Frequently Asked Questions

The Austin Tourism Public Improvement District is funded through an “assessment” that the City of Austin levies against every hotel with 100 or more rooms within the City of Austin. The assessment is calculated at 2 percent of the “taxable room night revenues” of the hotel each quarter. The hotels can either pay the assessment out of their own budget or can do a pass-through fee to the guests, often labeled a Tourism PID Fee. This two percent Tourism PID (TPID) fee is typically charged on each room night folio at 2 percent of the taxable room night charges. This TPID fee to the guest is not a “tax.” It is a fee that hotels choose to charge to recover their costs for the tourism public improvement district assessment that is levied against the hotel by the city. A hotel cannot characterize or list the fee as a “tax” because the City of Austin did not impose the assessment against the guest, they impose the assessment against the hotel. The TPID fee charged by a hotel is similar in nature to a “state cost recovery fee” that some hotels charge on a guest folio to recover the cost of certain state taxes imposed against the hotel.

The implementing state legislation that allowed Austin to create a Tourism PID only allowed hotels with 100 or more rooms to participate in the District and be subject to the two percent assessment.

All ten of the existing Tourism PIDs in Texas have provided in their TPID Service Plan that the TPID assessment would only apply to hotel room night revenue that is subject to local hotel tax. Accordingly, if a hotel room night is exempt from local hotel tax, it is also exempt from the Tourism PID Fee. This rule that the TPID assessment only applies to hotel room night revenue that is subject to local hotel tax is not mandated by state law but it is a mandatory feature of how the Austin Tourism PID was structured when it was proposed by area hoteliers and how it was adopted by the Austin City Council.

No, the TPID Fee assessed by the hotel only applies to taxable room night revenue. Meeting room revenue is not considered “sleeping room” revenue and therefore is not subject to local hotel tax. Because meeting room revenue is not subject to local hotel tax, it is also not subject to the local TPID Fee by a hotel. On a separate note, in most cases, meeting room rental is subject to state hotel occupancy tax, but again that does not make the meeting room rental subject to the TPID Fee by a hotel.

The City will treat the application of TPID fees to no-shows and to cancellations in the same way the city treats the application of local hotel tax in these scenarios.

For no shows, if the hotel does not charge anything to the guest for the no show, there would not be any amount on which to charge either local hotel tax or TPID Fees.

However, for cancellation fees, if the cancellation fee charged by the hotel is the full amount of the nightly room charge, the local hotel tax and the TPID fee would both apply.

Alternatively, if the cancellation fee is a reduced charge of less than the full amount of the nightly room charge, our understanding is that the State Comptroller has opined that the state hotel tax is not due on a reduced penalty or cancellation charge. Usually Texas cities treat the application of local hotel tax in the same way as the State Comptroller but they are not required to do. The City of Austin Finance staff should be consulted on how they will treat reduced cost cancellation fees in terms of the application of local hotel tax and/or Tourism PID Fees.

TPID hotels are liable for remitting to the city each quarter 2 percent of their “taxable gross room night rental revenue” to satisfy the TPID “assessment.” This amount is due whether or not the hotel collected a separate TPID Fee from the guest.

The TPID Fee applies to any fee that is added onto each room night charge by the hotel. Accordingly, the TPID Fee would apply to resort fees, state cost recovery fees, and any other nightly fee that is considered room night revenue that is subject to the local hotel tax.

On legal related questions, you can contact Scott Joslove with the Texas Hotel Association at 512-565-5292. For questions related to the process for remittance of the two percent TPID assessment, you can contact the City at 512-974-2590 (ext. 1) or can email the city staff at hotels@austintexas.gov.

Yes, on a $100 room rate, there would be a two percent TPID fee charged by the hotel and that would amount to $2.00. The combined $102 would all be subject to the 11 percent city hotel tax and the 6 percent state hotel tax. It is important to note that the TPID fee is two percent of whatever the room rate charges are; it is not a set dollar amount per night. For example, if your room night charges are $349 per night, the 2 percent TPID fee would be $349 multiplied by 2 percent or $6.98.

