City of Amarillo to outline tax responsibilities for short term rentals

City of Amarillo to outline tax responsibilities for short-term rentals

AMARILLO, TX (KFDA) - Short term rentals and bed and breakfasts can now be classified as hotels within Amarillo, under Texas state law.

This means these properties will be required to pay the local hotel occupancy tax (HOT), alongside the state tax.

The City of Amarillo says some short-term rentals and bed and breakfasts in the city have already been paying the local hotel occupancy tax.

However, as the number of short term rentals grows, the city wants to clarify what is required.

“Some of those websites only collect the state portion on their behalf, which is 6%,” said Andrew Freeman, Director of Planning and Development Services for the City of Amarillo. “That does not include the city’s portion of 7% or the venue district’s 2%, so this is an opportunity for us to do a campaign for what their responsibilities are for a short term rental host.”

An estimated 165 short term rentals operate in the city on sites such as Airbnb or VRBO.

With this updated law, these places must register with the City of Amarillo’s finance department.

The city will work with a third-party vendor to reach out to all short-term rentals.

“We’ll be able to send letters and information to them to let them know what the process is and what the requirements are,” said Freeman. “Most of them don’t know what taxes they need to be paying, so we’ll be letting them know what the process is.”

Certain stays at these short term rentals will be exempt from paying this tax.

“The way the state rules work, if you exceed 30 days, you don’t have to pay HOT tax,” said Freeman. “Those long-term stayers in hotels or short-term rentals are exempt from paying HOT tax.”

Under the updated law, short term rentals will be classified as hotels, which could allow these rentals to work together with hotel chains.

“The key is that it has to compliment it,” said Dan Quandt, Senior Vice President of the Amarillo Convention and Visitor Council. “We all have to work together to try and increase those numbers. If we don’t increase the numbers of travelers coming to town, then all of a sudden we’re just trading customers.”

Quandt says the CVC will continue to track the occupancy in both forms of lodging.

“We can monitor that and see how strong that market is and what parts of the city they’re in,” said Quandt. “It allows Amarillo to really offer what people are looking for in their lodging.”

After giving initial approval on Tuesday afternoon, Amarillo’s city council will finalize the changes to the law next Tuesday.

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