Show All Answers

1. What is considered a hotel under the Hotel Tax?

For the purposes of the hotel tax, a hotel is considered to be any building in which members of the public rent sleeping accommodations for $15 or more per day. Local hotel taxes apply to sleeping rooms costing $2 or more per day. 

The tax covers hotels, motels, and bed and breakfasts, as well as condominiums, apartments, and houses rented for less than 30 consecutive days. 

Hotel tax does not apply to hospitals, sanitariums, nursing homes, student dormitories operated by colleges and universities; or condominiums, apartments, and houses leased for more than 30 consecutive days.

2. Who has to collect hotel taxes?

A hotel's owner, operator, or manager must collect hotel taxes from their guests. 

3. What is the hotel tax rate?

The state hotel tax rate in is 6% and the local tax rate is 1% for a total of 7% hotel tax rate.

4. What government agency handles hotel taxes?

The Comptroller's office collects and administers the 6 percent state hotel tax, while cities and counties are responsible for collecting their own local hotel taxes.

5. Is there hotel tax on meeting or banquet rooms?

Yes, there is state hotel tax on meeting and banquet rooms. The 6 percent state hotel tax applies to any room or space in a hotel, including meeting and banquet rooms.

Local hotel taxes, however, are due only on those rooms ordinarily used for sleeping. There are no state or local hotel taxes on meeting and banquet rooms located in a building where no sleeping accommodations are provided.

6. Who does not have to pay state and local hotel taxes?

The following organizations and individuals do not have to pay hotel tax:

• The U.S. government and its employees traveling on official business
• Foreign diplomats issued a tax exemption card by the U.S. Department of State, unless the card specifically excludes hotel tax
• Certain Texas state officials with special hotel tax exemption cards (includes heads of state agencies, members of state boards and commissions, judicial officials at the district court level and above, state legislators, and legislative employees)
• Permanent residents, that is, guests who occupy a room for at least 30 consecutive days; any interruption in the term of occupancy will void the exemption (guests who stay 30 or more days and notify the hotel in writing of their intention beforehand are exempt from the day of notification, while guests who do not notify the hotel must pay the tax the first 30 days and are exempt thereafter)
• Some nonprofit entities and their employees traveling on official business; the entity must have received a hotel tax exemption letter from the Comptroller's office and the reason for the exemption must be written on the exemption certificate, for example, "exempt per Electric Cooperative Act, Utilities Code, Chapter 161" or "exempt per Telephone Cooperative Act, Utilities Code, Chapter 162."

7. Why do some hotels collect tax after a permanent resident gives written notice?

Some hotels collect tax after a permanent resident gives written notice because a hotel is liable for tax if a guest fails to stay for 30 consecutive days and thus may prefer to collect tax and then later give the guest a refund or credit.

8. Are Texas state agencies and their employees exempt from hotel taxes?

No, Texas state agencies and their employees are not exempt for hotel tax. 

State agencies (except Texas institutions of higher education) and their employees (except certain state officials described in the code) must pay state and local hotel taxes. 

State agencies can request a refund of state and local hotel taxes paid or reimbursed to employees (Chapter 351.006).

9. Are local government agencies and their employees exempt from hotel taxes?

No, county and city agencies and their employees are not exempt from hotel taxes. They must pay state and local hotel taxes, and cannot request refunds of taxes paid.

10. How does a hotel guest claim a hotel tax exemption?

For a hotel guest to claim a hotel tax exemption, the exempt organization or employee must give the hotel a completed Hotel Occupancy Tax Exemption Certificate (form 12-302) and proof that the organization has received a letter of hotel tax exemption from the Comptroller's office at the time of registration. 

The on-line list of organizations that have received hotel tax exemption is located through the Comptroller's Exemption Search.

11. What do hotels need to verify a hotel tax exemption?

Hotels need the following supporting documentation to verify a hotel tax exemption:

• Federal employees traveling on government business - a valid government identification card
• Designated Texas state employees - a special hotel tax exemption photo ID or card that states holder is exempt from hotel taxes
  
• Foreign diplomats - a tax exemption card issued by the U.S. Department of State that exempts the diplomat or mission, unless the card specifically excludes hotel tax
  
• Employees and representatives of a specific nonprofit entity or a nonprofit charitable, educational, or religious organization traveling on organization business - a Comptroller's letter of hotel tax exemption or verification that the organization is on the Comptroller's list of exempted entities, such as a printed copy of the Comptroller's website listing the organization as exempt for hotel tax.