Texas Hotel Occupancy Tax: State and Local Rates for Hotels, B&Bs and Short-Term Rentals

If you own or operate a hotel, bed and breakfast, vacation rental, or any short-term lodging property in Texas, understanding the hotel occupancy tax is essential. Texas imposes both a state-level hotel occupancy tax and allows local jurisdictions to add their own taxes. This guide covers the rates, who must collect and remit taxes, how to register, and key exemptions you need to know.

Texas State Hotel Occupancy Tax: 6% Rate

Texas levies a state hotel occupancy tax of 6 percent on the room rate. This tax applies to short-term lodging in hotels, motels, bed and breakfasts, condos, houses, and any other property rented for overnight stays. The state tax applies to rooms that cost $15 or more per day.

The state tax is collected on the nightly room rate (or the average nightly rate for multi-night stays) and is a privilege tax administered by the Texas Comptroller of Public Accounts. Unlike many states that tax accommodations broadly, Texas focuses the state tax on properties renting for $15 or more, which excludes very low-cost lodging.

Local Hotel Occupancy Taxes: City and County Rates

Many Texas cities and counties impose their own local hotel occupancy taxes in addition to the state tax. Local taxes are typically charged on rooms costing $2 or more per day, a lower threshold than the state tax. This means a room that does not trigger the state tax (under $15 per night) may still owe a local tax, depending on where it is located.

Local hotel occupancy tax rates vary significantly across Texas. For example, major cities like Austin, Dallas, Houston, and San Antonio all have different rates. Some cities may charge 4 to 8 percent or higher, depending on the jurisdiction and the specific ordinance in place. Additionally, special taxing districts within counties may impose their own hotel taxes on top of city and state taxes.

You must check the rates in your specific city and county. Rates are set locally and change periodically. Contact your city's finance department or the county tax assessor-collector to confirm the current local hotel occupancy tax rate where your property is located. The Texas Comptroller's website and your municipal tax office are the authoritative sources for this information.

Who Pays Hotel Occupancy Tax: Guests or Owners

The hotel occupancy tax is a guest-paid tax, but property owners and managers are responsible for collecting it, reporting it, and remitting it to the state and local authorities. Guests do not pay the tax directly to the state; instead, it is added to their final bill by the lodging provider.

As a property owner or operator, you collect the tax from guests, set it aside, file returns with the appropriate agencies, and send the collected funds to the state Comptroller and your local jurisdiction. This obligation applies whether you operate a large hotel, a small bed and breakfast, a vacation rental property, or a single guest house that you rent out occasionally.

Short-Term Rentals and the 29-Day Rule

Texas defines a short-term rental as a stay of 29 days or fewer. Any rental lasting 29 days or less triggers the hotel occupancy tax obligation. Stays of 30 or more consecutive days by the same person are considered permanent residence and are exempt from the hotel occupancy tax.

This distinction matters for property owners who rent through multiple channels or use platforms like Airbnb, VRBO, or similar services. If a guest books a 30-night stay, that transaction is exempt. If the same guest extends by one more day (making it 31 days total), the entire stay remains exempt because it is 30 consecutive days. However, if a new guest books for 15 days, that stay is taxable.

The permanent residence exemption recognizes that housing someone long-term is different from providing temporary lodging and should not be subject to the hotel occupancy tax.

Rental Platforms and Tax Collection Responsibility

If you list your property on a vacation rental platform (such as Airbnb or VRBO), the tax collection responsibility depends on whether the platform has agreed to collect and remit the state hotel occupancy tax.

Many large platforms have filed Form AP-102 with the Texas Comptroller, committing to collect and remit the state hotel occupancy tax on behalf of their hosts. If your platform has done this, the platform collects the tax, and you do not need to separately collect and remit state tax.

However, if your rental platform has not agreed to collect state tax, you are responsible for collecting the tax from guests (or calculating it yourself for direct bookings) and remitting it to the Comptroller monthly. You remain responsible for collecting and remitting any local hotel occupancy tax regardless of whether a platform collects state tax.

