Title
Consider/Discuss/Act on an Ordinance Amending Chapter 98, "Taxation," Article IV, "Hotel Occupancy Tax," of the Code or Ordinances of the City of McKinney, Texas, by Requiring Short-Term Rental Platforms to Collect and Remit the Applicable Hotel Occupancy Taxes to the City.
Summary
COUNCIL GOAL: Financially Sound Government
MEETING DATE: September 2, 2025
DEPARTMENT: Financial Services
CONTACT: Mark Holloway, Chief Financial Officer
Trudy Mathis, Finance Director
RECOMMENDED CITY COUNCIL ACTION:
* Approve the proposed ordinance.
ITEM SUMMARY:
* The proposed ordinance amends Chapter 98, "Taxation," Article IV, "Hotel Occupancy Tax," to require that short-term rental platforms (such as Airbnb, Vrbo, and similar services) collect and remit hotel occupancy tax directly to the City on behalf of the short-term rental operator.
* If a short-term rental platform fails to timely remit the applicable hotel occupancy tax, the short-term rental operator remains responsible for said payment.
BACKGROUND INFORMATION:
* The Texas Tax Code Chapter 351 authorizes municipalities to impose a hotel occupancy tax. Revenue from this tax may only be used to promote tourism, the convention industry, the arts, and historic preservation as defined by statute.
* The City imposes a seven percent (7%) hotel occupancy tax on hotels, motels, and short-term rentals within the City's corporate limits. Currently, individual hotel and short-term rental operators are responsible for collecting and remitting the tax to the City.
* Short-term rental activity in McKinney has grown substantially, mirroring statewide and national trends.
* By requiring short-term rental platforms to directly remit the applicable hotel occupancy tax to the City, the proposed ordinance amendment will improve compliance and reduce administrative burdens for both City staff and short-term rental operators.
FINANCIAL SUMMARY:
* Adoption of the ordinance is expected to increase compliance and yi...
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