Bill > HB4095

This bill modifies the hotel occupancy tax rules for small coastal municipalities with a state ferry system, specifically those with populations of 5,000 or less. The bill allows such municipalities to temporarily increase their hotel occupancy tax rate up to 8% through voter approval, with this provision expiring on December 31, 2035. For eligible coastal municipalities currently levying a 7% occupancy tax, the bill permits the additional tax revenue (beyond the 7% rate) to be used for streetscape beautification and main street improvements, including pedestrian safety and accessibility projects. However, the municipality can only spend an amount on these improvements equal to what it spends from other funding sources in the same calendar year. The expanded use of tax revenue and the ability to increase the tax rate are also set to expire on December 31, 2035. The bill will take effect immediately if it receives a two-thirds vote in the Texas legislature, or on September 1, 2025, if it does not receive the required immediate-effect vote.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4095