TAMPA, Fla. -- Following a 10Investigates story exposing how the City of Tampa was allowing downtown and Ybor City hotels to get around the state’s cap on how much tourists can be taxed when checking out of a hotel room, Speaker of the House, Richard Corcoran, is suing the city of Tampa, calling the city’s new marketing fee an “illegal tax.” The Speaker’s office said the lawsuit would be filed Thursday.
A dozen hotels in Downtown Tampa and Ybor City began charging the $1.50 per night fee this summer to boost marketing efforts. The fees were approved unanimously by city council, and are expected to give local hotels more than $1.5 million per year for a fund, controlled by the Hillsborough County Hotel and Motel Association (HCHMA).
HCHMA Executive Director Bob Morrison insisted the charge was a special assessment district “fee,” allowable under Florida state statutes, and not a “tax.” He also said he hoped to expand it across the county to compliment Visit Tampa Bay’s marketing efforts.
But Corcoran’s suit claims Visit Tampa Bay has already received $55 million from the county for marketing in the last six years, and spent $140,000 of it funding the HCHMA’s efforts to convince Tampa City Council to approve the new fee.
When 10Investigates asked why the marketing funds were not simply built into room rates and taken out of hotel revenues, Morrison said, “every little bit helps.” Local hotels also get to spend the money however they’d like, only having to submit an annual report to city council for re-approval of the collections. Hotels do not pay taxes on the millions collected from local tourists.
"Certainly, what (the 12 hotels) could have done, is just raise rates $1.50 per night per room and spend the money that way, independently," said Bob Morrison, executive director of the HCHMA. "But they said, if we collectively pool our resources, we're going to be stronger and the destination is going to be better."
Morrison said the more the city and county spend on marketing and tourist-driving events, the more money out-of-towners will spend at Tampa-area businesses.
Hillsborough County could allocate more of its existing bed tax revenues – approximately $30 million total per year - to marketing, but a large portion of it is already committed to stadiums for the Bucs, Lightning, and Yankees. And future revenue growth is believed to be earmarked for a potential new Rays stadium.
10Investigates has reached out to the HCHMA and City of Tampa for comment but has not heard back yet.
