Florida lawmakers are making significant changes to how tourism tax dollars are allocated, attempting to balance property tax relief with tourism promotion needs. The Florida House recently approved a $5.008 billion tax package that includes a controversial proposal affecting the state’s “bed tax” – the tax collected on hotel stays.
- What: The bill (HB 7033) would redirect money raised through the hotel tax to offset property taxes beginning in 2026. This represents a major shift in how these funds have traditionally been used, as they typically support tourism marketing efforts throughout the state.
MEAGER PEACE OFFERING: However, the House made an amendment on Friday: 25 % of the bed tax money will still be allowed for tourism marketing. This compromise attempts to address concerns from industry stakeholders while still providing property tax relief.
Why the shift?
Representative Wyman Duggan, the Jacksonville Republican who chairs the House Ways & Means Committee, gave the reasoning behind the change: “We have a local, current affordability crisis. We want to provide as much as possible toward local-government property tax relief as we, the Legislature, can do legislatively this year.”
Pushback
Tourism industry representatives have strongly opposed these changes. The Florida Attractions Association released a statement claiming the House tax plan, along with another bill (HB 1221) also approved on Friday, “would have a profound effect on the tourism industry in Florida, devastating how tourism is promoted and supported.”
- Their concern centers on the potential reduction in marketing funds, which they believe could lead to Florida losing visitors, ultimately resulting in fewer jobs and decreased revenue for the state.
The Bigger Tax Picture
The House tax package goes beyond just tourism tax allocation. It proposes:
- Permanently reducing the state’s sales tax rate from 6% to 5.25%
- Reducing the commercial lease tax
Meanwhile, the Senate has put forward a different $1.83 billion proposal (SB 7034) that includes:
- Eliminating sales taxes on clothing and shoes costing $75 or less
- Providing a one-time credit on annual vehicle registration fees
- Offering several sales tax “holidays,” including a new one lasting over three months on hunting equipment
What’s Next?
The bill now moves to negotiations between the House and Senate as they work toward finalizing a new state budget. The differing approaches to tax relief between the chambers suggest challenging discussions ahead, with the tourism marketing funds representing one of several hurdles to overcome.
For Florida’s tourism-dependent communities, the outcome of these negotiations will have significant implications for how they market themselves to potential visitors while also addressing local property tax concerns.
Source: The News Service of Florida
Here is my interview with Visit Pensacola CEO Darien Schaefer earlier this week:
