Running a hotel in Texas means clearing a stack of Texas hotel laws and regulations that touch licensing, taxes, safety, accessibility, employee training, and guest rights. The state collects a 6% occupancy tax on rooms priced at $15 or more per night, cities and districts can add their own on top, and the combined total is capped at 17% of the room price.1Texas Comptroller of Public Accounts. Local Hotel Occupancy Tax Overview On top of tax collection, operators owe annual human trafficking training, ADA-compliant rooms, posted rate cards, and a functioning safe if they want the state’s liability cap on lost valuables. The rules below are the ones that matter most for owners and managers.
Licenses and Permits to Open
A new hotel needs a hotel occupancy license from the local municipality, which verifies zoning and building code compliance. Larger cities such as Houston and Dallas require detailed applications with proof of ownership and floor plans. Every hotel must also register with the Texas Comptroller of Public Accounts to collect and remit state and local hotel occupancy taxes.2Texas Comptroller of Public Accounts. Hotel Occupancy Tax
If the property has a restaurant or any food service, add a food establishment permit from the Texas Department of State Health Services. If it sells alcohol, add a license or permit from the Texas Alcoholic Beverage Commission, which involves background checks, public notice, and service-hour restrictions.3Texas Alcoholic Beverage Commission. TABC License and Permit Types
Short-term rental properties that operate like hotels are a separate track. Cities including Austin and San Antonio require STR permits, hotel occupancy tax collection, and compliance with noise and nuisance rules. Operating without a valid permit can lead to fines or revocation.
Hotel Occupancy Tax and the 17% Ceiling
The state hotel occupancy tax is 6% of the room price, collected from any guest paying $15 or more per night.2Texas Comptroller of Public Accounts. Hotel Occupancy Tax It applies broadly, not only to traditional hotels but also to bed-and-breakfasts, condominiums, apartments, and houses rented on a short-term basis.
Cities, counties, and special-purpose districts can layer their own hotel taxes on top of the state rate, but the combined total of all state and local hotel taxes cannot exceed 17% of the room price.1Texas Comptroller of Public Accounts. Local Hotel Occupancy Tax Overview In major metro markets, guests often pay close to that ceiling.
The one exemption every front desk needs to understand: a guest who stays 30 or more consecutive days qualifies as a permanent resident and is exempt from the state hotel occupancy tax. The exemption applies retroactively once the 30-day threshold is met, so track the length of every stay.4Texas Comptroller of Public Accounts. Hotel Occupancy Tax Exemptions
Required Room Rate Postings
Texas requires every hotel owner or keeper to post a card or sign in each guest room listing the daily room rate and the date it was posted. Properties with 20 or more rooms must also give each guest a printed ticket showing the rate being charged. Any rate increase takes effect only 30 days after the updated sign goes up.5State of Texas. Texas Occupations Code 2155.001 – Room Rate Information Miss the posting and the rate you can charge is limited by what the last valid sign said.
Health, Fire, and Boiler CO Rules
Sanitation and Pools
The Texas Department of State Health Services runs a public health sanitation program that inspects hotels, motels, campgrounds, inns, and RV parks. Inspectors look at sanitation in guest rooms and common areas, and any on-site food service must meet the Texas Food Establishment Rules. Linens, pest control, and waste disposal are all fair game.6Texas Department of State Health Services. Hotels, Motels, Travel Accommodations, Bed and Breakfasts – Public Health Sanitation Program
Pools and spas must meet 25 Texas Administrative Code Chapter 265, Subchapter L, which covers water quality, chemical treatment, filtration, safety signage, enclosures, and drowning-prevention features.7Department of State Health Services. 25 TAC Chapter 265 Subchapter L – Public Swimming Pools and Spas
Fire and Carbon Monoxide
Hotels are classified as high-occupancy buildings, and the State Fire Marshal’s Office oversees fire protection compliance.8Texas Department of Insurance. State Fire Marshal Frequently Asked Questions That means smoke detectors, fire alarms, sprinklers, and clearly marked exits, with local fire departments enforcing National Fire Protection Association guidelines.
