TALHASSEE – The Florida home approved a major overhaul of the hotel tax on Friday. This could have a widespread impact on Orlando and the local tourism industry.
The House plan transforms tourism development taxes, requiring that 75% of revenues will be spent on property tax relief from 2026.
Shakeups need approval to continue to approve from the Senate and governor, and while they are all promoting tax relief, they are in conflict over how to cut tax bills for Florida.
The changes apply statewide, but are especially felt in Orlando, the world’s theme park capital and megatourism destination.
Orange County collected about $360 million in hotel tax last year from the 6% tax on hotel rooms and short-term rental nights. Historically, revenue has been spent on marketing organizations visiting Orlando, building and expanding convention centers and sports and arts venues.
Hotel taxes are used for everything from the construction of the Kia Center, the Orlando Magic home, to seducing WrestleMania in Central Florida.
Under the new House plan, Orange County will spend around $93 million in hotel taxes, but the rest will opt for property tax relief. Duggan’s predictions do not assume any variation in the collection.
Two Central Florida representatives warned on Friday that refunds from tourism marketing organizations would have dire consequences. Rep. Bruce Anton said the change would “harm Central Florida,” and also argued that the expansion of the convention center would require money.
“This is the backbone of our tourism industry,” Orlando Democrats said. “We need these dollars to continue selling tourism around the world.”
Democrat Leonard Spencer, a former Disney executive at Gotha, said the tax change would be “a very costly mistake.”
The legislature is looking for ways to make the state more affordable, said Duggan, chairman of the House Ways and Means Committee.
Duggan amended the proposal to reduce the requirement that all hotel tax revenues be spent on property tax relief, allowing the county to use a quarter of the money. This measure will allow hotel taxes to continue to be used on existing project liabilities.
“It’s designed as an innovative approach to help local governments provide property tax relief that flows to our citizens,” Duggan said.
The county will decide which properties will receive tax cuts, Duggan said. Local officials may decide to apply it to permanent residence, businesses, or all property only.
If applied only to permanent residency, he estimated that the initial proposal would save the average Orange County homeowner about $700. He added that Friday’s revision would reduce the amount if the county could keep some of the money.
Democrats have tried to amend the tax package so that the county could decide how to use all hotel tax money, whether it’s a public project or property tax relief.
An increase in councils of Rep. Anna Eskamani, D-Orlando and local officials have increased the flexibility to spend on tourism development taxes. Under existing law, at least 40% of people need to go to tourist advertising.
They argue that a growing pool of money should be available to support local needs such as transportation, affordable housing and public safety costs associated with tourism.
In the end, Eskamani voted against the House tax package.
The Senate tax system facilitates Orange County’s marketing spending requirements of less than $50 million, or about half of what was spent on visits.
Orange County Commissioner Mera Uribe said the council hopes local officials will determine what’s best for their community. She said she wanted to use her revenue to offset some of the problems that come with being a top tourist destination, such as roads stuck near attractions.
“They use our roads and contribute zero,” she said. “All I’ve ever wanted was to be able to spend some of that money on transportation.”
Original issue: April 25th, 2025, 3:50pm EDT
