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Bill

HB 2965

Relating to the applicability of a hotel occupancy tax in and the use of hotel occupancy tax revenue by certain counties.

89th Legislature (2025) Introduced by Don McLaughlin

HB 2965 modifies hotel occupancy tax applicability and revenue uses for specific Texas counties, potentially shifting tax burden distribution and altering municipal funding sources.

Referred to Ways & Means
#frioriver(g0483) #taxation--hotel #moteloccupancy(i0806)
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Bill Summary · HB 2965

Legislative bill overview

HB 2965 modifies how hotel occupancy taxes (HOT) apply in certain Texas counties and establishes new rules for how those tax revenues can be used. The bill appears to adjust the applicability threshold or collection mechanisms for hotel occupancy taxes in specific counties while potentially expanding or restricting permissible uses of the revenue.

Why is this important

Hotel occupancy taxes fund tourism promotion, infrastructure, and convention facilities in many Texas communities. Changes to how these taxes apply or how revenue is spent directly affect both the hospitality industry's tax burden and local government funding for tourism-dependent economies. This could shift tax incidence between counties or alter how communities invest in visitor attractions.

Potential points of contention

  • County-specific application: Creating differential tax rules for certain counties raises fairness questions about whether the bill unfairly advantages or disadvantages particular regions or creates competitive imbalances
  • Revenue restrictions: If the bill limits permissible uses of HOT revenue, municipalities may lose funding sources for projects they currently support, while expansion of uses could shift money away from traditional tourism infrastructure
  • Implementation complexity: County-specific tax applicability rules could create administrative burdens and compliance challenges for hotels operating across jurisdictions

Compiled from official sources — confirm details with the bill’s official record.

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