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Council weighs adding authority to waive hotel-occupancy tax penalty and interest; no ordinance drafted yet
Summary
Lake Jackson council discussed whether to amend the city’s hotel-occupancy tax ordinance to allow the council to waive penalties and interest for lodging providers that demonstrate adequate cause. Staff said the ordinance currently does not provide a waiver mechanism; council asked staff to draft language for future consideration.
Lake Jackson City Council members on March 11 discussed whether to amend the city’s hotel-occupancy tax ordinance to permit the council to waive penalty and interest charges when a lodging provider can demonstrate adequate cause.
City staff described an audit by HDL, the contractor that collects hotel-occupancy tax and performs periodic audits, which identified one vendor that owes the city approximately $9,000 in unpaid tax. City staff said penalties on that amount would total about $1,800 and interest about $1,100 in the instance discussed, creating roughly $3,000 in additional charges. “In this case, the taxes that are owed of 9,000, the penalty would be 1,800 and the interest on that would be 1,100,” a city staff member said.
Council members asked whether the current ordinance includes language allowing council to waive penalty and interest. Staff replied the code does not include a waiver provision and legal counsel advised that language would need to be written into the ordinance if the council wants the authority to grant waivers on a case-by-case basis.
Why it matters: Adding a waiver mechanism would permit the council to hear appeals from lodging providers and potentially reduce penalty and interest assessed during audits, but several council members and the city attorney noted such a process can create complicated, discretionary decisions and could invite allegations of unequal treatment if not tightly defined.
Council made no formal change to the ordinance at the meeting. Staff said that if the council wants to move forward, the city attorney will draft proposed ordinance language for council review and the lodging provider would then be able to petition the council for relief under any new rules.
Next steps: Staff will prepare draft ordinance language for council consideration only if the council directs them to do so; no ordinance was introduced or adopted at this meeting.
