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Relating to the use of municipal hotel occupancy tax revenue in
No fiscal impact to the state is anticipated.
SB 1393 would authorize the City of Odessa to use the hotel occupancy tax to construct a sports facility on land owned by state universities.
Texas Action opposes SB 1393 on the basis of limited government and free markets. 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. It is emphatically not within the proper role of government to use taxation in this manner.
We recommend following the Texas model and reducing or eliminating the HOT altogether. The best economic model is one in which regulation is light, sensible, and transparent.