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State hotel‑tax rules: association leader outlines two‑part test and nine allowed categories
Summary
Scott Jaza of the Texas Hotel and Lodging Association told Visit McKinney the local hotel occupancy tax may be spent only when expenditures both directly promote tourism and the hotel/convention industry and fit one of nine statutory categories; he explained caps and practical tests and answered board questions about grants and transportation.
Scott Jaza, president and CEO of the Texas Hotel and Lodging Association, gave a detailed legal and practical primer on the local hotel occupancy tax, urging boards to apply the two‑part statutory test before funding projects. “Every expenditure of the local hotel tax must directly promote tourism and the hotel and convention industry,” Jaza said, emphasizing that the law requires a direct, not indirect, promotional impact and that tourism is defined by bringing people from another city or county.
Jaza walked the board through the nine statutory categories that can qualify for hotel‑tax spending — convention centers and visitor centers; registration of convention delegates; advertising and promotion; promotion of the arts (subject to a 15% cap); historical restoration and preservation (15% cap); sporting events; sporting facilities (with a five‑year return requirement); downtown transportation/shuttles; and tourism‑related signage — and gave practical tips on setting ROI standards, minimum advertising spend, reserve policies and tourism public improvement districts. Board members asked about using hotel tax for short, one‑day festivals and for airport shuttles; Jaza and staff discussed minimum room‑night thresholds and legal limits on airport runs.
