Bay County TDC Approves Bed Tax Increase

by December 17, 2008 • 12 comments

In a meeting that ended in great applause, the Bay County Tourist Development Council unanimously voted to approve the increase in bed tax collections from 3% to 5%.  With public comment from pillars of the Panama City Beach community, such as Charlie Hilton, Julian Bennett, Julie Hilton and Joe Tannehill, good arguments were made for and against the increase with a unified concern for our area.

The motion to approve suggested that one penny go towards marketing, including helping attract a low-cost carrier.  Half of the second new cent would go to beach cleaning, safety awareness and signage throughout the beach.  The second half of the second new cent will go to capital projects such as new ball fields at Frank Brown Park or the proposed improvements to Aaron Bessant Park in Pier Park.

“I think we should delay, not defeat the 5th cent increase,” Bennett Sr. said discussing that we need to put together a comprehensive plan as to how the 5th sent will be spent.

“We need to work on collecting what we have,” said Julie Hilton, “before we try and get more.”

Joe Tannehill, chairman of the Airport Authority board was the first to comment during the public comment portion of the meeting.  He voiced his support of the bed tax increase and assured the board and confirmed to the board and the audience that the airport was ahead of schedule and under budget.  He stressed that essential to the area’s success was the success of the airport and essential to the airport’s success was getting the word out to the rest of the country that we are open for business.

He emphasized that a growing number of travelers to our area will be from out of the country, but we need marketing dollars to underscore that effort. He also confirmed discussions with British Airways and Virgin Atlantic.

Peter Yesawich from YPartnership presented on why we need to increase our bed tax stressing that any increase had no direct impact on his firm or his firm’s relationship with the Panama City Beach Convention and Visitors Bureau.

His presentation explained that we had advertising budgets that were 1/2 and 1/3 of that of our direct competitors.  He also stressed that we needed to have a vehicle in place to support the new airport and any low-cost airline that may come into our area.  He mentioned that these are perilous times for the airline industry and that any airline would find great comfort knowing they had some financial support here in Panama City Beach.  His presentation explicated the importance of having a harmonious allocation of marketing dollars and capital improvement dollars.

Yesawich said that our future visitors are not “legacy visitors” or those returning to our area, but new visitors.  He explained that we need to expand our marketing reach to outside our traditional market and that we need a broader visitor base.

Buddy Wilkes, owner of Shipwreck Island Waterpark underscored this point in saying that we’ve lost our legacy visitors already and that we must focus on new customers.

There has been much discussion elsewhere and here on pcbdaily that we need to work harder to collect the rent collectors that aren’t paying instead of trying to raise the tax.  I agree and disagree with this.

We need to change our collection process and the way it is enforced.  Actually, that is a false statement.  We need to enforce the bed tax collection as right now, it is not being enforced at all.  What happens to those that do not collect?  Nothing.  Period.  So, how do they figure out who is collecting rent, but not paying the bed tax?  I don’t know, but there are smart people than me that can figure this all out, and it needs to happen, NOW.

Bill Kinsall, Bay County Clerk-elect reassured the board and audience during the public comment section that he would do everything in his power to make their collection process and research to who isn’t paying more efficient.  He said the whole process will be under scrutiny and they will figure out how to fix the system.

Julie Hilton mentioned that she thought that we may be seeing 50% of the total possible bed tax revenue due to people not paying and that an increase may push more to not pay.  I cannot speculate on the number, but I totally agree with her in that the number is probably larger than we think.  We need to figure out a way to determine this.  I also think we need to enable some sort of enforced consequence to be imposed on those that do not pay.

Yes, we need a very comprehensive plan to exactly how we’ll spend each penny of the increase, yes we need to figure out how to collect from who isn’t paying right now, but we also need more money to be sure we are ready to spread the word about Panama City Beach to the world when the new airport comes online.  We also need to be sure we continue to improve our area at the same rate our competition is improving their areas, or we will become a has-been.

The argument that if we increase our rates that we’ll lose tourists just isn’t valid.  An increase of 2% will yeild an increase in room rates of $20 for a week’s stay at $1000.  Is someone going to be deterred by this?  No.  Will they even know about the change?  No.  Tourists don’t ask what tax rate they are paying and they aren’t going to change their mind for a measly 2%.

Good job TDC, Bay County Commissioners, please take heed, we need this for our area.

Related:  Bed Tax Increase Set in Motion

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1 Jim December 23, 2008 at 7:31 am

Did the Board mention the effective date of the tax increase?

I disagree with the statement indicating tourists don’t realize what tax they are now paying and won’t know about the change. In today’s world customers are looking at every penny. What an awful time to propose a tax increase. Elections have been lost just for this reason.


