Tourist development tax — Sebastian, Florida

Every short-term rental in Sebastian, from a riverfront condo on Indian River Drive to a Highlands vacation home, owes Indian River County's 5% tourist development tax (Indian River County Clerk).

The tax applies to accommodations rented for six months or less, and the Clerk of the Circuit Court and Comptroller describes it as an add-on tax and must be paid in addition to state sales tax. In practice a guest at a Sebastian motel on U.S. 1 or a short-term rental near the Indian River Lagoon pays the county's 5% bed tax plus the 7% state sales tax on the same rent (Clerk of Court).

The money is not City of Sebastian revenue. Indian River County levies the tax countywide under Ordinance 1987-11, approved January 27, 1987, which called for a referendum, set up the taxing district and appointed the first council (Indian River County). Sebastian, home to 25,759 residents in the U.S. Census Bureau ACS 2023, takes part through a seat on the Tourist Development Council and through the beaches, markers and promotion the tax pays for. Vero Beach 32963 reported in June 2025 that the barrier island east of the Indian River Lagoon is where the lion's share of county tourism revenue originates (Vero Beach 32963).

Last verified: October 10, 2026, on the Indian River County website.

Owners of Sebastian rentals, or their agents, collect the tax from guests and send it to the Indian River County Clerk of Court, not to Sebastian City Hall (Indian River County Clerk).

The Clerk's rules are specific. A return is due on or before the 20th of the month following the month of collection, and a Sebastian owner who rents only from January through March still files a zero return for the other months unless the account is put on inactive status in writing. Late or missing returns draw penalties of 10% or $50.00, whichever is greater, under Florida Statute 212.12 (Clerk of Court).

Owners keep a small share for doing the work: the Clerk allows a collection allowance of 2.5% of the tax collected with a maximum allowance of $30 per return. Tourist tax records must be kept for three years for audit. A Sebastian renter with a bona fide written lease longer than six months is exempt, and a renter with no lease becomes exempt in the seventh month at the same address, without a refund of the first six months (Indian River County Clerk).

The obligation follows the property, not the manager. When a rental agent handles a Sebastian unit and fails to remit, the Clerk states the owner remains responsible, and rent collected from friends or relatives is taxable too. North county filers do not have to drive to the Vero Beach courthouse for other Clerk business: the Clerk keeps a Sebastian Office at 1921 U.S. Highway 1, open Monday, Wednesday and Friday from 8:30 am to 5 pm (Clerk of Court).

Most Indian River County bed tax dollars go to beach renourishment and tourism promotion, with about 55 percent projected for beaches and 40 percent for tourism development in fiscal 2025 (Vero Beach 32963).

State law sets the menu. Section 125.0104 of the Florida Statutes lets a county spend the tax on tourist promotion, tourist bureaus run by contract with chambers of commerce, publicly owned museums and aquariums, and beach park facilities, or beach, channel, estuary, or lagoon improvement, maintenance, renourishment and erosion control (Florida Statutes). The estuary and lagoon language matters in a county that fronts the Indian River Lagoon.

Vero Beach 32963 reported in July 2025 that Indian River County was projected to collect about $4.92 million in tourist development taxes for the fiscal year ending September 30, 2025. About $1.96 million was set for tourism development, about $2.7 million for beach renourishment, and the remainder for the county lease on the Jackie Robinson Training Complex (Vero Beach 32963).

The promotion share is split by formula. Vero News reported in June 2014 that a 2003 county commission vote sent 70 percent of tourism development dollars to the Chamber of Commerce, with the other 30 percent ranked by a point system among other agencies. The same report recorded the council's view that events such as the Sebastian Clambake and the Fellsmere Frog Leg Festival had traditionally been self-funded (Vero News). On June 3, 2025, the County Commission raised the Tourist Development Council budget 22 percent to $1.95 million, spread across eight organizations (Vero Beach 32963).

Some of the money shows up as history on north county roadsides. Vero News reported in November 2022 that the county historical marker program, managed by the Historical Society of Indian River County, is funded through the Tourist Development Council of Indian River County and the Florida Division of Historical Resources, with thirty-seven markers countywide, including markers recounting the history of the Wabasso Bridge (Vero News).

The ocean beaches closest to Sebastian, from Sebastian Inlet south past Wabasso Beach, are where bed tax renourishment money meets state grants and Sebastian Inlet District sand (Vero Beach 32963).

