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Relating to the use of municipal hotel occupancy tax revenue in
No fiscal implication to the State is anticipated.
HB 3356 would allow the city of Cedar Park to use the hotel occupancy tax to promote tourism and and the convention and hotel industry by constructing, improving, equipping, repairing, maintaining, operating, or expanding a coliseum or multi-use facility.
Texas Action opposes HB 3356 for violating the principles of free markets and limited government. We generally oppose creation or expansion of hotel and occupancy taxes. First, funding projects through the hotel and occupancy tax (HOT) offers little transparency—lawmakers have no way to verify whether the disincentive caused by the high cost of the HOT is offset by gains elsewhere in the tourism industry. Second, the tourism and travel industry, like any other private industry, should not rely on taxpayer subsidies in order to flourish. The best economic model is one in which regulation is light, sensible, and transparent.