HOT Compliance for Fredericksburg STR Hosts

Running a short-term rental in Fredericksburg can be rewarding, but figuring out hotel occupancy tax can feel confusing. You want to do things right, avoid penalties, and keep good records while you host happy guests. In this guide, you’ll learn who must collect and remit hotel occupancy tax, how rules change based on where your property sits, what platforms actually handle, and what records to keep. Let’s dive in.

HOT basics for Texas STRs

In Texas, furnishing a room or other living quarters for less than 30 consecutive days is generally taxable for hotel occupancy tax. Longer stays at 30 days or more commonly fall outside HOT, so keep clear documentation when a booking becomes a long-term lease.

The “operator” is the person or business that receives payment for the stay. That is usually you as the host or your property manager. Some platforms may collect and remit certain taxes, but that does not always remove your need to register or keep records.

Texas has a statewide hotel occupancy tax through the Comptroller, and local entities may impose additional HOT. Rules and rates vary by jurisdiction. Failure to collect, remit, or keep required records can lead to back taxes, penalties, and interest, so plan for potential audit review.

Location rules: City, ETJ, or County

Where your STR sits determines which local taxes and permits may apply. Start by confirming the property address is inside Fredericksburg city limits, in the ETJ, or in unincorporated Gillespie County. City boundary maps and the Gillespie County Appraisal District parcel lookup are helpful tools.

Inside Fredericksburg city limits

Municipal hotel occupancy taxes apply only to addresses inside the city. If Fredericksburg imposes a city HOT, it would apply to stays within the city limits. Cities also commonly require STR registration or permits that are separate from taxes. Check Fredericksburg’s municipal code or contact the city finance or tax office to confirm current requirements and processes.

In the ETJ

The ETJ is the zone just outside city boundaries. ETJ generally does not trigger city hotel occupancy tax. However, verify current policy with the City of Fredericksburg because definitions and enforcement practices can vary.

In unincorporated Gillespie County

Counties may adopt a hotel occupancy tax if authorized by state law. If Gillespie County has a county HOT, the county’s rules will specify where it applies and how it is administered. Confirm whether any county HOT applies to your address and how to register and remit if required.

Platforms and who really collects

Many STR platforms have agreements to collect and remit some taxes for you. The key is knowing exactly which taxes they handle and what remains your responsibility.

• If a platform collects for you:
  • Confirm which taxes are covered, such as state HOT, city HOT, or county HOT. Get copies of platform remittance statements.
  • Keep your own booking and tax records. Registration or permitting with the city may still be required.
• If the platform does not collect:
  • You must calculate, collect from the guest, and remit state and applicable local HOT to the correct agencies.
  • Set up invoices so taxes are clearly shown, and note filing frequencies for each authority.

Practical rule of thumb: Do not assume your platform handles everything. Review platform statements and contact local offices to confirm coverage.

What to keep: STR tax records

Good records are your best defense in an audit and make filing much easier. Keep the following for each property:

• Booking records: guest name, property address, check-in and check-out dates, number of nights, nightly rate, cleaning or other fees, and total charged.
• Payment records: receipts, invoices, payment processor reports, and bank statements.
• Tax records: itemized taxes shown to the guest, copies of state and local returns filed, remittance receipts, and platform tax statements.
• Contracts and communications: rental agreements, cancellations, refunds, and correspondence that affects taxable amounts.
• Licensing and permits: STR permits or registrations and any communications with city or county offices.
• Exemption documentation: proof of 30-plus-day stays or other valid exemptions.

Retention tip: Keep records for at least four years, which aligns with the common Texas audit window. Keep them longer if you have any unresolved notices or audits.

Step-by-step: Host compliance checklist

Use this checklist if you are operating or preparing to operate an STR in the Fredericksburg area.

1. Determine your jurisdiction

• Confirm if the property is inside Fredericksburg city limits, in the ETJ, or in unincorporated Gillespie County.

2. Identify applicable taxes

• State hotel occupancy tax through the Texas Comptroller.
• City HOT if the property is inside the city limits.
• County HOT if Gillespie County has adopted one and it applies to your area.