Vero Beach 32963 reported in July 2023 that beach Sectors 1 and 2, running from Sebastian Inlet to Seaview, are funded by the Florida Department of Environmental Protection through a separate grant because the Sebastian Inlet District manages those sectors, while Sector 3 covers Windsor, Orchid, Wabasso and Indian River Shores (Vero Beach 32963). The district's inlet management plan calls for bypassing an annual average of 75,000 cubic yards of sand to the south beaches, using sand from the Sebastian Inlet sand trap or trucked sand (Sebastian Inlet District).

Who pays for that sand has been argued. In May 2024, Vero Beach 32963 reported a claim that the Sebastian Inlet District owed Indian River County millions for sand, with the critic noting that the county paid a substantial portion of renourishment costs out of bed tax and property tax revenue (Vero Beach 32963). In October 2024 the paper reported that the local portion of dune repair and beach replenishment funding comes from the bed tax, with state and federal grants covering much of the rest (Vero Beach 32963).

Storms set the timetable. After Hurricane Nicole, Vero News reported in December 2022 a 20 to 25 foot dune retreat at Wabasso Beach Park and a 6-foot dune retreat at Golden Sands Beach Park. The county commission chair said that sand is funded through bed tax and sales tax, not by property taxes (Vero News).

Not every county park project near Sebastian is a bed tax project. Vero News reported in January 2025 that a new basketball court, restrooms and parking lot at Hosie Schumann Park in Sebastian ($416,278), playground equipment at Helen Hanson Park in Roseland ($50,325) and the resurfaced Golden Sands Beach Park lot ($345,358) were paid for by the 1 percent optional sales tax (Vero News).

As of October 2026, Christopher Nunn, a Sebastian City Council member, holds one of the two municipal seats on the nine-member Indian River County Tourist Development Council (Indian River County).

The council's makeup is fixed by law. Section 125.0104 requires nine members appointed by the county commission, including the commission chair or a designee, two elected municipal officials with at least one from the most populous municipality, and six people involved in the tourist industry (Florida Statutes). Indian River County fills those seats with six members appointed by the Board of County Commissioners, two municipal officers appointed by their cities, and one county commissioner (Indian River County).

The county roster in October 2026 lists the City of Sebastian seat held by Councilmember Christopher Nunn, a City of Vero Beach seat held by Aaron Vos, and County Commissioner Joseph E. Flescher, alongside three accommodation owners and three tourism industry members (Indian River County). The City of Sebastian lists Christopher Nunn among its five council members (City of Sebastian).

The council advises; it does not spend on its own. It prepares and submits to the Board of County Commissioners a plan for tourist development, members serve four-year terms with no term limits, and meetings are held quarterly at County Administration Building A, 1801 27th Street, Vero Beach, in Conference Room A1-102 (Indian River County). For Sebastian, that seat is the city's formal voice on how Indian River County spends money raised from visitors to the inlet, the lagoon and the north county beaches.

The Indian River County rate on Sebastian rentals moved from 4% to the 5% now listed by the Clerk, after voters were asked on the 2024 general election ballot to add a fifth penny (Vero Beach 32963).

State law permits that step. Section 125.0104 allows a county to set an additional 1 percent by referendum of the registered electors once the base tax has been in place for at least 3 years (Florida Statutes). Vero Beach 32963 reported in October 2024 that the ballot question would bring the bed tax from 4 percent to 5 percent, and the Indian River County Clerk lists the rate at 5% as of October 2026 (Indian River County Clerk).

The tax survived a statewide challenge in 2025. Vero Beach 32963 reported in July 2025 that a plan to eliminate Florida's 62 Tourist Development Councils and use tourist tax dollars to reduce property taxes failed to make it into the state budget (Vero Beach 32963). In August 2025 it reported that a change in state law now allows tourist tax dollars to be used for lifeguard salaries and benefits, reopening talks between Vero Beach and Indian River County over beach lifeguards (Vero Beach 32963).

Collections kept rising. Vero News reported February 2025 Indian River County bed tax collections up 22 percent, from $577,112 to $700,411 (Vero News). Vero Beach 32963 reported Indian River County tourist taxes collected from January through July 2025 up 18.3 percent over the prior year (Vero Beach 32963), and in July 2026 reported May 2026 bed tax revenue up 8.7 percent from May 2025 (Vero Beach 32963).