No, TPID fees only apply to hotel stays on April 1 or thereafter.

Yes, the TPID fee would apply to all stays on or after April 1, 2025, unless an administrative exclusion applies. For example, a hotel can exclude a room night booked prior to January 1, 2025, if there was a contract in place prior to January 1, 2025 that does not allow a unilateral modification of the fees or other applicable charges that can be assessed against the guest. However, it should be noted that many hotel group contracts or reservation policies have a clause that allows the hotel to add on any applicable taxes, fees or assessments that are in existence at the time of the guest stay. If the hotel has the authority in the reservation contract to modify its applicable fees, it must include the TPID fee for any hotel stays that take place on or after April 1, 2025. If there is no such ability of the hotel within its contract or reservation to modify the taxes and/or fees that are applicable to the stay, it is possible that the “administrative exclusion” would apply. This administrative exclusion would NOT apply on stays that take place after June 30, 2025. For stays that take place after that date, the hotels are responsible for paying the TPID assessment on the hotel room night rental revenue, regardless of whether the hotel was able to pass that charge on to a guest/customer as an additional charge. For any contracts or extensions of a contract that allow the hotel to apply the taxes, assessments, and fees that are applicable at the time of the guest stay, the TPID Fee would be applicable to any contract that includes a stay after April 1st. The Hotel should contact the City at hotels@austintexas.gov if it believes it has any contracts that are covered by this administrative exclusion to verify applicability.

The TPID was created effective January 1, 2025 and the two percent assessment applies to all reservations made on or after January 1, 2025 for room night stays that are on or after April 1, 2025. The prepaid amount should have included the TPID Fee.

For groups or individual guests who book a stay that takes place partially when the TPID assessment is not in place (prior to April 1, 2025) and partially when the TPID is in effect (April 1 and thereafter), it would make sense for the hotel to create two folios, one for the portion of the stay that is exempt from the TPID assessment and one for the portion of the stay that is subject to the TPID assessment. But it is possible that hotels may have alternative methodologies that they prefer to use to address this scenario.

If an annual room contract was executed prior to January 1, 2025, it could qualify for an administrative exclusion for the year noted in the contract if the contract does not allow for an additional fee such as a TPID Fee to be added (e.g. does not have a clause that provides authority of the hotel to add on any applicable taxes or fees that are in existence at the time of the guest stay). This administrative exclusion would only apply on stays through June 30, 2025. For stays beyond that date, the hotels are responsible for paying the TPID assessment on the hotel room night rental revenue, regardless of whether they were able to pass that charge to a guest/customer as an additional fee. For any contracts or extensions of contract that allow the hotel to apply the taxes and fees that are applicable at the time of the guest stay, the TPID Fee would be applicable regardless of when the contract was executed. For contracts that are executed on or after January 1, 2025, the TPID assessment would also be applied. The Hotel should contact the City at hotels@austintexas.gov if it believes it has any contracts that are covered by this administrative exclusion to verify applicability.

If a guest prepays for a hotel night prior to January 1, 2025, it could qualify for an administrative exclusion if the conditions and policies in place for the pre-paid reservation do not allow for an additional Fee to be added onto the prepaid reservation (e.g. the policies do not include a clause that allows the hotel to add any taxes or fees that are applicable at the time of the guest stay). This administrative exclusion would only apply to stays through June 30, 2025. For stays beyond that date, the hotel is responsible for paying the TPID assessment on the hotel room night rental revenue, regardless of whether the hotel was able to pass that charge on to a guest/customer as an additional charge. For any contracts or extensions of contract that allow the hotel to apply the taxes and fees that are applicable at the time of the guest stay, the TPID assessments would be applicable regardless of when the contract was executed. For contracts that are executed on or after January 1, 2025, the TPID assessment would also be applied. The Hotel should contact the City at hotels@austintexas.gov if it believes it has any contracts that are covered by this administrative exclusion to verify applicability.

