Texas Tax Code

Sec. § 351.103
Allocation of Revenue: General Rule


(a)

At least 50 percent of the hotel occupancy tax revenue collected by a municipality with a population of 200,000 or greater must be allocated for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(3). For municipalities with a population of less than 200,000, allocations for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(3) are as follows:

(1)

if the tax rate in a municipality is not more than three percent of the cost paid for a room, not less than the amount of revenue received by the municipality from the tax at a rate of one-half of one percent of the cost of the room; or

(2)

if the tax in a municipality exceeds three percent of the cost of a room, not less than the amount of revenue received by the municipality from the tax at a rate of one percent of the cost of a room. This subsection does not apply to a municipality, regardless of population, that before October 1, 1989, adopted an ordinance providing for the allocation of an amount in excess of 50 percent of the hotel occupancy tax revenue collected by the municipality for one or more specific purposes provided by Section 351.101 (Use of Tax Revenue)(a)(1) until the ordinance is repealed or expires or until the revenue is no longer used for those specific purposes in an amount in excess of 50 percent of the tax revenue.

(b)

Subsection (a) does not apply to a municipality in a fiscal year of the municipality if the total amount of hotel occupancy tax collected by the municipality in the most recent calendar year that ends at least 90 days before the date the fiscal year begins exceeds $2 million. A municipality excepted from the application of Subsection (a) by this subsection shall allocate hotel occupancy tax revenue by ordinance, consistent with the other limitations of this section. The portion of the tax revenue allocated by a municipality with a population of more than 1.6 million for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(3) may not be less than 23 percent, except that the allocation is subject to and may not impair the authority of the municipality to:

(1)

pledge all or any portion of that tax revenue to the payment of bonds as provided by Section 351.102 (Pledge for Bonds)(a) or bonds issued to refund bonds secured by that pledge; or

(2)

spend all or any portion of that tax revenue for the payment of operation and maintenance expenses of convention center facilities.

(b-1)

Notwithstanding Subsection (a), at least 30 percent of the hotel occupancy tax revenue collected by a municipality described by Section 351.101 (Use of Tax Revenue)(a)(6)(C) must be allocated for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(3).

(c)

Not more than 15 percent of the hotel occupancy tax revenue collected by a municipality, other than a municipality having a population of more than 1.6 million, or the amount of tax received by the municipality at the rate of one percent of the cost of a room, whichever is greater, may be used for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(4). Not more than 19.30 percent of the hotel occupancy tax revenue collected by a municipality having a population of more than 1.6 million, or the amount of tax received by the municipality at the rate of one percent of the cost of a room, whichever is greater, may be used for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(4). Not more than 15 percent of the hotel occupancy tax revenue collected by a municipality having a population of more than 125,000 may be used for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(5).

(d)

A municipality that does not allocate any hotel occupancy tax revenue for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(1) may allocate not more than 50 percent of the hotel occupancy tax revenue collected by the municipality for the purposes provided by Section 351.101 (Use of Tax Revenue)(a)(5). A municipality that before October 1, 1989, adopts an ordinance providing for the allocation of an amount in excess of 50 percent of the hotel occupancy tax revenue collected by the municipality for one or more specific purposes provided by Section 351.101 (Use of Tax Revenue)(a)(5) may allocate the tax revenue as provided by that ordinance until the ordinance is repealed or expires or until the revenue is no longer used for those specific purposes.

(e)

A municipality may use hotel occupancy tax revenue collected by the municipality for a purpose provided by Section 351.101 (Use of Tax Revenue)(a)(1) only if the municipality complies with the applicable provisions of this section.
Added by Acts 1987, 70th Leg., ch. 191, Sec. 1, eff. Sept. 1, 1987. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 14.24(b), eff. Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1110, Sec. 6, eff. Oct. 1, 1989; Acts 1993, 73rd Leg., ch. 153, Sec. 1, eff. Aug. 30, 1993; Acts 1993, 73rd Leg., ch. 680, Sec. 5, eff. Sept. 1, 1993; Acts 2001, 77th Leg., ch. 1308, Sec. 5, eff. June 16, 2001.
Amended by:
Acts 2019, 86th Leg., R.S., Ch. 405 (S.B. 1262), Sec. 2, eff. September 1, 2019.
Source

Last accessed
Jun. 7, 2021