Hotel Occupancy Tax

Hotel Occupancy Taxes

Every person owning, operating, managing, or controlling any hotel or collecting payment for occupancy in any hotel shall collect the Hotel Occupancy Tax from their guests for the City of McKinney.

A hotel is any building or buildings in which the public may obtain sleeping accommodations for a cost of $2 or more each day for a consecutive duration of 30 days or less. This includes, without limitation, hotels, motels, tourist homes, vacation rentals by owner, houses or courts, lodging houses, inns, hostels, rooming houses, bed and breakfasts, short-term vacation rentals or other buildings where rooms are furnished for consideration. It does not include hospitals, sanitariums or nursing homes.

Consideration means the cost of the room in a hotel only if the room is ordinarily used for sleeping, and not including the cost of any food served or personal services rendered to the occupant of such room not related to the cleaning and readying of such room for occupancy.

Tax Rates

The City of McKinney’s Hotel Occupancy Tax rate is 7%. The city’s tax is in addition to the 6% rate imposed by the State of Texas, which must be remitted separately to the State. For information on the State Hotel Occupancy Tax, please visit Texas Hotel Occupancy Receipts Data or call 1-800-252-1385.

Reporting Requirements

Every person required to collect the Hotel Occupancy Tax must file a Report of Hotel Occupancy Tax with the City of McKinney Financial Services Department showing the consideration paid for all room occupancies in the preceding month, the amount of permanent (30-day) and other exemptions granted, and the amount of the tax collected on such occupancies. A payment in the amount of the tax collected must accompany this report. Reports and payments are due on the 20th day of the month following each monthly reporting period (for example, month ending March 31 is due April 20). A report is required even if no taxes are collected during the quarter.

If the due date falls on a weekend or holiday, the next business day is considered the due date. The valid U.S. Postal Service postmark date will be considered the payment date. In addition, because postmark dates may be controlled internally using mailing machines, the city's Financial Services Department must receive your report within five business days from the postmark date, or the return will be considered delinquent.

A penalty of 5% of the tax due shall be imposed on a hotel which fails to pay a tax imposed by this article when due. And if the hotel fails to pay the tax within 30 days after the day on which it is due, an additional 5% shall be imposed. However, such penalty shall never be less than $1. Delinquent taxes shall draw interest at the rate of 10% per annum beginning 60 days from the due date.