Hotel Occupancy Tax Funds

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Hotel Occupancy Tax Application and Collateral

City of Del Rio Hotel Occupancy Tax (HOT) Funds

By ordinance, the City of Del Rio approves a local hotel occupancy tax with portions of the fund to be dedicated to support convention and tourism centers, promotional and tourist advertising of the City, promotion of the arts, historical preservation and program support for events and activities that attract tourists to the City of Del Rio.

I. Use of HOT Funds

Municipal hotel occupancy taxes are primarily governed by Chapter 351 of the Texas Tax Code. The HOT funds are generated as a result of a person paying for the use or possession, or for the right to the use or possession, of a room in a hotel, motel or bed and breakfast, with a cost of $2 or more each day, that is ordinarily used for sleeping, not on a permanent basis.

There is a two-part test for every expenditure of local Hotel Occupancy Taxes.

  • Criteria # 1 Every expenditure must directly enhance and promote tourism and the convention and hotel industry.
  • Criteria # 2 Every expenditure MUST clearly fit into one of nine statutorily provided categories.

The nine categories for expenditure of the hotel occupancy tax are as follows:

  1. Funding the establishment, improvement or maintenance of a convention center or visitor information center.
  2. Paying the administrative costs for facilitating convention registration.
  3. Paying for advertising, solicitations and promotions that attract tourists and convention delegates to the city or its vicinity. (1/7 of total funds must be spent on advertising and promoting the city and its vicinity to attract tourist and hotel/convention activity)
  4. Expenditures that promote the arts, including instrumental and vocal music, dance, drama, folk art, creative writing, architecture, design and allied fields, painting, sculpture, photography, graphic and craft arts, motion pictures, radio, television, tape and sound recording, and other arts related to the presentation, performance, execution and exhibition of these major art forms.
  5. Funding historical restoration or preservation programs. This funding may be used in primarily two ways. First, to enhance historical restoration and preservation projects. Second, for activities or advertising and conducting solicitations and promotional programs to encourage tourists and convention delegates to visit preserved historic sites or museums. Either of those uses must be for activities, programs or events that are likely to attract tourists and hotel guests (limited to 15% of total funds).
  6. Funding certain expenses, including promotional expenses, directly related to a sporting event within counties with a population of under 1 million. This sporting event must include mostly participants from out of town.
  7. Funding the enhancement or upgrading of existing sports facilities or sports fields for certain municipalities. (THIS DOES NOT APPLY TO DEL RIO).
  8. Funding transportation systems for tourists.
  9. Signage directing tourists to sights and attractions that are visited frequently by hotel guests in the municipality.

II. Review Process

The Assistant City Manager reviews acceptable applications from individuals, groups and organizations applying for HOT funding. An acceptable application is one that is complete and meets the deadline requirements.

Each group, with an acceptable application, will be scheduled for a date and time to present their request to the City Council. At the presentation, Council may ask questions and seek clarification. A formal presentation is encouraged; however it is not required. Please submit all information to the Assistant City Manager for submittal to the City Council.

After presentations are made, Council will make initial funding recommendations. Notification of the initial funding recommendations will be emailed to all applicants. Funding recommendations may be less than the amount requested. Applicants will be notified by email of the City Council's final recommendations.

Any organization that owes tax dollars to the City of Del Rio will not receive funds until their debt is paid.

For more information about the HOT funding please contact Manuel Chavez, Assistant City Manager, at (830) 703-5307 or by email.

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