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Texas Amends Municipal Occupancy Tax Law

  • Jun 4, 2015 | Gail Cole

 Occupancy taxes apply.

Texas law imposes hotel occupancy tax of 6% on the rental of rooms or spaces costing $15 or more, daily. On top of the state tax, local hotel taxes may be imposed by cities, counties and special purpose districts.

In addition to traditional hotels, motels and B&Bs, the tax applies to the rental of apartments, condominiums, houses, and certain convention center facilities. Business and property owners are liable for the tax; property management companies, online travel companies, and other types of third-party rental companies may also be held responsible for collecting and remitting the tax.

Effective May 29, 2015, the definition of “convention center facilities or convention center complex” is amended in the municipal occupancy tax law. It now includes “a hotel that is owned in part by an eligible central municipality described by Subdivision (7)(D) and that is located within 1,000 feet of a convention center facility.”

The amendment also removes from the definition of convention center facilities or convention center complex “a hotel proposed to be constructed, remodeled, or rehabilitated by a municipality or a nonprofit municipally sponsored local government corporation created under Chapter 431, Transportation Code, that is within 3,000 feet of the property line of a convention center owned by a municipality having a population of more than 500,000 and that borders the United Mexican States.”

House Bill 1964 also amends the definition of “eligible central municipality.”

Transient occupancy taxes differ widely from state to state. In some states, they are imposed on the rental of camp sites and RV parks. In some states they apply to additional charges such as pet fees, rent-a-cribs, and pay-per-view movies. Local occupancy taxes are often administered by local governments (as in home rule states), and sometimes they’re administered by non-governmental agencies, such as the local tourism board or economic development agency.

These taxes are popular among state and local lawmakers because they’re passed on to consumers who are usually not constituents. As a result, transient occupancy tax compliance is extremely burdensome, especially for businesses operating in multiple locations.

The good news? It can be simplified. Learn more.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.