Hotel Occupancy Tax

Every person or entity that owns, operates, manages or controls any hotel, or collects payment for occupancy in any hotel, must collect a 7% Hotel Occupancy Tax from their guests for the City of Allen (Sec. 2-6 of City Code). This tax is in addition to the 6% rate imposed by the State of Texas, which must be remitted separately to the State.

A Hotel Occupancy Tax Report must be filed monthly by the hotel owner, partner, corporation or organization, even if no tax is due.

The tax defines hotel as a building in which members of the public obtain sleeping accommodations for a cost of $2 of more each day. This includes a hotel, motel, tourist home, tourist house, tourist court, lodging house, inn, rooming house, or bed and breakfast. This definition does not include hospitals, sanitariums or nursing homes. 

Revenue derived from the Hotel Occupancy Tax is used to promote tourism and the convention and hotel industry in Allen. The City produces an annual report with a record of revenue and expenditures for the fiscal year.


Tax Report Requirements

A report must be filed with the City if you are a sole owner, partnership, corporation or other organization that owns, operates, manages or controls any hotel or motel in the city of Allen.

When to file your Hotel Occupancy Tax Report
A report must be submitted on or before the 20th of the month following the monthly reporting period. A payment in the amount of the tax collected must accompany this report for each calendar month of the year. If the due date falls on a Saturday, Sunday or City holiday, the next business day is the due date. A report must be filed even if no tax is due.

Penalties and interest for late payments

  • 1 to 30 days late: Pay all taxes collected + 5% penalty + 12% annual interest
  • 31 to 90 days late: Pay all taxes collected + 10% penalty + 12% annual interest (compounded monthly)
  • More than one fiscal quarter late: Pay all taxes collected + 15% penalty + 12% annual interest (compounded monthly)

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Exemption Guidelines

Employees and representatives of nonprofit religious, charitable, or educational organizations are EXEMPT from the STATE hotel tax when traveling on official business of the organization. The exemption DOES NOT cover local hotel taxes, which must be paid (State Comptrollers Rule 3.161).

Certain nonprofit entities are exempt from local taxes; they must provide a letter from the state comptroller’s office that authorizes their exempt status. If the nonprofit is unable to provide the letter, the hotel may check the Comptroller’s website for organizations that have been issued a letter of hotel tax exemption.

Any exemption claimed should be supported by a signed hotel occupancy tax exemption certificate.

NOT exempt from the local tax

  • Educational institutions (including State of Texas colleges and universities);
  • Religious and charitable organizations;
  • Local government entities; and
  • Contract employees of exempt organizations.

EXEMPT from the local tax

  • The United States government officers or employees when traveling on official business;
  • Military personnel traveling on official military business;
  • Certain State of Texas employees (judicial officials, heads of agencies and members of State boards and commissions of the State of Texas) when traveling on official business;
  • Diplomatic personnel who present a tax exemption card issued by the United States Department of State; and
  • Occupants whose use or possession extends thirty (30) consecutive days or longer.

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