The TaxWatch Research Blog

The TaxWatch Research Blog is a forum where our research staff can address topics and issues in a short format. Keep an eye on this space during Legislative Session for frequent posts making sense of the activity at the Capitol. 

Diverting Tourist Development Tax Revenue

Florida Shouldn’t “Eat Our Seed Corn” by Diverting Tourist Development Tax Revenue

Tourist Development Taxes (TDTs) play a vital role in Florida counties’ promotion of tourism in their areas. Over the years, the Legislature has added more and more authorized uses of this revenue, diluting the funding available for tourism promotion and advertising. During the 2020 session, efforts to further expanded the authorized uses are continuing. The “slippery slope” warning raised by the tourism industry and Florida TaxWatch in the past has become a reality. 

In 1977, the Legislature passed the Local Option Tourist Development Act, which allowed counties to levy a one or two percent sales tax on “transient rentals”—hotels, motels, resorts, or any other living accommodation for a term of six months or less. The proceeds could be used: 

1) to promote and advertise tourism in Florida, nationally, and internationally; 
2) to acquire, construct, improve, operate and maintain publicly owned convention centers, sports stadiums and arenas, coliseums, or auditoriums; and 
3) to fund convention bureaus, tourist bureaus, and tourist information centers. 

Since then, four other levies have been enacted: an additional one percent TDT, two separate one percent Professional Sports Franchise Facility Taxes, and a one percent High Tourism Impact Tax. There are now five TDTs that raise just over $1 billion for local tourism promotion. Depending on a county’s eligibility, tax rates vary from a minimum of three percent to a maximum of six percent. Sixty-three of Florida’s 67 counties levy some combination of TDTs. 

The authorized uses of TDT revenue have also expanded. In addition to the original three uses, TDTs can now be used for: zoos; beach park facilities; beach, channel, estuary, or lagoon improvements; erosion control; restoration of lakes and rivers; fishing piers; nature centers; auditoriums operated by non-profits; emergency medical and law enforcement services (coastal counties); and professional sports franchise and spring training facilities. 

Counties may also use TDTs for major capital improvements, including land acquisition, for public facilities including transportation, sewer, solid waste, drainage, potable water, and pedestrian facilities, if they are “needed to increase tourist-related business activities.” Not all the above uses are available to all counties. 


Documents to download

  • TDTBrief(.pdf, 261.87 KB) - 1203 download(s)

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