The TPID payments will be remitted to the City in the same format that local hotel tax is remitted to the City, on a quarterly basis using the same schedule, the same technology, and the same local hotel tax forms that the City of Austin will use for collection of local hotel tax. Of course, the electronic and paper forms will be adapted to include the TPID assessment. For further information, the hotels should contact the City Finance Department at hotels@austintexas.gov or by phone at (512) 974-2590. It should be further noted that, the TPID assessment will NOT be collected with the payment of annual property taxes and has nothing to do with the property tax collection process.

The TPID assessment amount is remitted quarterly along with the payment of local hotel tax. The assessment is calculated as 2 percent of the “gross taxable hotel room night rental revenue” for each quarter.

It is up to the hotel whether to mandate the payment of the TPID Fee by the guest. That being said, the hotel is liable for the two percent TPID assessment amount whether the guest pays the TPID Fee or not.

State law does not provide mandatory wording for a pass through charge for the TPID. We suggest the charge be labeled Austin TPID Fee or Austin Tourism PID Fee or Austin Tourism PID Recovery Fee. Further, we would urge hotels to list the Austin TPID Fee with the guest room charges and not group the Fee with the room night taxes. Further, it is vital that the TPID Fee not be labeled as a tax since it is not a tax.

The TPID remittance will be made online each quarter along with your local hotel tax payment through the exact same process and schedule. The online system will break down the local hotel taxes that are due and the two percent TPID assessment that is due, and then the system will ask the hotel to make one cumulative payment amount that quarter that will be include both the hotel tax amount and the TPID assessment amount.

The City has indicated that prior to the date of the first remittance deadline for local hotel tax and TPID assessments, the City will publish their documentation protocol for an “administrative exclusion” of the TPID Fee. The Hotel should contact the City at hotels@austintexas.gov if it believes it has any contracts that are covered by this administrative exclusion to verify applicability.

In the case of federal travelers, state agency travelers who immediately claim the local hotel tax exemption, and other immediately exempt guests, the hotel would not collect a TPID Fee on the exempt local hotel tax room night revenue.

For over 30-day stays, if the guest pays in full for all 30 days and the payment is not subject to refund, the guest would be immediately eligible for a local hotel tax exemption for their first 30 days and for any additional consecutive days of their extended stay.

However, for some over 30-day stays, the guest may pay night-by-night or week-by-week and they may not end up staying the full 30 days. In such cases, the local hotel tax and the state hotel tax, as well as the TPID Fee should be charged by the hotel for each night until the guest has stayed 30 consecutive days, and on Day 31 of their stay, the hotel can refund the local and state hotel tax, and the TPID Fees to the guest folio. For every subsequent consecutive night of the extended stay after Day 30, the state and local hotel tax, as well as the TPID Fee should not be charged to the guest.

The application of the TPID Fee has nothing to do with whether the state hotel tax applies to the stay. In other words, the fact that a charitable entity guest is exempt from the state hotel tax would not impact the liability of that guest to pay both the local hotel tax on their stay and the TPID Fee on their stay. Accordingly, the charitable entity guest would be exempt from state hotel tax, but they would pay local hotel tax and the local TPID Fee on each night’s stay.

As noted above, if the guest has an over 30-day reservation, and they prepay for each 30-day period, and the payment is non-refundable, you do not need to collect state or local hotel tax or the TPID Fee. However, if the guest pays night-to-night, or week-to-week, or if the guest could check out earlier than a full 30 days, then the hotel should first charge the hotel taxes and TPID Fee for the first thirty days of the stay and should only refund the taxes and TPID Fees for Day 31 of their stay and thereafter when the guest qualifies for the over 30-day exemption. After the first 30 days, all subsequent consecutive days of a guest stay can be treated as exempt from state and local hotel tax and TPID Fees.