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Under current law, a municipality that imposes a hotel occupancy tax may permit the person required to collect and pay over the tax to keep up to one percent of the tax for the purposes of covering the costs of tax collection. In addition, the municipality may spend up to one percent of the tax to create, maintain, and operate an electronic tax administration system.
HB 1300 would cap municipal spending on electronic tax administration to $75,000. In addition, a municipality that implements an electronic system would be able to permit the person collecting and paying the tax to keep one percent to cover the costs of electronic administration. Finally, a municipality would be prohibited from using revenue designated for a tax administration system to conduct an audit.