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HB 1039

Relating to the use of hotel occupancy tax revenue by certain municipalities and the authority of certain counties to impose a hotel occupancy tax; authorizing the imposition of a tax.

89th Legislature (2025) Introduced by Eddie Morales

Texas bill expands municipal and county authority to impose and allocate hotel occupancy tax revenue with greater flexibility in fund usage.

Referred to Economic Development
#alpine #cityof(gb1kq) #border(s0045) #citygovernment--finance(i0062) #taxation--hotel #moteloccupancy(i0806)
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WeVote Research Nonpartisan
Bill Summary · HB 1039

Legislative bill overview

HB 1039 modifies how Texas municipalities and counties can use hotel occupancy tax (HOT) revenue and expands certain counties' authority to impose such taxes. The bill appears to give local governments greater flexibility in allocating HOT funds and potentially allows additional jurisdictions to establish new hotel occupancy taxes.

Why is this important

Hotel occupancy taxes are significant revenue sources for Texas cities and counties, typically funding tourism promotion, convention centers, and economic development. Changes to how this revenue can be spent or who can collect it directly affect local budget priorities and the competitiveness of tourism destinations across the state.

Potential points of contention

  • Revenue allocation disputes: Expanding how HOT revenue can be used may redirect funds away from traditional tourism promotion, potentially conflicting with hotel industry expectations about tax purpose
  • Competitive disadvantage: If the bill allows new counties to impose HOT while existing ones cannot, it could create uneven tax burdens across regions and disadvantage some hospitality businesses
  • Local control vs. state mandates: The bill may impose state-level requirements on local tax authority that municipalities view as overreach into their fiscal independence

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

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