Hotel Occupancy Taxes

Thank you for your inquiry for more information about Hotel Occupancy Taxes (HOT).  We appreciate your faithfulness and diligence to remitting Hotel Occupancy Taxes.  
 
The City ended their relationship with Avenu Insights and Analytics LLC effective March 31, 2022.  Avenu Insights no longer provides services or support to the City of Fredericksburg or our customers.   Online services through Avenu have also been discontinued.

 On April 1, 2022, the City entered into an agreement Granicus LLC  to provide software for City Staff to utilize to administer the Short-term Rental (STR) and Hotel Occupancy Tax ordinances.  City staff will be assisting you with your questions and inquiries.
 
To view Hotel Occupancy Tax FAQ, click here.
 
Permit Requirements
Under City Ordinance Chapter 23, Article V. for Short-Term Rentals, you are required to obtain a permit to operate as an Short-term Rental (STR) in the Fredericksburg City Limits.

 A permit is not required for STR’s located in the ETJ (extra-territorial jurisdiction).  To determine if your STR is in the ETJ, please click here to access the Zoning Map.  Please note, you are required to remit HOT to the City of Fredericksburg even if you are located in the ETJ.

To view Short-term Rental FAQ, click here. 
 
For more information about the permit process and requirements, please click here.  You may also call 830-997-7521 to speak with someone in Development Services or click here to send an email.

Hotel Occupancy Tax Rates
Local Tax Rate
 Under City Ordinance Chapter 41, Article IV for Hotel Occupancy Tax, the hotel tax rate for the City of Fredericksburg is seven percent (7%) and is filed on a quarterly basis.

State Tax Rate 
 The hotel occupancy tax rate for the State of Texas is six percent (6%) and is remitted either monthly or quarterly.   The State will assign your remittance frequency.  If you have not already set up an account to remit HOT with the Texas Comptroller of Public Accounts, click here for more information, and click here for their contact information.  Please click here for the Comptroller’s Quick Reference Guide for Hotels.  If you use or plan to use a reservation service, please see the section below titled Reservation Services.
 
 You should be charging your guest a total of thirteen percent (13%) for Local and State Hotel Occupancy Taxes.
 

How to Remit Hotel Occupancy Taxes

 Remittance Form (fillable & printable)
You may file using the HOT Remittance form available here. We can accept checks, money orders, credit cards and ACH bank draft. 
 
If you prefer to pay by credit card or ACH bank draft, please email the remittance form to str@fbgtx.org and request a secure online payment link. Staff will send an invoice with a secure payment link. Please note, the taxpayer will incur a 2.9% credit card fee ($2.90 per $100) or up to a $5.00 ACH bank draft fee depending upon which payment method you use.

If you prefer to pay by check or money order, you may either mail or drop off your remittance form and payment.  Checks and money orders should be made payable to City of Fredericksburg.
 
 The remittance address is:
City of Fredericksburg
c/o Hotel Occupancy Taxes
126 W. Main St.
Fredericksburg, TX 78624

During business hours, you may drop off your remittance form and payment on the 1st floor in the Utility Billing Dept. at City Hall located at 126 W. Main St.   After business hours, you may drop off your remittance form and payment in the drop box located on the Crockett Street side of the City Hall building.
 
Online Remittance
The enhanced version of the Granicus software became available to our customers beginning October 14, 2022.  Please use this link to set up your account.  Your first step is to create an account.  Next, under the Services option, you will link your short-term rental or hotel/motel property to your account.  It is important to use the email address you have on record with the City for your short-term rental or hotel/motel property.  Otherwise, you may not be able to receive a verification code to complete linking your property to your account.  Once you enter the verification code, this will complete linking the property to your account.  If you have more than one property, you will be able to link each property to your account.  You should now be able to remit HOT, apply for an STR permit or renew your STR permit.   For further assistance, please click here.
 
 Once your account is set up, you will use your Log In and password to access your account to pay HOT. 

If you are unable to link your STR(s) to your account, or experience other technical difficulties using your account, please use our fillable Remittance Form to remit HOT.

****** UPDATE 1/31/2023 ****** City staff is aware that some short-term rental owners and operators are unable to link properties to their account and experiencing various technical difficulties.   We are actively working with Granicus to determine the cause of the issues and resolve the problems. 
 

What To Do If You Do Not Have Any Receipts During A Quarter

If you do not have any receipts during a quarter, you will file a zero-dollar receipts remittance.  This will prevent the City from sending a delinquent notice to you for the quarter you did not have any receipts.  Please note, filing a zero-dollar receipts remittance can affect the status of your STR permit under the new STR Ordinance that became effective April 1, 2022.

Hotel Occupancy Tax Remittances are due:

Late remittances will be assessed a 15% penalty and 4.25% interest charge.  If you are remitting HOT for quarters that are past due, you must file one remittance for each quarter that is past due.
 

Taxable Revenue
Taxable revenue includes your gross taxable receipts, cleaning fees and pet fees.  When calculating the Hotel Occupancy Tax due, seven percent (7%) is multiplied by the gross taxable receipts amount, cleaning fees and pet fees. 

Example: If the nightly rate is $300 per night, a cleaning fee of $100 is charged, a pet fee of $50 is charged and the guest stays two nights, the total taxable receipts amount is $750.   

$300 X 2 nights = $600 plus $100 cleaning fee + $50 pet fee = $750 total taxable receipts

$750 X 0.07 (7%) = $52.50 hotel tax due

Taxpayers that multiply seven percent (7%) by the amount of revenue that is deposited to their bank account after service fees are deducted by their reservation service are not calculating the correct amount of tax due.  A 15% penalty and interest charge will be assessed on the additional hotel tax due.

Reservation Services
Reservation services like AirBnB or VRBO do not remit HOT to the City of Fredericksburg on behalf of their customers.  It is your responsibility to make sure you charge and collect the appropriate amount of hotel tax and remit it to the City of Fredericksburg.

If you use or plan to use a reservation service, they usually remit State HOT under their taxpayer number on your behalf.  However, you should always verify what services your reservation service is performing for you especially as it relates to remitting HOT.  

It is a good idea to obtain documentation from your reservation service showing the Hotel Occupancy Tax has been remitted on time and the Taxable Receipts have been calculated appropriately so the correct amount of tax is remitted.  If you are selected for audit by the State or our municipality, the property owner may be held liable for any discrepancies despite using a reservation service under Texas State Law.

If you do not plan to use a reservation service, you will need to set up an account with the Texas Comptroller’s office to pay State Hotel Occupancy Tax.  For more information, see the section above titled Hotel Occupancy Tax Rates. 

Exemptions
Customers claiming an exemption from Hotel Occupancy Tax must present a Hotel Occupancy Tax Exemption Certificate.  Please read the exemption certificate to determine if a customer qualifies for an exemption from paying hotel occupancy tax.

The only customer not required to provide a Hotel Occupancy Tax Exemption Certificate are customers who stay in a hotel, motel, bed and breakfast or short-term rental for longer than 30 consecutive days.

Common Exemptions from Hotel Occupancy Tax: 

1. Guest stays over 30 consecutive days, 
2. State & Federal Officials or Employees,
3. Charitable Entities – 501 (c)(3) or nonprofit organizations,
4. Educational Entities (exempt from State hotel tax, but NOT local hotel tax), and
5. Religious organizations

It is important to read the exemption certificate for details.  This will help you determine if your customer qualifies for an exemption from paying hotel occupancy tax.
 
For assistance regarding Hotel Occupancy Taxes, please contact Darren Eckhardt at 830-990-2069 or click here
 to send an email.