Tallahassee, Fla. – Florida TaxWatch (FTW) President and CEO Jeff Kottkamp today presented a report, Tourism In Central Florida: Why Tourist Development Tax Revenue Should Not Be Diverted, before members of the International Drive Resort Area Chamber of Commerce. FTW undertakes this independent research project to analyze the importance of tourist development tax (TDT) to Central Florida’s economy.

To capture the impacts of visitor spending in Orange County, Florida TaxWatch utilizes the IMPLAN economic model, and estimates the fiscal impacts (sales, TDT, and property tax revenues) of the International Drive corridor during FY 2024-25 at approximately $1.8 billion. The fiscal impacts of tourism on Orange County are estimated at just under $2.7 billion.

Florida TaxWatch has consistently emphasized the importance of tourism as an economic powerhouse for Florida’s economy. As highlighted in today’s report, the investment of TDT revenue in tourism marketing has had a profound impact on the economy of Central Florida, generating nearly $76 billion in economic activity and supporting over 472,000 jobs annually in Orange County alone. These investments are also efficient methods at generating economic activity, as $1 of TDT revenues can turn into between $34 and $103 of activity.

Florida TaxWatch President and CEO Jeff Kottkamp said, “Over the years, the Florida Legislature has added more and more authorized uses of the TDT revenue, diluting the funding available for tourism promotion and advertising. To remain competitive and sustain Florida’s share of the U.S. tourism market, Florida must continue to invest in tourism marketing and promotion to ensure when tourists begin to plan their next vacation, they think first of Florida.

“Dedicated funding sources like TDT revenue are crucial to bringing tourists into the state. Diverting funds away from tourism marketing efforts has proven harmful to other states across the nation. Florida TaxWatch recommends the Legislature not approve any measure that permits local governments divert the use of TDT-generated revenue from tourism marketing to support other activities.”

The five largest counties by TDT collection—Orange, Broward, Pinellas, Palm Beach, and Osceola— accounted for almost 60 percent of all TDT revenue in Florida in 2024. Within the top five TDT-generating counties, Orange County collected far more than any other county. Of the total collections in Orange County, the I-Drive district collected $153 million in TDT revenue, accounting for approximately 43 percent of TDT revenue in the County.

In 1977, the Florida Legislature passed the Local Option Tourist Development Act, which allowed counties to levy a one or two percent sales tax on “transient rentals,” defined as hotels, motels, resorts, or any other living accommodation for a term of six months or less. Four other levies have been enacted since then: an additional one percent TDT; two separate one percent Professional Sports Franchise Facility Taxes; and a one percent High Impact Tourism Tax. In Florida, 64 of the 67 counties levy some combination of the TDTs.

Initially, there were only three authorized uses of the TDT: (1) to promote and advertise tourism in Florida; (2) to construct, operate, or improve publicly owned convention centers, stadiums, colosseums or auditoriums; and (3) to fund convention bureaus, tourist bureaus, and tourist information centers. As more TDT levies have been placed, the authorized uses of TDT revenue have also expanded. TDT revenue usage was expanded to include zoos, aquariums, beach facilities, and other facilities directly related to tourism.

In 2018, usage was expanded to include capital improvements in public facilities, including land acquisition, transportation, water and sewage, solid waste, potable water, and pedestrian facilities related to tourism. The additional authorized uses of TDT revenue can only be used if: (1) there is two-thirds vote approving such use by the county governing body; (2) the TDT may not pay more than 70 percent of the project; and (3) at least 40 percent of all TDT revenue must first be allocated to the promotion and allocation of tourism.

The complete report may be found here.

About Florida TaxWatch
As an independent, nonpartisan, nonprofit government watchdog and taxpayer research institute, and the trusted “eyes and ears” of Florida taxpayers for more than 47 years, Florida TaxWatch (FTW) works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on taxpayers and businesses. FTW is supported by its membership via voluntary, tax-deductible donations and private grants. Donations provide a solid, lasting foundation that has enabled FTW to bring about a more effective, responsive government that is more accountable to, and productive for, the taxpayers it has served since 1979. For more information, please visit www.floridataxwatch.org.

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