Tourism Development Zone (TDZ) Tourism Surcharge
The TDZ tourism surcharge incentive program in Downtown Memphis is a public financing tool that supports the development and renovation of (i) full-service hotels with a minimum of 250 rooms and (ii) new mixed-use developments that include a full-service hotel with a minimum of 150 rooms and are located within the city’s Tourism Development Zone. In simple terms, certain hotel owners and developers of mixed-use projects may use this program and elect to charge customers up to an additional 5% tax on the sale of goods and services to help fund property improvements over time.
Under Tennessee law, Memphis can designate such projects as Qualified Public Use Facilities, typically including hotel rooms and related retail, restaurant, or parking components. Once approved, these projects will apply up to a 5% surcharge on room stays and on-site purchases.
Revenue from the surcharge is reinvested into the project to help cover construction, major renovations, or long term financing costs, often over a period of up to 30 years.
This structure allows such projects to be partially funded by visitor spending. By capturing revenue generated on site, the program helps attract private investment, support hotel development and redevelopment, and strengthen Downtown Memphis as a tourism destination. Approval of the 5% surcharge requires action by the Memphis City Council.
For more information
Contact Chief Operations Officer, Brett Roler, roler@downtownmemphis.com
