Texas Comptroller of Public Accounts STAR System
October 29, 2009
As I understand your question, you are asking if tour operators and travel
agencies located outside the United States are required to collect and remit
Texas hotel occupancy tax on the difference in the amount charged their
customers for hotel rooms in Texas and the amount paid to a hotel for the
rooms. You asked if all tour operators worldwide are obliged to register for
collecting and remitting hotel tax in Texas.
Whether a foreign tour operator or travel agent is responsible for collecting
and remitting hotel occupancy tax to the state of Texas depends on the specific
activities engaged in by the operator or agent, including the terms of any
applicable contracts or agreements, to determine if the company is acting as an
agent in obtaining lodging for customers or is reselling hotel rooms to
An agent has a contractual relationship to act on behalf of the agentís client.
Some typical activities engaged in by an agent for hotel tax purposes were
described in Comptrollerís Decision No. 32,105 (STAR document #9504H1346F01).
The Petitioner in this case was a company that organized and operated
educational music festivals for secondary school students. The company also
arranged for lodging for schools with students attending the festival. The
company reserved the rooms in the schoolsí names, forwarded payment for the
rooms to the hotel after receiving payment from the school, forwarded the
schoolís room assignments to the hotel and charged the schools
dollar-for-dollar for the rooms (i.e., there was no mark up on the cost of
rooms charged by the company). If a school cancelled its hotel room
reservation, the schoolís deposit was refunded according to the hotelís
Based on these facts, the Comptroller concluded that the company was an agent
for the schools and not a seller of entertainment and lodging: ďAs for hotel
rooms, these accommodations were not bought in a block by the Petitioner and
then resold to the schools. The school purchased the hotel accommodations using
the Petitioner as their agent.Ē Therefore, the company in question was not
required to collect and remit Texas hotel tax.
Factors that indicate that a person is acting as an agent and not as someone
who is selling hotel rooms include the following: agents only reserve the
number of rooms requested, do not mark up the price of the rooms and any room
cancellation policies are those of the hotel and not set by the agent. Agents
pay hotels directly for rooms for their clients, including tax, and the hotels
are responsible for remitting the tax. An agentís separately stated charge for
services on a client invoice or bill is a commission and not subject to hotel
There are several factors we look at to determine if a room is being controlled
and sold by someone other than the hotel such that the operator or agent must
collect hotel tax on the charge to the customer. For example, we consider
hotel rooms to be resold when a tour operator contracts with a hotel to make
rooms available for rent to the tour operatorís customers for an agreed price
and then the tour operator marks up the room charge to the customer. The tour
operator needs to collect and remit hotel tax to the state on the marked up
price of the room. Credit may be taken for hotel taxes directly paid by the
operator to the hotel on the lower wholesale price of the room. Records must be
maintained to link tax paid by customers to the operator with tax paid to
hotels by the operator. We will also look at whether the tour operator sets it
own cancellation policies separate from those of the hotel and whether the
cancellation of the reservation by the customer can be handled by the hotel or
only through the operator. We consider whether the operator has agreements
with the hotels for rooms that may or may not be reserved by customers and what
the terms of those agreements are.
If there are specific facts that apply to your situation which are different
than those discussed above, please let us know and we will provide a response
based on those facts.
A completed Texas Hotel Occupancy Tax Questionnaire (form AP-102) will need to
be submitted to register to collect and remit the 6 percent state hotel
occupancy tax. Local hotel occupancy tax is administered by the local taxing
jurisdictions, so you will need to contact the county and, if applicable, city
where a hotel is located to determine local hotel tax responsibilities.
Our office does not maintain a list of other states in the U.S. that do or do
not impose a tax on lodging or information about their laws and policies
regarding responsibilities to collect and remit state and local hotel taxes.
Links to forms, the State Tax Automated Research (STAR) system and other tax
information is on our ďHotel Occupancy TaxĒ Web page at
This opinion is based on the facts presented. Other facts, though similar, may
result in different answers.
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If you have questions or need more information, please contact me.
Donald S. Dillard
Oil & Gas, Fuels and Miscellaneous Taxes
Tax Policy Division
Texas Comptroller of Public Accounts
ACCESSION NUMBER: 200910594L
DOCUMENT TYPE: L
TAX TYPE: HOTEL