Hotel Occupancy Taxes
Hotel Occupancy Taxes (HOT)
Thank you for your inquiry for more information about Hotel Occupancy Taxes (HOT). We appreciate your faithfulness and diligence to remitting Hotel Occupancy Taxes.
As of March 31, 2022, Avenu Insights and Analytics no longer provides services or support to the City of Fredericksburg or our customers. Online services through Avenu have also been discontinued.
Effective April 1, 2022, Granicus LLC is our new provider for Short-term Rental and Hotel Occupancy Tax services.
To view Hotel Occupancy Tax Frequently Asked Questions, click here.
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 Frequently Asked Questions, 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 about your STR.
Hotel Occupancy Tax Rates
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 quarterly online or by paper form.
The hotel 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.
How to Remit Hotel Occupancy Taxes
You may remit HOT online here. You will have the ability to pay HOT securely by credit card or ACH bank draft.
Granicus LLC, is working diligently to build, customize and enhance our new online services portal for our customers. As we receive feedback, enhancements will continue to be made to the online services system. Please know the appearance and functionality of the online system may change the next time you use it, to provide you a better user experience.
You may also file HOT using our fillable HOT Remittance form is available here. If you file by paper form, we can only accept a check or money order for your tax payment. We encourage you to remit HOT online as opposed to a paper form, as a paper option will not always be available.
Checks and money orders should be made payable to City of Fredericksburg.
You may either mail or drop off your remittance form and payment.
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.
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 4/1/2022.
Hotel Occupancy Tax Remittances are due to the City as follows:
Jan 1 – Mar 31
Apr 1 – Jun 30
Jul 1 – Sep 30
Oct 1 – Dec 31
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 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 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.
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:
- Guest stays over 30 consecutive days,
- State & Federal Officials or Employees,
- Charitable Entities – 501 (c)(3) or nonprofit organizations,
- Educational Entities (exempt from State hotel tax, but NOT local hotel tax), and
- 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 tax.
For assistance regarding Hotel Occupancy Taxes, please contact Janelle Chapman at 830-990-2023 or send an email to email@example.com
City of Fredericksburg Approves Agreement with Granicus, LLC
The City of Fredericksburg has approved an agreement with Granicus, LLC to provide Sales and Use Tax discovery and recovery services, and Hotel Occupancy Tax (HOT) collection and Short-term Rental (STR) permitting and monitoring services. Services provided by Granicus will include:
- Tax Collection: Makes tax reporting and collection easy for hosts and staff to submit and review online. Prompt for unreported periods and collect on back taxes.
- Compliance Monitoring: Ongoing monitoring of STRs for zoning and permit compliance, coupled with systematic outreach to illegal short-term rental operators.
- Mobile Permitting and Registration: Makes your STR permitting processes available online and mobile enabled (includes cellphones and tablets), easy, and accessible. Guides applicants through what can otherwise be complex permitting workflows even if they are on the go!
- Rental Activity Monitoring: Provides you with estimated occupancy and rental revenue for each property based on machine learning modules unique to govService Host Compliance. Automatically identifies and flags audit candidates who are under-reporting on taxes or exceeding occupancy regulations.
- Sales and Use Tax Review: Ensures the proper application of Local Sales and Use Tax law, and identify those that may be underreporting and underpaying sales tax.