3. Register and permit

• Register with the Texas Comptroller if required for state HOT filing.
• If inside city limits, follow Fredericksburg’s STR permit and registration rules.
• If a county HOT applies, register with the county as required.

4. Confirm collection method

• Verify whether your platform collects state or local taxes for your property. Download their remittance statements.
• If you will collect, add taxes to invoices and set up remittance processes for each authority.

5. Set up bookkeeping

• Track bookings, taxable base, taxes charged, refunds, and platform remittances.
• Reconcile to bank deposits monthly.

6. File and remit on time

• Learn filing frequencies for each taxing authority and submit payments on schedule.

7. Maintain records

• Preserve at least four years of complete records and all correspondence.

8. Monitor changes

• Periodically review city and county pages for updates and confirm platform tax coverage at least annually.

Buying an STR? Due diligence checklist

If you are purchasing an STR in Fredericksburg or Gillespie County, ask for a clear compliance history before closing.

1. Request documentation for the last 3 to 5 years

• Filed HOT returns, remittance receipts, and platform statements.
• STR permits, business licenses, and any code enforcement correspondence.
• Occupancy logs, gross rental receipts, and typical nightly rates.

2. Confirm taxes and liabilities

• Get written confirmation of taxes collected and remitted.
• Ask for notices, audits, or disputes, including any outstanding balances.

3. Check permit transferability

• Learn whether the city STR permit is transferable or if you must apply anew.

4. Review local ordinances

• Confirm allowed use, occupancy limits, parking, and noise rules that can affect revenue.

5. Plan the transition

• Align filings, platform settings, and tax collection processes, especially if the seller relied on platform remittance.

6. Consider professional review

• For complex histories, unpaid tax risks, or audits, consult a qualified local CPA or tax attorney before closing.

Avoid common pitfalls

• Relying only on your platform. Platform collection can change by jurisdiction and over time. Always verify coverage in writing.
• Missing city or county registration. Even if taxes are collected by a marketplace, permits and registrations may still be required.
• Treating cleaning fees as automatically non-taxable. Treatment can vary. When unsure, treat them as taxable and keep documentation.
• Assuming a 30-plus-day booking is exempt without proof. Keep the signed agreement and verify continuous occupancy.
• Weak reconciliation. Compare nightly logs, platform statements, and bank deposits monthly to catch issues early.

Where to confirm answers

• Texas Comptroller of Public Accounts for state HOT and filing guidance.
• City of Fredericksburg for STR permits, local HOT rules, and boundary maps.
• Gillespie County tax office or commissioners court for any county HOT ordinance and its scope.
• Gillespie County Appraisal District to confirm jurisdiction for a specific parcel.
• Your STR platform’s host dashboard for tax collection statements and policy details.
• A qualified local CPA or tax attorney for audit, liability, or complex compliance questions.

If you want a clear, local plan for buying or operating an STR in the Fredericksburg area, let’s talk. Schedule a Free Consultation with Unknown Company to align your property search or hosting plan with current HOT rules and local permitting, and to keep your investment compliant and stress-free.

FAQs

Who must collect hotel occupancy tax for a Fredericksburg STR?

• The operator who receives payment for the stay is responsible. Platforms may collect some taxes, but you should confirm coverage and keep your own records.

Does city HOT apply if my STR is outside Fredericksburg city limits?

• City HOT applies only inside municipal boundaries. Properties in the ETJ are generally not subject to city HOT, but verify with the city to be sure.

Are stays of 30 days or more exempt from HOT in Texas?

• Stays of 30 consecutive days or more are commonly treated as non-taxable leases. Keep signed agreements and proof of continuous occupancy.

Do I need to register if my platform collects taxes?

• Possibly. Platforms may handle remittance, but you may still need a city STR permit or other registrations. Confirm with the city, county, and the Comptroller.

Are cleaning fees taxable for Fredericksburg STRs?

• Tax treatment of cleaning fees can vary. When unsure, treat them as taxable and keep clear documentation of how fees are charged.