A rule that catches operators off guard: any boiler room where one or more boilers can produce carbon monoxide must have a CO detector with a manual reset and a display showing current CO levels in parts per million. The detector must be interlocked to shut down the burners when CO rises above 50 ppm. The rule applies to new boiler installations or reinstallations completed on or after September 1, 2020.9Legal Information Institute. Texas Administrative Code 16-65.206 – Boiler Room It targets boiler rooms rather than individual guest rooms, though TDLR recommends CO detectors in all mechanical rooms with CO-producing equipment.10Texas Department of Licensing and Regulation. Retrofitting Boilers in Commercial Buildings, Apartments and Hotels to Detect Carbon Monoxide Can Save Lives
Accessibility and Service Animals
Accessible Rooms by Property Size
The Americans with Disabilities Act sets minimum accessible room counts on a scale. A hotel with 1 to 25 rooms needs one accessible room and no roll-in shower. A property with 26 to 50 rooms needs two accessible rooms, still no roll-in shower required. Roll-in showers first become mandatory at 51 rooms: a hotel with 51 to 75 rooms needs three accessible rooms, one with a roll-in shower. Larger properties scale up from there.11ADA.gov. ADA Checklist for New Lodging Facilities
Accessible rooms need wider doorways, grab bars, lower peepholes, and wheelchair-friendly layouts. Lobbies, restaurants, meeting rooms, and pools must be accessible as well, with lifts or sloped entries at the pool. Texas follows the 2012 Texas Accessibility Standards administered by the Texas Department of Licensing and Regulation, which align with the federal ADA but add state-specific rules, particularly around parking.12Texas Department of Licensing and Regulation. Elimination of Architectural Barriers – 2012 Texas Accessibility Standards Reservation systems must show detailed accessibility information at booking.
Service Animals
Hotels cannot refuse service animals, charge pet fees for them, or demand certification. When it is not obvious that an animal is a service animal, staff may ask only two questions: whether the animal is required because of a disability, and what task it has been trained to perform. Asking about the person’s disability or requesting a demonstration is not allowed.13ADA.gov. Frequently Asked Questions About Service Animals and the ADA No cleaning fee for hair or dander is permitted, but the hotel can charge for actual damage at the same rate it would charge any guest.
Human Trafficking Training
Every commercial lodging establishment in Texas must provide annual human trafficking awareness and prevention training to all direct-hire employees. New hires must complete the training within 90 days of their start date. The training must run at least 20 minutes and cover how trafficking occurs in hospitality, how to recognize at-risk individuals, the difference between labor and sex trafficking, and what to do when trafficking is suspected, including the National Human Trafficking Hotline number and local law enforcement contact information.14Legal Information Institute. Texas Administrative Code 1-54.100 – Human Trafficking Prevention
Training can be online or in person, but online programs need a pacing mechanism that stops employees from clicking through. Employees receive a certificate of completion. It is annual, not one-and-done.14Legal Information Institute. Texas Administrative Code 1-54.100 – Human Trafficking Prevention
Guest Property Liability and the $50 Cap
Texas caps a hotel’s liability for lost or stolen guest valuables at $50, but only when three conditions are met. The hotel must maintain a metal safe or vault in good working order for storing money, jewelry, precious stones, documents, and similar items. It must keep proper locks on sleeping room doors and fastenings on transoms and windows. And it must post a printed copy of the liability statute on the door of each guest room.15State of Texas. Texas Occupations Code 2155.052 – Liability for Valuables
The cap disappears in two situations. If the loss resulted from the hotel’s own negligence or wrongdoing, the hotel faces unlimited liability for the full value of what was lost. The cap also does not apply if the guest offered to deposit valuables in the hotel’s safe and the hotel refused or failed to issue a receipt.15State of Texas. Texas Occupations Code 2155.052 – Liability for Valuables Posting the notice and running a working safe are not optional if the cap is meant to protect the property.
