Texas HOT Tax–A Tourist Funded Tax for Tourism
Some tourists might be surprised to find a separate line item on their hotel or motel bill that is known in Texas as a Hotel Occupancy Tax or HOT Tax. If a local governmental entity has approved the tax, every owner, operator or manager of a hotel, motel, bed and breakfast or anyplace that rents rooms for less than 30 days, must collect a special tax that is tacked onto a visitor’s bill.
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Depending upon the area of the state, the tax can really add up. In some places, there can be a state and special venue tax as well. The actual amount of the tax can vary depending upon the area of the state. The bad news is that the fee can inflate a visitor’s total lodging bill. The good news is that the tax provides for a very specific revenue stream that may only be used to promote tourism and the convention and hotel industry. Tourists are helping to pay for tourist attractions.
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State law sets out the parameters, but cities, counties and other governmental entities can use HOT taxes for some much-needed projects that might not be funded from traditional governmental funding sources. In certain circumstances, a HOT tax can be approved to support a special sport or community venue. A HOT tax can be the reason a community can build a stadium or fund a special sporting event.
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HOT taxes can be used to pay for the promotion of tourist attractions through signage and advertising, promotion of the Arts, convention and visitors bureaus, historical preservation and restoration projects, sports attractions and the building and operation of sports venues, transportation systems, among other expenses, as defined by State law. Of course, the purposes of the HOT tax is to promote tourism so the use of the tax must do that. State law describes the limits but there is some discretion left up to the local governmental entities. The good thing is that a HOT tax may not go into the general budget of any local governmental entity–no using it for necessities or infrastructure.
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-Depending upon the area of the state, the tax can really add up. In some places, there can be a state and special venue tax as well. The actual amount of the tax can vary depending upon the area of the state. The bad news is that the fee can inflate a visitor’s total lodging bill. The good news is that the tax provides for a very specific revenue stream that may only be used to promote tourism and the convention and hotel industry. Tourists are helping to pay for tourist attractions.
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State law sets out the parameters, but cities, counties and other governmental entities can use HOT taxes for some much-needed projects that might not be funded from traditional governmental funding sources. In certain circumstances, a HOT tax can be approved to support a special sport or community venue. A HOT tax can be the reason a community can build a stadium or fund a special sporting event.
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HOT taxes can be used to pay for the promotion of tourist attractions through signage and advertising, promotion of the Arts, convention and visitors bureaus, historical preservation and restoration projects, sports attractions and the building and operation of sports venues, transportation systems, among other expenses, as defined by State law. Of course, the purposes of the HOT tax is to promote tourism so the use of the tax must do that. State law describes the limits but there is some discretion left up to the local governmental entities. The good thing is that a HOT tax may not go into the general budget of any local governmental entity–no using it for necessities or infrastructure.
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While the visitor’s tax can be annoying or surprising and might even have a budget impact on travel plans, the HOT Tax is something that has provided millions of dollars for improvements to tourist attractions around the state. Most of the larger counties in Texas have passed legislation that requires the collection of the tax. Good news for the hotel management companies from texas.
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Individuals who are sponsoring an event can apply for HOT tax funds on a reimbursement basis. This added benefit might provide the needed boost to a promoter to help get a new event off the ground. Anyone interested in trying to apply for funds, should check with their local governmental tourism or convention bureau for more information.
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If you are a tourist who is traveling around the state of Texas, remember your HOT tax is helping to pay for the many sites and amenities you are enjoying. HOT taxes are directly related to making our communities better places to visit. Thanks for visiting the great state of Texas and thanks for helping to improve it.
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Individuals who are sponsoring an event can apply for HOT tax funds on a reimbursement basis. This added benefit might provide the needed boost to a promoter to help get a new event off the ground. Anyone interested in trying to apply for funds, should check with their local governmental tourism or convention bureau for more information.
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If you are a tourist who is traveling around the state of Texas, remember your HOT tax is helping to pay for the many sites and amenities you are enjoying. HOT taxes are directly related to making our communities better places to visit. Thanks for visiting the great state of Texas and thanks for helping to improve it.
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Laura Gordon is a writer and co-author with Tricia Kagerer of Wise Irish Women. For more about Ms. Gordon, please visit wiseirishwomen.com.
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