Hotel Occupancy Tax

City ordinance #2002-12 details the requirements for the reporting and collection of local Hotel Occupancy Tax (HOT) for all hotels, motels, short-term rentals, bed & breakfasts, etc operating within the Kerrville City limits and the City's Extraterritorial Jurisdiction (ETJ). The City’s ETJ includes unincorporated areas located 1 mile outside the Kerrville City limits. Properties located within the ETJ are required to collect, report, and remit occupancy taxes pursuant to ordinance 2002-12. City ordinance 2022-28 updated zoning requirements and other matters involving short-term rental units. 

Hotel owners, operators, or managers (as defined by ordinance #2002-12) must collect state and local Hotel Occupancy Tax from guests who rent a room or space in a hotel.

For online registration and filing, please visit: www.hoteltaxonline.com. For registration assistance, call Avenu Insights and Analytics 877-693-4435.

RATES

According to the Texas State Tax Code, the State of Texas imposes an occupancy tax rate of 6% on hotels, motels, and short-term rentals, and cities can impose their own tax rate. The City of Kerrville’s current occupancy tax rate is 7%. Hoteliers operating within the City of Kerrville and its ETJ should collect a total of 13% on all stay-related taxable fees. Occupancy taxes apply to the overnight stay as well as other fees assessed as prescribed by law. Please refer to the Comptroller's Reference Guide(texas.gov) to determine taxable fees. Occupancy taxes are to be collected from hoteliers and remitted to state and local governments as outlined in Texas Tax Code Chapter 156.  

REPORTING AND REMITTANCE DUE DATE

Hotel Occupancy Tax is required to be reported and paid by the 15th of each month. A report must be submitted to Avenu Insights and Analytics (the City's Occupancy Tax collection agency) even if the total stays during any month was zero. Failure to report and pay HOT may result in penalties, up to and including legal action. All hoteliers are subject to an audit of revenue and exemptions and should therefore maintain all records for a minimum of five years.

EXEMPTIONS

Exemptions apply to organizations that the State of Texas recognizes as exempt from paying State Hotel Occupancy Tax. While there are some exemptions from payment of State Hotel Occupancy Tax, there are very few exemptions from local occupancy tax. Even if an entity is exempt from paying hotel occupancy tax, typically the operator is still required to collect and remit the City portion of hotel occupancy tax.

To check an entity's exemption status, please see the Comptroller's Entity Search Tool Texas Tax-Exempt Entity Search. Entities not on the list are not exempt.

A guest staying 30 or more consecutive nights is automatically exempted from occupancy tax (state and local). Invalid exemptions are one of the most common audit findings.

Please see the Texas Comptroller's Hotel Occupancy Tax page and Texas Comptroller Quick Reference Guide for more information about exemptions.

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WHAT IS AVENU?

Avenu Insights and Analytics provides the following services:

  • Online collection of hotelier monthly reports and payments
  • Monitoring of delinquent reporting and payment of occupancy tax and communication with both hoteliers and the City of Kerrville regarding delinquencies
  • Remitting collections to the City of Kerrville

For more information about Avenu, please visit https://www.avenuinsights.com.

WHAT IS CONSIDERED A SHORT-TERM RENTAL?

A Short-Term Rental is a privately owned dwelling being rented for less than thirty days charging $2 or more a night. This includes spaces rented through commonly used booking sites such as AirBnb, HomeAway, VRBO, FlipKey, and others. Short-Term rentals are only allowed to operate in certain areas of the City as outlined by the City's zoning code and ordinance #2022-38. For more information about where short-term rentals are allowed, please contact the City of Kerrville Planning Department.

FREQUENTLY ASKED QUESTIONS

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A hotel, bed & breakfast, or short-term rental owner, operator or manager must collect hotel taxes from their guests. For the purposes of the state 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 occupancy taxes apply to sleeping rooms costing $2 or more per day.

Items include but are not limited to: overnight stays, pet fees, cleaning fees, etc. Items subject to occupancy tax are outlined in detail on the Comptroller’s site. For more information, please see Comptroller's helpful guide .

The City of Kerrville’s current Hotel Occupancy Tax Rate is 7% The State hotel tax rate is 6%. Cities, some counties, and special purpose districts can each levy local Hotel Occupancy Taxes in addition to the State’s occupancy tax. Sports and community venue projects can levy Hotel Occupancy Taxes at rates up to 2%. See the Texas Tax Code 156.052 for more information.

A short-term rental is a property that rents out all or a portion of a residential dwelling unit for a period of less than 30 days and not less than 12 hours.

Yes, hoteliers (by definition including short-term rentals) are required to collect, report, and remit Hotel Occupancy Tax if a property is operation as a short-term rental located within the ETJ.

The ETJ includes property that extends on mile beyond the City limits. The City map and its Extraterritorial Jurisdiction can be viewed on the City’s GIS map..

City Hotel Occupancy Taxes must be reported no later than the 15th of each month. Reports should be filed even if there were no stays that month. Records of stays, revenues, and HOT collections and payments are subject to an audit by City ordinance and State law. Records must be maintained for a period of time that covers a minimum of five years.

Hotel Occupancy Taxes due to the City of Kerrville must be paid at hoteltaxonline.com . The site’s registration instructions can be found on this page in the resources section below.

Hosts like AirBnb will typically collect state but not local taxes. Operators must report and remit the City’s portion of taxes on hoteltaxonline.com .

Tax Exemption Certificates exempt certain entities from State Occupancy Tax, but not typically from Local Occupancy Tax. Please see details about exemptions at Comptroller.Texas.gov and use the State’s Texas Tax-Exempt Entity Search tool.

Potential operators of short-term rentals should contact the City’s Planning Department to verify allowable locations of short-term rentals. In addition, it is important to review all information regarding Hotel Occupancy Taxes on the Comptroller’s website and City ordinances relating to both operation of and occupancy tax requirements. For questions about local Hotel Occupancy Tax requirements, potential operators should contact the City’s Finance Department.

CONTACT INFORMATION

Jacob Bogusch - Accounting Assistant
830-258-1138 • jacob.bogusch@kerrvilletx.gov

Cody Scott - Finance Compliance Coordinator
830-258-1122 • cody.scott@kerrvilletx.gov

Texas Comptroller's Office - Hotel Tax Specialist
800-252-1385

Avenu Insights and Analytics- Hotel Occupancy Taxpayer Support
866-240-3665 (option 1 and then option 2) • support@avenuinsights.com

Hotel Tax Online - Online Filing
866-240-3665 • support@salestaxonline.com
Hotel Occupancy Tax Dept.
PO Box 83025
Birmingham, AL 35283-0725