2 Jason Koertge December 23, 2008 at 8:51 am

Jim, the increase next needs to go in front of the County Commission before it is passed.


3 Mike December 23, 2008 at 10:55 am

I am brand new to PCB as a renter and a “hope to be” owner. I have always stayed for vacation in Destin but came to PCB, after hearing about the Ocean Reef auction, to look at properties for sale that might be better buys than condos in Destin. I will not say “who” or “where” publicly, but I’m here to tell you that a lot of people that rent condos in PCB are looking for a “cash” transaction, which I’m sure we all know what that means. I doubt that any Bed Tax is being turned in on those transactions.

If I purchase a property in PCB, I plan on renting it for a few years. If I know that collecting the bed tax will improve the area and cause my property to be rented more, I will be happy to collect & pay the tax. If I knew that I would be fined or convicted of a crime for not collecting the tax, there would not even be a temptation of renting without the payment of the tax.

In coming to PCB from Destin, the first thing I noticed (my wife was really concerned) that it was really a poor looking beach with all the vacant properties, old properties and just overall appearance, with the exception of the new properties that look great. We drove to the East end of the beach, where all the nicer properties were supposed to be that were in a quieter area. When we got to the East End, it was REAALLYY old and looked even more like a ghost town. And the roads were terrible. We commented that we may want to head back to Destin and forget about PCB.

But, luckily the first thing I did was to look online and I found the website for PCBDaily and began reading about the things you guys have going on here. And after reading (a lot), my wife and I decided that it appeared that things were changing here and that PCB really did have it together and had some plans to make things much better.
And knowing that, I have no problem with the taxes or the slight increase that just passed. I payed the taxes everywhere I ever stayed in Destin and Long Boat Key (many stays over the last 30 years). It always costs me more to stay in Destin than it does the few times I’ve stayed in PCB (and I’ve paid the bed tax every time). But what we like about PCB is that there always seems to be something going on and activity. And for buying a vacation home on the beach, PCB is a bargain compared to Destin.

Anyway… you’ve got to have the tax and you have got to find a way to collect it, because the beaches need to be improved even more to keep up with competition for tourism.
Being a NEWBIE, I would first think about Mystery Shoppers and a HUGE fine if caught not collecting and PAYING the taxes. That should be a very cheap way to get it started. Heck, you might even offer a $100 rebate (bounty) to the mystery shopper if they catch a crook!
If a rental management company gets caught, then probably then their license should be suspended. But on the second offense, their license should be cancelled. They should also be charged with the crime of “PCB Bed Tax Evasion” (if that is possible).
I would think that if each property owner and rental agency knew that they would be cited and criminally charged if caught, and a huge fine followed conviction along with a lien on the property until paid, and that it was strictly enforced, there should not be much problem and a lot more bed taxes coming in.
I’m all for it and keep up the good work. I hope to join you guys as an owner one day soon.


4 Edw Mackus December 23, 2008 at 1:02 pm

Any tax increase is a very bad policy. The public is
smart enough to stay away from places that have many
different types of taxes.

Airport ,rental car, hotel sales taxes all add up.

When we fly west we always try to stay away from places such as Phoenix because of their add on taxes. The same will be
the results at Panama City. After all Pensacola is not
far away from Panama City. And we just might loose these
people to Destin and Fort Walton Beach.

No BED Tax increase Do not listen to the free spending


5 Mike December 23, 2008 at 1:31 pm

From what I see on VRBO for the “Taxes” charges….
Nivarre, Okaloosa Island, Destin, South Walton West & East, are all 10%, 10.5%, 11%. If PCB is higher, they need to make sure the tourists will see and experience the difference. If not, then the tax needs to stay in line with them.


6 Mike December 23, 2008 at 1:56 pm

Also, from my experience, I have also paid more for rent in Destin and surroundings because of the difference in the property prices. I have seen an average of $50 to $100 per week difference in the rental amounts for similar lodgings, PCB being cheaper than Destin.

When I came here to look at properties, I could see why. Comparable 2/2 condos in PCB were selling for $275,000 to $375,000 where during the same period in Destin, they were selling from $375,000 to $525,000.

This past October, the rental amounts I checked for similar properties were averaging about $850 to $1,000 per week in Destin and about $750 to $850 in PCB.

By my calculations if PCB is at 12% total Tax and Destin is at 10% total tax, but the rent at PCB is $50 less, the total rent in Panama City Beach is still close to $40 less, including taxes.

So, I think people are not going to quit coming to PCB because of taxes. I think they are going to make their decisions based more on activities, attractions, (or lack thereof), restaurants, events, entertainment…. etc, rather than a rent increase of $15. Especially with the great rental prices here in PCB compared to other nearby beaches.


