a $200 million expansion on the performance art center, and a $100 million expansion on UCF. … Now I’m not necessarily one to stand up and defend tourism development tax spending, but in this case, this is the lifeline. This is the backbone of our tourism industry. And we need these dollars to continue to market tourism around the world.”
The bill passed with a 78-29 vote on the House Floor after stopping in one Committee this week.
Originally, the bill had sought to apply 100% of TDT revenue for property tax relief, but Duggan’s amendment on the House floor Friday changed it to a 75% limit.
Calculations from the bill’s original version showed about $700 in savings for homeowners in Orange County. However, Duggan warned that this would be less now that his bill had been tweaked to require only 75% of the TDT revenue for property tax relief. That would also require the Orange County Board of Commissioners to target homestead exemptions, rather than other properties, for relief.
Democratic Rep. Anna Eskamani from Orlando, where the 6% surcharge on hotels and short-term stays generated $364 million last year, pushed Duggan on why he settled for a 75-25 ratio with the new changes.
Duggan said he initially considered giving counties control of only 10% before settling on 25%.
Under the House tax plan, property tax relief would also be applied after counties cover debt or bond payments from TDT-funded projects, such as in counties with large ongoing capital projects, like stadiums or convention centers.
The TDT currently funds beach refurbishment projects, local arts events, and more across Florida.
The undermanned Democrats failed to pass an amendment on Friday to transfer all TDT funding into a county’s general fund, where the millions could help communities with law enforcement, public transportation, or other needs resulting from being a mega-tourist town. That way, Democrats argued, it would also give local officials complete control and flexibility to make their own decisions.
Meanwhile, the hotel and tourism industry is fighting to keep the TDT revenue status quo, as Curtis Crider, president and CEO of the Greater Miami and the Beaches Hotel Association, argued that tourism marketing has fueled Florida’s economy over the years and played a role in bringing visitors back to the Sunshine State afterhurricanes, the pandemic, and other disasters.
Eskamani raised concerns: What if tourism shrinks?
“Is this the right time for us to be considering dramatic shifts in taxation when there’s a lot of uncertainty before us?” Eskamani said.
Duggan argued Floridians already feel uncertainty about their finances.
“What we are trying to solve for here with the redirection of the TDT revenues is a way to provide some affordability relief within our control as legislators by July 1, 2025,” Duggan countered.
The House and Senate tax packages both offer TDT reform, although their approaches vary widely.
The Senate’s version, SPB 7034, incorporates a provision from Sen. Carlos Guillermo Smith, an Orlando Democrat, that would free up big-tourism counties like Orange to spend the hotel tax on other needs. Current law requires counties to spend at least 40% of TDT revenue on advertising; however, Smith also wants to limit the amount spent on advertising to $50 million or less.
Friday’s debate about the House tax package centered around TDT, but the package also proposed several other sweeping changes, including lowering the 6% state general sales tax rate to 5.25% (which the House previously approved earlier this Session). The bill seeks to repeal the aviation fuel tax, add a new affordable housing exemption for select multi-family housing projects, and authorize municipalities to exempt preschools from special assessments. Another change would allow taxpayers appealing their property assessments at the Value Adjustment Board (VAB) to appear by phone or video conference.