Removing a Guest
An innkeeper-guest relationship is not a landlord-tenant relationship under Texas law. Hotels can use self-help measures to remove a guest who has overstayed or violated hotel policies, including changing the locks on the room. The formal court eviction process that applies to tenants does not apply here. If a guest refuses to leave after the hotel has revoked their right to stay, police can remove them for criminal trespass under Texas Penal Code Section 30.05.16State of Texas. Texas Penal Code 30.05 – Criminal Trespass
One boundary worth flagging on posted firearm policies: Texas law provides a specific defense to criminal trespass for hotel guests who carry or store firearms in their room, transport them directly to or from their vehicle on hotel property, or carry them en route to or from the hotel. Even if the hotel posts signs prohibiting firearms, a guest exercising these rights has a statutory defense against a trespass prosecution.16State of Texas. Texas Penal Code 30.05 – Criminal Trespass
For unpaid bills, Texas gives hotels a statutory lien on a guest’s stored property. If a guest leaves without paying, the hotel can hold luggage and other belongings. When charges go unpaid for more than 10 days after a demand for payment, the hotel can sell the property at a public sale after giving 20 days’ notice.
Wage, Tip, and Anti-Discrimination Rules for Employees
Texas follows the federal minimum wage of $7.25 per hour, and no Texas city can set a higher local rate. The Texas Workforce Commission enforces wage and hour standards under the federal Fair Labor Standards Act.17Texas Workforce Commission. Fair Labor Standards Act – What It Does and Does Not Do Non-exempt employees who work more than 40 hours in a week get overtime at one and a half times their regular rate.
Hotels with tipped workers such as bellhops, valets, and restaurant staff can pay a direct cash wage as low as $2.13 per hour, with tips making up the difference to reach $7.25. The maximum tip credit is $5.12 per hour. To use the tip credit, the employer must inform each tipped employee in advance of the cash wage amount, the tip credit being claimed, and the employee’s right to keep all tips except those shared in a valid tip pool. Skip the notice and the entire tip credit can be invalidated, exposing the property to back-pay liability. Tip pools can include only employees who regularly receive tips; supervisors and managers can never share in pooled tips, and the hotel itself can never retain any portion of tips.18U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act
Title VII of the Civil Rights Act prohibits employment discrimination based on race, color, religion, sex, and national origin.19U.S. Equal Employment Opportunity Commission. Title VII of the Civil Rights Act of 1964 The Texas Labor Code mirrors and in places extends these protections. Both the EEOC and the Texas Workforce Commission investigate claims. Hotels also owe an OSHA-compliant workplace, with attention to hazardous chemical training, workplace violence, and ergonomic risks in housekeeping.
Franchise Tax and Other Business Filings
Hotels structured as corporations, LLCs, or partnerships file an annual franchise tax report with the Comptroller. For the 2026 report year, entities with total revenue at or below $2,650,000 owe no franchise tax. Above that threshold, the rate is 0.375% for retail and wholesale operations and 0.75% for other entities.20Texas Comptroller of Public Accounts. Franchise Tax
Restaurants, spas, and gift shops on-site trigger state sales tax collection on applicable goods and services. Standard payroll tax withholding and reporting apply as well. Missed filings can bring audits, penalties, and interest from the Comptroller’s office, which is the office most likely to notice a lapse first.
On the guest-data side, the Texas Identity Theft Enforcement and Protection Act requires businesses to maintain reasonable safeguards for sensitive personal information and to render it unreadable when disposing of records. Sensitive personal information includes a person’s name combined with a driver’s license number, Social Security number, or financial account information.21Office of the Attorney General of Texas. Identity Theft Enforcement and Protection Act Between reservation systems, ID scans at check-in, and credit card storage, hotels sit squarely inside the Act’s scope.