| TO: | Honorable Fred Hill, Chair, House Committee on Local Government Ways & Means |
| FROM: | John S. O'Brien, Director, Legislative Budget Board |
| IN RE: | SB213 by Fraser (Relating to the authority of certain counties to impose a county hotel occupancy tax and to the rate of the tax.), As Engrossed |
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2008 | $0 |
| 2009 | $0 |
| 2010 | $0 |
| 2011 | $0 |
| 2012 | $0 |
| Fiscal Year | Probable Revenue Gain/(Loss) from Llano county |
|---|---|
| 2008 | $942,000 |
| 2009 | $978,000 |
| 2010 | $1,015,000 |
| 2011 | $1,051,000 |
| 2012 | $1,086,000 |
The bill would amend Section 352.002(a) of the Tax Code, relating to the authority of certain counties to impose a county hotel occupancy tax and to the rate of that tax.
The bill would allow a county with a population of more than 15,000 and less than 20,000 and that borders Lake Buchanan to impose a county hotel occupancy tax. This tax would not apply to a hotel located in a municipality.
The bill would amend Tax Code Section 352.003(g) to cap the hotel tax rate for a county meeting the description of Starr County at 2 percent.
This bill would take effect immediately upon enactment, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect September 1, 2007.
The only county that would meet the criteria established by the bill is Llano County. It is not known if this county would approve a county hotel occupancy tax or at what rate.
Currently, unless otherwise specified, counties authorized to impose a county hotel occupancy tax may not impose the tax at a rate greater than 7 percent. Data on taxable hotel receipts from Llano County were gathered from Comptroller tax files. Receipts were multiplied by the 7 percent rate to estimate the potential maximum gain to Llano County. The gross taxable receipts from the two municipalities in the county were then subtracted from the overall taxable receipts for the county to estimate the maximum potential gain to Llano county.
The amendment to Section 352.003(g) to cap the hotel tax rate for Starr County at 2 percent was originally intended in legislation enacted by the 78th Legislature, Regular Session (2003). In that session, HB 3282 allowed Starr County to impose a hotel tax, at a rate not to exceed 2 percent.
However, another bill that amended the same subsection also passed that session. HB 2018 renumbered Section 352.002(a) and inadvertently designated a different county as Section 352.002(a)(17). This bill would rectify the situation. Because hotels in Starr County are currently charging only the 2 percent tax rate for counties, this provision would have no fiscal impact
| Source Agencies: | 304 Comptroller of Public Accounts
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| LBB Staff: | JOB, CT
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