Florida Villa Tax ?
The small Panhandle town of Destin, in Okaloosa County has just approved a new tourist tax that could, possibly have ramifications for short-term-rentals throughout Florida.
Currently all but 6 counties in Florida charge a tourist tax or ‘bed tax’ on short-term rentals of less than 6 months. The amount of the tax varies from county to county, but the bed tax for Orange County – which contains the Disney properties – In one month (January 2005) raised a whopping $9.9 million. However, the rules governing the way the tax is spent are very clear. The income from bed tax can only be spent on promoting further tourism and expenses related directly to tourism. Osceola County for instance is raising money for a convention centre which will attract more visitors, but the money may not be spent on improving infrastructure such as roads, schools etc. Destin has an estimated population just short of 12,000 residents. However, this can surge to as many as 37,000 on a daily basis thanks to tourists. This has put quite a strain on the local infrastructure and the citizens of Destin on March 8th voted overwhelmingly in favour (73%) for an additional 2% tax on top of the 4% tourist tax currently charged by the county. The estimated $3.26 million raised from this tax in the first year alone would be spent on roads, drainage and other infrastructural projects. The plan is to introduce a local bill to impose the extra tax. However, questions have been raised about the legality of introducing a tax payable only in Destin. If it were found to be unconstitutional to do so, then a general law permitting the tax throughout Florida would have to be sought. Whilst the likelihood of a general law raising taxes, being passed by the conservative legislature is thought to be slim – the possibility is there. Central Florida counties like Lake, Osceola and Polk, which have large short-term rental communities, and equally large community infrastructure needs such as schooling and road improvements must be watching the outcome of this case with close interest. A consultant is currently reviewing the City Charter to determine if the City Council can impose the new tax without a new State law.
Posted on 17 March 2005
