Texas Hotel Occupancy Tax

Generally, a tax is imposed on a person who pays for the use or possession of or the right to use or possess a room or space in a hotel costing $15 or more each day. The rate of state tax is 6% of the price paid for the room.

In addition, a municipality or county may impose a tax on a person who pays for the use or possession of a room in a hotel that is ordinarily used for sleeping that costs $2 or more per day. The rate of tax that a municipality or county may impose may not exceed 7% of the price paid for the room.

The definition of what constitutes a “hotel” in connection with this tax is fairly expansive and includes hotels, motels, tourist homes, tourist courts, lodging houses, ins rooming houses, bed and breakfasts, and short-term rentals.

As with the Texas sales or use tax, certain organizations may qualify for an exemption from the tax.