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INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10243
March 5, 2019
To the Mayor and Members of the City Council
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SUBJECT: HOTEL OCCUPANCY TAX EXTENDED STAY EXEMPTIONS
Chapter 351 of the Texas Tax Code authorizes a city by ordinance to impose a local hotel occupancy tax (HOT). The
tax is tied to the amount a person pays for the use or right to use a sleeping room in a hotel.
broadly defined as a building in which the public can obtain sleeping accommodations for consideration (payment).
The tax is imposed based on how property is used and not tied to the manner in which the property is zoned.
Collection and Reporting
Occupancy Tax is found in Article II of Chapter 32 of the City Code. Under Chapter
32, hotels in the City are responsible for collecting the tax on the consideration paid, filing monthly reports, and
making monthly remittance of the tax collected in the preceding month. Report and remittance are due no later than
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the 25 of the month following each monthly period.
Exception and Exemptions
State law does not allow HOT
right to use or possess a room for at least 30 consecutive days, so long as there is no interruption of payment for the
period. Permanent residents must state upon check-in that they are staying 30 consecutive days; otherwise they must
pay the tax. If they leave before the 30 day period, the hotel is responsible for collecting the tax from them.
State law also mandates certain exemptions to the tax, including for the United States, its governmental entities, and
federal employees engaged in official duties. For state government employees, in most cases they must pay the tax,
and the state government entity they work for may apply for a refund. Religious, charitable, or educational
organizations are not exempt from the City HOT.
HOT Audits
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As a part of the FY2018 Annual Audit Plan, Internal Audit completed its 5 year of a five-year hotel audit cycle. In
those five years, Internal Audit validated taxable hotel occupancy revenue reported to the City of Fort Worth by 25
hotels. The audits identified approximately $44,000.00 in HOT underpayments, plus the identification of one hotel
that used an inaccurate calculation methodology over multiple years.
Each year, Internal Audit verified hotel room revenue and HOT exemptions claimed (e.g., permanent residents/30-
consecutive room stay days, employees of US government entities, and diplomatic personnel with the U. S. State
Department).
HOT reporting format to require that hotels itemize exemptions by type. The revised format allows management to
identify trends, by exemption type. Prior to this revision, hotels were only required to report total taxable hotel
revenue.
If you have any questions, please call Patrice Randle, City Auditor, at 817-392-6132 or Denis McElroy, Sr.
Assistant City Attorney, at 817-392-2758.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS