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HB 5165

Relating to the use of municipal hotel occupancy tax revenue in certain municipalities.

89th Legislature (2025) Introduced by Brooks Landgraf

HB 5165 expands how certain Texas municipalities can spend hotel occupancy tax revenue, giving cities greater flexibility in deploying visitor-generated funds beyond traditional tourism-focused restrictions.

Referred to Economic Development
#monahans #cityof(gz9wd) #taxation--hotel #moteloccupancy(i0806)
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WeVote Research Nonpartisan
Bill Summary · HB 5165

Legislative bill overview

HB 5165 modifies how certain Texas municipalities can spend hotel occupancy tax (HOT) revenue, which is the tax collected on hotel room rentals. The bill appears to expand or redirect the permitted uses of these tax revenues beyond current restrictions, allowing municipalities greater flexibility in deploying funds collected from visitors. The specific mechanics of this reallocation would depend on the bill's detailed provisions regarding eligible expenditure categories.

Why is this important

Hotel occupancy taxes generate significant revenue in Texas tourism destinations, and how these funds are spent directly affects local economic development, tourism infrastructure, and community services. Changes to HOT spending authority can shift resources between competing priorities like tourism promotion, convention centers, sports venues, or general municipal services, impacting both visitor experiences and local taxpayer outcomes. This is particularly significant for smaller municipalities seeking revenue alternatives to property or sales taxes.

Potential points of contention

  • Tourism vs. General Services: Whether HOT revenue should remain dedicated to tourism-related infrastructure and marketing or be permitted for broader municipal purposes could pit tourism industry advocates against those prioritizing general city services
  • Equity Among Municipalities: The bill's reference to "certain municipalities" suggests differentiated rules that may benefit some cities over others, potentially raising fairness questions about unequal treatment
  • Visitor Tax Purpose Debate: Some argue taxes on hotel stays should primarily benefit tourists and tourism infrastructure rather than general resident services, while others see municipal flexibility as necessary fiscal management

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

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