'Hotel Occupancy Tax (HOT) is not a “passthrough” tax like the Woodcreek Mayor, and City Council are saying and want you to believe. Here are the simple facts.
First, if HOT was a pass-through tax the State Comptroller would name it the “Guest Occupancy Tax” or “Overnight Tourism Occupancy Tax”, not Hotel Occupancy Tax (HOT). The subject of the tax is the Hotel, as stated in the name – HOTEL Occupancy Tax. Second, CHAPTER 351. MUNICIPAL HOTEL OCCUPANCY TAXES SUBCHAPTER A. IMPOSITION AND COLLECTION OF TAX, of the Texas Tax Code explicitly states the hotel is responsible for the imposition, collection, and remittance of the tax to the City. It doesn’t say the overnight guest is responsible for paying and remitting a tax. Moreover, a city or municipality, like Woodcreek, can enforce legal action to make a lodging operator pay the tax. The liability and burden are squarely on the hotel operator, not the overnight guest. Therefore, the subject of the tax and liability for payment is the Hotel, not the guest.
Third, in a downward spiraling economy where inflation is higher than it has been in decades and layoffs are rampant, do you really think any guest is going to pay 7% more because the City of Woodcreek re-enacts a HOT for overnight stays, especially when the guest can stay in a hotel in any of the unincorporated areas surrounding Woodcreek, and pay 7% less for the same or similar accommodations? Of course, they won’t.
Think about it this way. If you have two gasoline stations and one charges 7% more per gallon than the one across the street, where would you get your gas? Exactly! Consumer behavior is the same when it comes to staying overnight at a hotel. It’s just that simple, why spend more when you can get the same for 7% less around the corner.
HOT is NOT a passthrough tax. City Council’s irresponsible push to re-enact a HOT will hurt the hotel operators; upset residents like myself, who just want peace and quiet in our neighborhoods; and only serve to damage our economic prosperity and quality of life.
Our Woodcreek City Council and Mayor need to stop lying to us. HOT is NOT pass-through tax!
— Jerry Tang, General Manager, Cypress Creek Cottages, Woodcreek resident