7 Chris December 23, 2008 at 6:58 pm

From the main article, I agree with Julie Hilton’s comment that there probably is a very large number of people who are not paying this tax but who should be. If this is true, then the solution is NOT to increase the tax but rather to collect all the taxes that are due. My point is, if this is done, then there is NO NEED to increase the tax! Further burdening those who are paying the tax is putting them at a competitive disadvantage to those who do not pay this tax.

I talked with Charlene from the Bay County Clerk of Courts who is responsible for administering the TDC Bed Tax. From my conversation with her, this tax is not very well enforced. Its main method of adding new people to the TDC Tax database is for people to volunteer. They should get the list of people who rent on owner rental websites like, etc. and cross reference their current list of TDC Tax payers against this list.

Jason, I believe you make the comment that the tax increase will not deter tourists from coming to PCB. This is true only because they will not be the ones eating the tax increase. The people who own and rent their condos will eat the tax. It has nothing to do with the tourists not caring about an extra 2%. With the amount of competition that exists in PCB, this tax increase cannot be passed onto tourists. They will simple go down the beach to the lower priced condo. This increase will directly hit me for $500+. 2% is NOT a piddly amount that can easily be dismissed.

For those of you who would like to know more about the “Bed Tax” or who want to voice their disgust at raising taxes in these economic times, the web-site is:

Bay County Clerk of Courts
Tourist Development Tax
PO BOX 1230
Panama City, FL 32402
Phone: 850-747-5226
Fax: 850-747-5188


8 tom December 23, 2008 at 8:28 pm

Mike,,,,what you are telling me is that the owners are absorbing the loss. That is true. I had units in FWB and Destin and the income at PBC is very low compared to those sites. Our condo prices in PCB will never improve until our rates improve. PCB needs help even if it costs us 2% increase at this time. We need to clean up Front Beach Rd immediately and make PCB a desirable destination for tourists. Outside of the new condo buildings, PCB is a pretty ugly place.


9 Jim December 24, 2008 at 10:20 am

I don’t really believe that the TDC should be spending anything on advertising, based on the cost of the PCB White Sale this past year.

I’m sure the Airport authorities have capable people to advertise for them.

We as owners are already advertising the area and successfully I might add. With two little condos for rent, we spend about $1500 a year on advertising the area and our units. There are another 1000 people doing the same thing. Everyone in the area is benefitting from our dollars spent on advertising. Perhaps they could reduce our bed taxes with the 2%.

I disagree with Mr. Yesawich. The Legacy visitors, that he refers to, are the backbone of our vacation rentals. They are people who have come to the area since they were children. They and their children now, are coming to enjoy the area. If we don’t run them off with excessive taxes, their grandchildren will return also.

And now the TDC thinks it can top this? And at the owners expense?

Those of you who think that 2% means nothing will be sadly mistaken. Do the addition. We are now charging 10% in the city. 12% of a $1000 vacation is not a petty amount.


10 Kirk Lancaster December 29, 2008 at 10:39 am

Great report from the meeting, Jason, and great comments from the bed tax collectors on this post.

Jim’s comment above hits the biggest nail on the head, regarding advertising. The TDC/CVB brags that the Summer White Sale was a successful investment. But numbers prove it was a terrible investment, as described at

When the CVB put out a press release that the Summer White Sale “won awards,” that’s when I realized there’s no reasoning with this group. We are on totally different planes when it comes to marketing, advertising, and business values in general. Ad agencies submit everything they do to their own member-organizations to create fake awards so they can tell their clients “our work for you is so great, it won awards.

More bed tax could be used to make Bay County cleaner, safer, and to build a better product with sports fields, outdoor arenas, etc. But the way our TDC/CVB has proven to waste advertising dollars, and the fact that our economy is really tanking, I’m hoping that this idea has to go back to the drawing board for a year or two. Or until they find a way to collect from every renter.

Jason, do you have a date on the County Commissioners Meeting where this will be on the agenda?


11 John December 30, 2008 at 7:23 pm

This would be a good time for Bay county commissioners to pile on to the huge increase in property tax revenue just extracted? Condo owners paid for and drive all the new property that is the vision of PCB. We are having enough trouble attracting and keeping capital from these owners who are the lifeblood of hope for a NEW face of PCB. This out of line tax sends a bad message that Bay County commisioners are leading the pack in a grab for the out of town owner’s dollar. To risk a reputation characterized by “just can’t find any money to clean the beaches or be safe” is penny wise and pound foolish. Rental companies, airlines and owners will spend much more than TDC on advertising. Let’s hope comissioners will focus on their reputation and the roulette they are playing with the perception of those that would make our dreams come true.