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What is TDT and how are Central Florida counties using it?

Photo: Sharon McCutcheon
Photo: Sharon McCutcheon

Breaking down TDT

Tourism Development Taxes, or TDT, is a tax on hotel stays and other short term rentals that are 6 months or less, enacted in 1978.

The tax varies up to 6% from county to county across Florida.

“So when you look at your hotel bill, and you see all these other fees that pop up your TDT will be one of them,” said Randall Croom, Associate Professor of Management at Stetson University.

Orange County collects the largest share of TDT of all the counties in Florida, according to the Orange County government.

Croom said there are multiple factors that play into Orange County’s TDT, like the county collecting the max 6% compared to 3% or 4% in other counties.

“In addition to that, the amount of tourist attractions here in Central Florida, that attracts people, not only in our state and country, but also internationally, including the theme parks like Disney, which has a real international reputation,” he said.

The money collected from TDT can only be used for tourism promotion, the convention center, and sports facilities.

“This money can only be used for certain things, which has become a little bit of a point of contention for some people, particularly as the revenues generated from TDT have grown,” said Croom.

The state of Florida sets the parameters of what local governments can use TDT for, but in Orange County, Mayor Jerry Demings created a TDT Citizens Advisory Task Force in an effort to have more community input into how the money is used.

“For the first time in 45 years, he tried to open it up to the community,” said Croom. “But even these recommendations still need to be approved by the Orange County Board of County Commissioners.”

Allocating & Measuring

Orange County collected $359 million in tourism development taxes in fiscal year 2023.

In October, county commissioners voted to spend $10 million a year for the next 9 years for a new football stadium tower at the University of Central Florida.

But, Croom said, “it might be difficult for me to say whether or not an expansion, fresh paint, or refurbishing and revamping the way meeting rooms look has a direct correlation in the short term year to year on economic impacts. However, you could imagine that over a longer time horizon that these investments probably do, generate some returns.”

The Orange County Convention Center hosts more than 230 events annually, contributing more than $2 billion to the local economy each year.

Similar to Orange County, Volusia County collects 6% of TDT, which was more than $16.5 million in fiscal year 2023.

The Ocean Center Convention Center receives 3% of Volusia’s TDT, with the remaining being divided among the local tourism marketing authorities, according to the county.

“For example, in Volusia, you would have some that focus on West Volusia, some that focus on the Daytona Beach area, as tourists and special event sorts of destinations,” said Croom.

Is there a better way to spend TDT?

Whether TDT money is being spent correctly in Central Florida counties depends on who you ask, said Croom.

“People might say that even though our economy is diversifying, we really do depend quite a bit on tourism,” he said. “And the funds allocated to promote and encourage tourism are very often money well spent given the long tail economic impacts of tourism.”

However, Croom said tourism dollars can fluctuate year over year, due to natural disasters, leap years, and events like the COVID pandemic.

“So there could be some problems with choosing to allocate money extremely differently based on these recent large increases because those large increases may not be sustainable,” he said. “Even something as small as the month in which a holiday falls can influence revenue.”

Croom said an analysis of what the various needs are to market the state and Central Florida, while taking into account the needs of residents could help.

“Remember, the revenues from these taxes are not just paid for by people coming out of the state or out of the country,” said Croom. “They are also paid for by local people, some of whom are going to staycation or who are renting an Airbnb so they can be closer to downtown for a game that weekend.”

After a brief stint as Morning Edition Producer at The Public’s Radio in Rhode Island, Talia Blake returned to Central Florida Public Media. She is a graduate of the University of Central Florida with degrees in both Broadcast Journalism and Psychology. While at UCF, she was an intern for Central Florida’s public affairs show, Intersection. She joined on as Morning Edition Host in 2019. In 2022, Ms. Blake was appointed to the Florida Association of Broadcast Journalist’s board of directors.
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