Buda adjusts language in hotel tax ordinance for broader use

Updating language in Buda’s existing hotel occupancy tax (HOT) ordinance will now pave the way for the city to expand how it uses those funds.

The measure, approved by a 7-0 Buda City Council vote Aug. 28, was done in coordination with changes in state law, which took place during the 2017 Texas Legislative session.

Lysa Gonzalez, Buda tourism director, said one of the key changes was to identify city owned sports facilities in the list of uses for HOT funds.

Cities in Texas that collect HOT can use those funds for nine specific uses, including wayfinding signage. HOT is collected by the state from hotel operators or managers who rent a room or space in a hotel costing $15 or more each day. The tax applies not only to hotels and motels, but also to bed and breakfasts, condominiums, apartments and houses, according to the Texas Comptroller’s Office. Local hotel taxes apply to sleeping rooms costing $2 or more each day.

Guests staying at Buda hotels pay a total HOT rate of 13 percent.

However, Gonzalez said cities must receive legislative approval in the form of a resolution to collect HOT for certain uses, which Buda received in 2017.

The move allows Buda to use HOT funds to help provide some relief for a proposed $491,080 improvement at Sportsplex park, which could include the installation of light standards.

Gonzalez said those improvements were something the city considered in the past. Proposed improvements at the Sportsplex could allow for the city to host tournaments, which in turn could provide a boost to tourism.

Other uses would include the purchase of land for the construction of additional sports complexes in the future, Gonzalez said.

The city also made changes on defining the time period when HOT became delinquent, along with further defining how funds can be used for arts and culture.

According to state law, cities cannot use more than 15 percent toward arts and culture. Gonzalez said the update was done in coordination with Buda’s City Park improvement project, which includes an outdoor amphitheater.

HOT can be used for music performances, art shows and painting exhibitions.

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