Hotel Occupancy Tax (HOT)



In the most challenging of times, in the middle of the COVID pandemic, Texans for the Arts Foundation (TFAF) launched the Municipal Hotel Occupancy Tax (HOT) Toolkit, an online resource for arts, municipal, hotel, and tourism leaders sharing what you need to know about Texas’ Municipal Hotel Occupancy Tax, Chapter 351 of the Texas Tax Code.

The goal of the HOT Toolkit is to ensure that the arts are at-the-decision-making-table and give voice as to why investing the allowable “up to 15% for the arts” is a sound investment in creativity and the social health and economic well-being of every community.


Added to Chapter 351 of the Texas Tax Code in 1977, “the arts” were recognized for playing a vital role in attracting businesses to Texas communities. They added dynamism, fostered a creative workforce, provided opportunities for all ages, backgrounds and generations to engage in civic life, and they built bridges for people of different cultures to live, play and work together.

Over the past 43 years, as travel and tourism across Texas grew, as the number of hotels increased and with the advent of short-term rentals like AirBnBs, HOT revenue became a major player in the tourism economy – from convention centers as anchor business enterprises, to convention & tourism bureaus as major communication and marketing drivers, to the arts and culture sector as the foundation for a community’s creative identity. Additional uses such as preservation, and in some communities, sports facilities and beaches, also grew to benefit from the Hotel Occupancy Tax.

While HOT revenue was increasing, confusion over the allowable uses of HOT including how the Tax Code really worked, who made decisions about the use of HOT, and how those decisions were implemented became frequent questions fielded by Texans for the Arts Foundation.

It became clear that a comprehensive resource was needed to make HOT accessible and understandable to stakeholders; namely, the arts, municipal, and hotel and tourism leaders.

"When the arts thrive, our communities thrive!"




Just as Texans for the Arts Foundation (TFAF) was setting a date for the official launch of the HOT Toolkit, the world turned upside down due to COVID-19. With the instant halt of travel and tourism, the shuttering of the arts and culture sector, and with municipalities facing critical economic and health crises, TFAF stopped the final planning and questioned whether the site would still be relevant, whether it should be reframed, whether it should be rewritten. With a grant from Houston Endowment, Texans for the Arts Foundation was able to undertake this significant project. Houston Endowment recognized that by investing in the research and development of the Toolkit, it would have a significant impact in the Greater Houston region and could have a statewide impact on increasing public resources for the arts. Additionally, the Toolkit would contribute to the conversation about the role the arts play in community health, well-being, and in the recovery of communities across Texas through and beyond the pandemic.

After a thoughtful pause, TFAF realized that now more than ever, we should focus on completing the Toolkit to ensure that as travel and tourism returns to our communities, we are ready and at-the-table, investing HOT receipts in a way that will contribute to the economic and social revitalization of our communities. In fact, it’s even MORE crucial now more than ever that stakeholders from arts organizations, municipalities, hotels, and the tourism industry work side by side with our communities’ best interests in mind.

In addition to the support from the Houston Endowment, Texans for the Arts Foundation's strong partnership with the Texas Hotel & Lodging Association (THLA) laid the groundwork for approaching the Toolkit through the respective arts, municipal, and hotel portals.  TFAF and THLA’s Memorandum of Understanding, drafted and signed in 2013, is a foundational document that has shaped the use of HOT in municipalities through a shared understanding of the tax law between both organizations, now further expanded with the language in the Toolkit!

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