Important: Austin has a specific rule. Starting April 1, 2025, Austin required vacation rental platforms to collect the city's local lodging tax from hosts and remit it to the city. This is a city-specific rule and does not apply statewide. If you operate rental properties in Austin, verify the current platform tax collection requirements with the City of Austin Finance Department.

How to Register for Hotel Occupancy Tax in Texas

All hotels, motels, bed and breakfasts, and short-term rental properties in Texas that are subject to the hotel occupancy tax must register with the Texas Comptroller of Public Accounts. Registration is free.

The Comptroller does not issue a printed hotel tax permit; businesses that report the tax send a completed Form AP-102, Hotel Occupancy Tax Questionnaire, to the Comptroller's local field office. Check the Comptroller's hotel tax page at https://comptroller.texas.gov/taxes/hotel/ for current instructions.

When you register, have the following information ready:

• Your business name and federal employer identification number (EIN) or Social Security number
• The property address where lodging will be provided
• The type of lodging (hotel, bed and breakfast, rental property, etc.)
• The estimated monthly revenue from room rentals

Once you are set up with the Comptroller, use the taxpayer number it assigns on all tax returns and correspondence.

Filing Returns and Remitting Tax

Hotel occupancy tax returns are due monthly to the Texas Comptroller (smaller filers may qualify to file quarterly; check with the Comptroller). Returns must be filed by the 20th day of the month following the month in which the tax was collected.

For example, if guests stay at your property in October, you must file your October hotel occupancy tax return and remit the collected taxes by November 20th. You can file returns online through the Comptroller's website or by mail if you prefer.

Each return should show the total room revenue for the month, the amount of state tax collected, and the dates of stays. Keep detailed records of all guest stays, room rates, and taxes collected. These records are essential if the Comptroller audits your account.

Some property owners and managers use accounting software or property management systems that automate tax calculation and reporting. If you do, ensure the software is configured correctly for your property's location and the applicable local tax rate.

Exemptions from Hotel Occupancy Tax

Several categories of stays are exempt from the hotel occupancy tax:

• Permanent residence: Stays of 30 or more consecutive days by one person are considered permanent residence and are not taxable.
• Government officials and employees: Certain stays by state and federal government officials on official business may be exempt. Verify specific circumstances with the Comptroller.
• Exempt entities: Some nonprofit organizations, charitable institutions, and other exempt entities may qualify for exemptions under specific conditions. Documentation is required.

To claim an exemption, the guest or organization must provide proper documentation, such as a government ID, exemption certificate, or letter from the organization. Do not assume a stay is exempt based solely on the guest's word; require documentation before waiving the tax.

Local Variations and Special Rules

Beyond the state tax, local rules can vary considerably. Some Texas cities impose hotel occupancy taxes specifically on vacation rentals (sometimes called "short-term rental taxes") in addition to the general hotel occupancy tax. Others may regulate vacation rentals through zoning or licensing requirements that are separate from tax obligations.

For example, some cities require vacation rental owners to register their properties with the city, obtain a license, or follow specific operational rules (such as quiet hours or parking restrictions). These rules are separate from tax obligations but may affect your ability to legally operate a rental property in that jurisdiction.

Always check with your city's planning and zoning department, your city finance office, and the county tax assessor-collector to understand all tax and regulatory requirements for your specific location.

Resources and Next Steps

For official guidance on the Texas hotel occupancy tax, visit the Texas Comptroller of Public Accounts website at https://comptroller.texas.gov/taxes/. The Comptroller's office provides detailed information on rates, registration, filing, and exemptions.

To find local tax rates and requirements, contact your city's finance or revenue department and your county's tax assessor-collector. Most cities and counties maintain current tax rate information on their websites.

Disclaimer: This guide is informational and provides general information about the Texas hotel occupancy tax. It is not legal or tax advice. Tax laws and local regulations change, and circumstances vary widely. For questions about your specific situation, your tax obligations, or how local rules apply to your property, consult a qualified tax professional, accountant, or attorney in Texas. The Texas Comptroller of Public Accounts is the authoritative source for state tax questions, and your local tax office can answer jurisdiction-specific questions.