National Collegiate Athletic Association (NCAA) Conference Realignments

Changes to NCAA conference affiliations are bringing new travelers to Texas who are unfamiliar with Texas hotel tax law. With Texas A&M University joining the Southeastern Conference (SEC) and West Virginia University (WVU) joining the Big 12 Conference, sports and academic teams and their fans from the SEC and WVU are booking hotel stays throughout the state.

As educational organizations, Texas colleges and universities and their employees (coaches) traveling on official business qualify for exemption from the 6 percent state hotel occupancy tax. The exemption does not apply to local hotel occupancy tax. See Texas Tax Code Section 156.102.

Educational organizations, as defined in Rule 3.161(a)(2), include independent school districts, public and nonprofit private elementary and secondary schools and Texas institutions of higher education. Universities, colleges, junior colleges and community colleges from other states or countries are not exempt and must pay all hotel occupancy taxes imposed.

For example, an SEC team traveling to College Station to play Texas A&M may not claim a hotel tax exemption. The same is true for a team from WVU when it travels to a Big 12 school in Texas. On the other hand, teams from Baylor, Texas Christian University, Texas Tech University and the University of Texas may claim a state hotel tax exemption when traveling to a Texas city.

A completed Texas Hotel Occupancy Tax Exemption Certificate (Form 12-302) (PDF, 66KB) should be submitted to the hotel to claim the exemption. A hotel may accept the exemption certificate, in good faith, when presented with a letter of hotel tax exemption from the Comptroller or proof the school has received a letter of hotel tax exemption, such as a copy of the exempt verification from the Comptroller’s Texas Tax-Exempt Entities Search. See Rule 3.161(b)(2).

In addition to reserving hotel rooms, travelers may also use other non-conventional types of lodging, such as renting a person’s home. A hotel is defined in Texas Tax Code Section 156.001 as a building in which members of the public obtain sleeping accommodations for consideration. Therefore, the rental of a home, apartment or condominium unit is also subject to hotel occupancy tax.

For more information, see the Hotel Occupancy Tax section on the Texas Comptroller’s Window on State Government’s website and Hotel Occupancy Tax Exemptions (Pub 96-224).

*Originally published in Tax Policy News – a monthly newsletter about Texas tax policy at http://window.state.tx.us/taxinfo/taxpnw/tpn2012/tpn1208.html