BILL ANALYSIS Senate Research Center S.B. 1854 89R10425 CJD-D By: West Economic Development 4/11/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Hotel owners, operators, or managers must collect state hotel occupancy tax from their guests who rent a room or space in a hotel costing $15 or more each day. The tax applies not only to hotels and motels, but also to bed and breakfasts, condominiums, apartments, and houses. Local hotel taxes apply to sleeping rooms costing $2 or more each day. With the numerous sporting and entertainment events around the state, many homeowners rent their homes or rooms in their house to people attending these events. Persons leasing their houses must collect hotel occupancy tax from their customers in the same way a hotel or motel collects the tax from its guests. Property management companies, online travel companies and other third-party rental companies may also be responsible for collecting the tax. S.B. 1854 amends Section 3251.101 of the Tax Code in relation to the municipal hotel tax. This expands the municipality tax to sporting events that are conducted in a facility owned by the municipality, that is located in a county with a population of 2.2 million and is adjacent to a county with 850,000. It must also have 51,000 but less than 57,000 or less than 1.3 million and is bisected by Interstate Highway 20 and State Highway 67. As proposed, S.B. 1854 amends current law relating to the use of municipal hotel occupancy tax revenue by certain municipalities. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 351.101(a), Tax Code, as follows: (a) Provides that revenue from the municipal hotel occupancy tax is authorized to be used only to promote tourism and the convention and hotel industry, and that use is limited to the following: (1)-(5) makes no changes to these subdivisions; (6) expenses, including promotion expenses, directly related to a sporting event in which the majority of participants are tourists who substantially increase economic activity at hotels and motels within the municipality or its vicinity if: (A) makes no changes to this paragraph; (B)-(C) makes nonsubstantive changes to these paragraphs; or (D) the sporting event is conducted at a facility located in and owned by a municipality located in a county with a population of 2.2 million or more and that is adjacent to a county with a population of more than 850,000 and with a population of more than 51,000 but less than 57,000 or less than 1.3 million and that is bisected by Interstate Highway 20 and State Highway 67; and (7)-(11) makes no changes to these subdivisions. SECTION 2. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 1854
89R10425 CJD-D By: West
Economic Development
4/11/2025
As Filed
Senate Research Center
S.B. 1854
89R10425 CJD-D
By: West
Economic Development
4/11/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Hotel owners, operators, or managers must collect state hotel occupancy tax from their guests who rent a room or space in a hotel costing $15 or more each day. The tax applies not only to hotels and motels, but also to bed and breakfasts, condominiums, apartments, and houses. Local hotel taxes apply to sleeping rooms costing $2 or more each day.
With the numerous sporting and entertainment events around the state, many homeowners rent their homes or rooms in their house to people attending these events. Persons leasing their houses must collect hotel occupancy tax from their customers in the same way a hotel or motel collects the tax from its guests. Property management companies, online travel companies and other third-party rental companies may also be responsible for collecting the tax.
S.B. 1854 amends Section 3251.101 of the Tax Code in relation to the municipal hotel tax. This expands the municipality tax to sporting events that are conducted in a facility owned by the municipality, that is located in a county with a population of 2.2 million and is adjacent to a county with 850,000. It must also have 51,000 but less than 57,000 or less than 1.3 million and is bisected by Interstate Highway 20 and State Highway 67.
As proposed, S.B. 1854 amends current law relating to the use of municipal hotel occupancy tax revenue by certain municipalities.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 351.101(a), Tax Code, as follows:
(a) Provides that revenue from the municipal hotel occupancy tax is authorized to be used only to promote tourism and the convention and hotel industry, and that use is limited to the following:
(1)-(5) makes no changes to these subdivisions;
(6) expenses, including promotion expenses, directly related to a sporting event in which the majority of participants are tourists who substantially increase economic activity at hotels and motels within the municipality or its vicinity if:
(A) makes no changes to this paragraph;
(B)-(C) makes nonsubstantive changes to these paragraphs; or
(D) the sporting event is conducted at a facility located in and owned by a municipality located in a county with a population of 2.2 million or more and that is adjacent to a county with a population of more than 850,000 and with a population of more than 51,000 but less than 57,000 or less than 1.3 million and that is bisected by Interstate Highway 20 and State Highway 67; and
(7)-(11) makes no changes to these subdivisions.
SECTION 2. Effective date: September 1, 2025.