Taxing Times

A New Tax on Airbnbs Could Generate Millions for Houston Tourism and the Arts

Houston will now collect a Hotel Occupancy Tax on Airbnbs.

By Gwendolyn Knapp July 2, 2019

Airbnbs will now pay a 7 percent Houston hotel occupancy tax.

Houston has just become the largest Texas city to reach an agreement with Airbnb for collection of a citywide Hotel Occupancy Tax.  

Starting July 1, a 7 percent tax on Airbnb rentals will go directly to Houston First, the government corporation that promotes and markets Houston travel and tourism, arts and entertainment venues, and the convention center.

The tax is expected to generate an additional $3 million per year to directly benefit our tourism and art communities. 

Here's Mayor Sylvester Turner on why the tax is good for Houston:

Airbnb’s agreement to collect a tax that had already had been levied on hotel and motel guests will boost Houston First’s efforts to further increase the number of visits to Houston, which drew a record-high 22.3 million people in 2018. In turn, that will mean more dollars flowing into the Houston economy, creating even more jobs and benefitting Airbnb’s business and its affiliated local hosts. The additional funding for Houston’s thriving arts scene is icing on the cake and will add to the dynamic forces that are making Houston a more attractive place to enjoy for residents and visitors alike.

Houston's Hotel Occupancy Tax is required by the state to be used to boost the city’s travel and tourism industries and local art. The state also requires that 19.3 cents of every dollar collected goes to city arts programs—the highest percentage of HOT funding dedicated to the arts in the state. Last year, Houston Airbnb hosts earned a combined $72 million (or about $5,100 each) in supplemental income.

Airbnb also collects a statewide Hotel Occupancy Tax on behalf of all Texas hosts (including in Houston) under an agreement with the Texas Comptroller’s Office, and it delivered $15.3 million in tax revenue to the state in the first year of the agreement, nearly doubling the initial expectations.

“This is a great day for Houston’s art community," Houston Arts Alliance CEO John Abodeely says, "as we count on this revenue to grow our vibrant arts landscape. We know that arts and culture fuel tourism for Houston. We hope other short-term rental platforms will follow Airbnb’s good-citizen example.”

If this means more grant money for our city's burgeoning artists, we definitely agree. 

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