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HB 3626 would amend current Tax Code by adding a subsection that would authorize certain municipalities to use the revenue collected from the hotel occupancy tax to directly enhance and promote tourism.
The bill is a local bracketed bill which would only add municipalities in the bracketed area as eligible for the hotel occupancy tax.
This legislation violates our principles of limited government and free markets because the hotel occupancy tax distorts the free market by favoring certain businesses over others, raises prices on consumers, and encourages government spending.
The role of a limited government is not to grow tourism or to subsidize certain event facilities with taxpayer money. The role of government is to set in place the lightest possible regulatory framework to allow businesses to compete fairly in a free market to attract customers, including tourist customers. If the businesses that will profit from increased tourism (including hotels, restaurants, event venues, museums, art galleries, etc.) want to attract more tourists they should form a dues paying organization in which members make contributions toward projects that will increase tourism to the benefit of the participating organizations. All of this can be done without the government involving itself by collecting a tax and using the tax revenue to promote tourism. For these reasons we oppose HB 3626.