Tourism tax money could make Niceville aquatic center a reality

How much money are we talking?

For years, visitors to the Emerald Coast have been subject to a tourist development tax if they stay in a short-term rental such as a condo or hotel. The proceeds from these tax dollars have helped to expand and improve public parks, the local convention center, and other facilities and infrastructure that attract and support tourism.

In previous years, the tourist development taxing district was limited to the south end of Okaloosa County, where the majority of tourists flock to the area’s beaches. Since March 1, 2022, however, that taxing district has expanded to include all of Okaloosa County, including the Niceville/Bluewater Bay area. As a result, visitors who stay in local short-term rentals are now subject to what is commonly known as the “bed tax.”

Currently, visitors to short-term rentals in the Niceville/Bluewater Bay area pay a 5 percent bed tax. On March 6, 2025, that tax will increase to 6 percent.

What does the tourism tax mean for Niceville resident's wallets?

The city of Niceville and the other municipalities outside of the original taxing district have entered into an interlocal agreement that allows the proceeds from these tax dollars to be spent on tourism development projects within their collection areas. In Niceville’s case, that could translate into a revenue source for the construction of the much-anticipated area aquatic center.

“Tourism development dollars have to be used on tourism projects, and the Niceville City Council has indicated that it would like to see our share of the funds be used to help construct an aquatic center in partnership with the other cities and Walton County,” said Mayor Daniel Henkel. “The aquatic center would be an attraction for tourists that could benefit local residents as well.”

The aquatic center, which is currently in the planning stages, would potentially feature:

a 50-meter x 25-yard, eight-lane competition pool, 8-foot depth, outdoor heated, Myrtha designed pool.
• 25-meter x 25-yard flexible pool which could be enclosed and used as a heated training pool.
• A zero entry to 4-foot splash pool with splash pad.
• An adjacent 12-foot – 16-foot deep diving, surface and sub-surface, well.
• Large decks with abundant shade, including spectator bleachers.
• A building to house administration, training, locker rooms with individual showers, lounge, and snack bar.
• Parking for both cars and buses.

Proponents of the aquatic center point to the fact that it would be the only publicly accessible facility of its kind between Pensacola and Tallahassee and would provide off-season economic benefits to local businesses.

Currently, visitors to short-term rentals in the Niceville/Bluewater Bay area pay a 5 percent bed tax. On March 6, 2025, that tax will increase to 6 percent.

How much money does the bed tax generate?

Since bed tax collections began in March 2022, Niceville’s share of the receipts has totaled $565,320, with $227,820 collected during Fiscal Year 2022, and $337,500 so far in Fiscal Year 2023. While that’s a long way from the $15 to $20 million estimated cost of the aquatic center, it’s not the only source of revenue that planners are considering.

“There are a number of sources of funding available, including tourist development grant money, Triumph Gulf Coast money, as well as other state and federal grants,” said Dr. Bill McCartney, the author of a feasibility study commissioned for the project. “Operations and maintenance costs would be covered by user fees.”

While the aquatic center is the city’s main focus for tourist development dollars at present, Mayor Daniel Henkel said that other projects could eventually benefit from the funding as well.

“We are also looking at some projects in our Community Redevelopment Area, such as the Niceville Landing park on Boggy Bayou,” he said.