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A WORD FROM THE MAYOR
Hotels and other overnight lodging facilities are required by the state to collect occupancy taxes, this was passed into law by the State Legislature in 1959. Every overnight lodging facility in the state charges these taxes, often referred to as HOT (Hotel Occupancy Tax) funds or taxes. The tax was originally approved at three percent but has since increased to the current rate of six percent in Texas.
These funds go to the state comptroller and are used in the overall operation of the state. Cities are also allowed to collect occupancy taxes in addition to the six percent the state collects. The rate charged over the state rate by each city varies and is determined by each municipality. As an example, Houston charges a total occupancy tax rate of 17 percent and the city of San Antonio has a total occupancy tax rate of 16.75 percent. Pearsall has a total occupancy tax rate of 13 percent. Of the total collected in Pearsall, again six percent goes to the state, sent by each operator and the remaining seven percent goes to the city of Pearsall.
These taxes are paid predominantly by travelers, or workers staying in our town overnight and typically not by the local population. The city accounts for these funds separately and outside of our traditional utilities and tax revenues. They are held separate because they are restricted in how municipalities can use them. In laymen terms, we use them to promote the city with events that will put ‘heads in beds’, in other words, bringing folks from outside our area to spend the night in Pearsall. They are used to help spur tourism, our local commerce and economic development. When the city purchased and upgraded the old Lions Club as our convention center, the bulk of that was done with HOT tax funds.
It is easy to see where citizens can get puzzled over the city sponsoring a festival or multiple day event and wonder why not spend those funds on roads or infrastructure repair, or a myriad of other more important functions? The answer is because, again, the use of these funds are restricted and can only be used for this type of event or in a similar capacity. And while we have pressing infrastructure needs, there is value in promoting Pearsall and having events that bring folks together and into our town, creating unity in our community.
God Bless the City of Pearsall, the County of Frio, the State of Texas, the United States of America and You.
Ben T. Briscoe
Mayor of Pearsall