I have been covering Hotel Occupancy Tax (HOT Tax) since my first newspaper gig at the other guys in 2009.
I’ve seen it both used and abused across several avenues locally and elsewhere across the state.
However, I’m all for collecting the funds and using them to benefit the whole county instead of just concentrating things at city levels and tossing a pittance here or there to prop up events outside the city limits.
And, let’s be realistic here, the state is already getting its 6% from hotels, motels, and bed and breakfasts, as well as condominiums, apartments and houses rented for less than 30 consecutive days.
It’s not a tax that’s imposed on permanent residents or those renting for more than 30 consecutive days!
Not to mention that amount should also come from all short-term rentals as defined by Tax Code 156 as “the rental of all or part of a residential property to a person who is not a permanent resident.”
Both Bay City and Palacios are collecting 7% on top of that state amount – for a total of 13% inside city limits.
It’s worth noting that HOT funds are supposed to be used to directly enhance and promote tourism along with the hotel and convention industry.
Plus the Comptroller’s website states that local HOT revenue is not to be treated like general revenue or spent on general expenditures.
However, Matagorda County joins the list featuring a dozen other counties with the ability to use said money to care for and maintain beaches.
Under Section Sec. 352.1033, HOT tax revenue uses for counties bordering the Gulf of Mexico outlines things like cleaning public beaches, providing and maintaining public restrooms and litter containers on or near public beaches along with advertising for tourism.
Other general HOT uses include things like way-finding signage, promotion of the arts, advertising and promotion geared towards tourists, historical restoration and preservation projects, and several others.
Of course, that only works if the county is collecting said HOT Tax at large – which can be done by an order or resolution for unincorporated areas.
Originally, Commissioners Court held a HOT Tax workshop Sept. 29 last year, with Texas Hotel & Lodging Association (THLA) General Counsel & Legislative Director Justin Bragiel and THLA Vice President of Partnerships Carolyn McCall-Squires.
At the end of that workshop, commissioners decided to research HOT further before approving its collection at a February 2026 meeting.
And, to be fair, we honestly didn’t hear any pushback until recently.
It seems that the main issue arose when the contracted collection company botched dispersing notices across the county near the end of July while claiming collection to start on Aug. 1.
Then everyone seemed to have an opinion when faced with paying 7% to the county from their rental outside of city limits.
I think it’s actually pretty crazy because those folks should have been paying the state already, so, they should know the process now.
Plus, I don’t understand why you wouldn’t want to invest in the community that you’re renting rooms in – it seems like you could generate a lot more rental income if things improve across the board.
You know, better amenities or supported avenues to draw tourists which in turn could grow your business or customer base – kind of a no-brainer there.
But, hey, I get it, the county should have been more transparent and offered at least a vague plan for the funding they wanted to collect.
