City ordinance #2002-12 details the requirements for the reporting and collection of local Hotel Occupancy Tax (HOT) for all hotels, motels, short-term rentals, bed & breakfasts, etc operating within the Kerrville City limits and the City's Extraterritorial Jurisdiction (ETJ). The City’s ETJ includes unincorporated areas located 1 mile outside the Kerrville City limits. Properties located within the ETJ are required to collect, report, and remit occupancy taxes pursuant to ordinance 2002-12. City ordinance 2022-28 updated zoning requirements and other matters involving short-term rental units. 

Hotel owners, operators, or managers (as defined by ordinance #2002-12) must collect state and local Hotel Occupancy Tax from guests who rent a room or space in a hotel.

For online registration and filing, please visit: www.hoteltaxonline.com. For registration assistance, call Avenu Insights and Analytics 877-693-4435.

RATES

According to the Texas State Tax Code, the State of Texas imposes an occupancy tax rate of 6% on hotels, motels, and short-term rentals, and cities can impose their own tax rate. The City of Kerrville’s current occupancy tax rate is 7%. Hoteliers operating within the City of Kerrville and its ETJ should collect a total of 13% on all stay-related taxable fees. Occupancy taxes apply to the overnight stay as well as other fees assessed as prescribed by law. Please refer to the Comptroller's Reference Guide(texas.gov) to determine taxable fees. Occupancy taxes are to be collected from hoteliers and remitted to state and local governments as outlined in Texas Tax Code Chapter 156.  

REPORTING AND REMITTANCE DUE DATE

Hotel Occupancy Tax is required to be reported and paid by the 15^th of each month. A report must be submitted to Avenu Insights and Analytics (the City's Occupancy Tax collection agency) even if the total stays during any month was zero. Failure to report and pay HOT may result in penalties, up to and including legal action. All hoteliers are subject to an audit of revenue and exemptions and should therefore maintain all records for a minimum of five years.

EXEMPTIONS

Exemptions apply to organizations that the State of Texas recognizes as exempt from paying State Hotel Occupancy Tax. While there are some exemptions from payment of State Hotel Occupancy Tax, there are very few exemptions from local occupancy tax. Even if an entity is exempt from paying hotel occupancy tax, typically the operator is still required to collect and remit the City portion of hotel occupancy tax.

To check an entity's exemption status, please see the Comptroller's Entity Search Tool Texas Tax-Exempt Entity Search. Entities not on the list are not exempt.

A guest staying 30 or more consecutive nights is automatically exempted from occupancy tax (state and local). Invalid exemptions are one of the most common audit findings.

Please see the Texas Comptroller's Hotel Occupancy Tax page and Texas Comptroller Quick Reference Guide for more information about exemptions.

WHAT IS AVENU?

Avenu Insights and Analytics provides the following services:

• Online collection of hotelier monthly reports and payments
• Monitoring of delinquent reporting and payment of occupancy tax and communication with both hoteliers and the City of Kerrville regarding delinquencies
• Remitting collections to the City of Kerrville

For more information about Avenu, please visit https://www.avenuinsights.com.

WHAT IS CONSIDERED A SHORT-TERM RENTAL?

A Short-Term Rental is a privately owned dwelling being rented for less than thirty days charging $2 or more per night. This includes spaces rented through commonly used booking sites such as AirBnb, HomeAway, VRBO, FlipKey, and others. Short-Term rentals are only allowed to operate in certain areas of the City as outlined by the City's zoning code and ordinance #2022-38. For more information about where short-term rentals are allowed, please contact the City of Kerrville Planning Department.

SHORT-TERM RENTAL PERMIT

On December 13, 2022, City Council adopted a short-term rental permit creating Chapter 80 of the Zoning Code which includes permit requirements for short-term rentals (STR). An annual permit is required, beginning January 1, 2023, for all STR properties within the City and the ETJ. Permits are valid for one year, expiring on December 31st of each year. An initial permit may be issued for a lesser amount of time so as to eventually align with the standard permit dates. Permit renewals are required annually in accordance with Chapter 80 section 14. 

Short-term rentals in the ETJ are not subject to City Zoning Codes, however, they are subject to permitting for STR operation and Occupancy Tax requirements. Short-term rental units with a valid Conditional Use Permit or STRs allowed by right per the Zoning Code are required to obtain a permit under the provisions of this chapter on or before June 1, 2023. The annual fee for a permit to operate a short-term rental unit are part of the City's annual budget process. These fees are located within the Fee Schedule approved by City Council. Permit fees are not refundable.

Short-Term Rental Permit Fees as of January 1, 2023

• Short-Term Rental Permit Fee (Initial): $100.00 per property
• Short-Term Rental Permit Fee (Renewal): $50.00

Please contact Development Services to apply for a permit.