Short-term rentals in Frisco, explained properly.

Section 18-463(e), in its form after Ordinance 2024-09-44 (adopted September 17, 2024), says a permit to operate a short-term rental is not transferable to another owner, operator or location. A new owner would need to apply for their own permit.

Unless the director revokes it earlier, a permit expires one year after the date of issuance. The holder must apply for renewal before expiration on the director's form, update any changed information and sign a statement that there is no change or that updates are accurate. Complete renewal applications received after expiration are treated as applications for a new permit (Sec. 18-463(c)). On a complete renewal application the director may deny renewal if the permit was issued in error or on incorrect information, if the holder has pleaded no contest to or been convicted of a violation of a City ordinance or state or federal law related to operating a short-term rental on the premises (or allowed such a violation by another person), or if there are grounds for suspension or revocation (Sec. 18-463(d)). Application and renewal fees are set in the City's comprehensive fee ordinance, which hasn't been reviewed yet.

Sections 18-463(a) and (c) require a nonrefundable application fee and a nonrefundable renewal fee in the amounts set in the City's comprehensive fee ordinance. We haven't reviewed that ordinance, so no amount or effective date is stated here; check the City's current fee schedule. An application is complete only when all required documents are submitted and all permit fees are paid (Sec. 18-463(b)).

The application must list all owners, operators and agents with names, addresses, emails and phone numbers; name a 24-hour contact person; acknowledge that the permit does not override property-specific restrictions (lease, covenant, deed restriction); depict the floor plan with sleeping areas, proposed maximum number of guests, evacuation routes and the location of fire extinguishers and smoke detectors; include the guest safety information; and include a sworn statement of compliance, including annual independent inspections of required fire extinguishers (Sec. 18-463(a)). The director may require other information.

The owner may run the rental from elsewhere through a designated agent. The application lists all owners, operators and agents, and the contact person must be "the owner, operator or designated agent" who is responsible and authorized to respond to complaints within one hour or less (Secs. 18-463(a)(1)-(2), 18-465(2)). The permit holder must keep the contact's name, address and 24-hour phone number up to date with the City. Zoning and any deed or HOA rules haven't been reviewed.

The owner must provide timely updates of any change to the contact's name, address and 24-hour phone number. If an officer cites the rental, the contact may be called, must try to reach the occupants within one hour of any City contact, and after a second complaint and citation the owner and responsible party must take steps to prevent more complaints. Failing to update the City on the contact is a violation (Sec. 18-465(2)).

The City may conduct an initial inspection when it issues a new permit or renewal, and may inspect when a violation is reported or suspected. The owner is responsible for annual independent inspections of fire extinguishers under the City's fire code (Sec. 18-464). The rental must have working smoke detectors under adopted codes and at least one working type A fire extinguisher, and must otherwise comply with building and fire codes (Sec. 18-466(b)).

Unless expressly authorized by the City, any premises that has received a city housing incentive is ineligible for a short-term rental permit during the time the owner (or third-party beneficiary) is eligible to receive that incentive (Sec. 18-467).

The applicant must acknowledge that a permit does not supersede property-specific restrictions against short-term rentals under law, agreement, lease, covenant or deed restriction (Sec. 18-463(a)(3)). Check your deed, HOA documents and lease before applying.

Section 18-465(3)(I) makes it unlawful to permit the use of a short-term rental for rental periods of less than 24 hours. The article applies to rentals of less than 30 consecutive days (Sec. 18-461).

Section 18-465(3)(F) makes it unlawful to rent a short-term rental to a guest who is under the age of twenty-one (21).

The applicant depicts a floor plan identifying sleeping areas and the proposed maximum number of guests (Sec. 18-463(a)(4)). Confirm the maximum for a specific property with the City.

Section 18-465(1). The zoning ordinance's parking requirements haven't been reviewed yet.

Section 18-465(3)(J) makes it unlawful to permit their use as short-term rentals. The same subsection (3)(I) also prohibits using a short-term rental to promote illegal activities, temporary or transition housing for registered sex offenders, structured sober or recovery living homes, selling illegal drugs or alcohol or other activity needing a Texas Alcoholic Beverage Code permit, or operating a sexually oriented business.

Section 18-465(3)(D)-(E) makes it unlawful to operate with an active alarm system that is unregistered, or registered but not listed on the permit as a short-term rental.

It is unlawful to post or allow external signage on or off the premises that indicates the property is a short-term rental, and to omit the City permit number from all advertisements, including online, in the description or body (Sec. 18-465(3)(G)-(H)).

The notice must include the contact's name and 24-hour phone number; parking restrictions, trash schedules and off-street parking locations; quiet hours and noise restrictions under Chapter 54, Article IV of the Code (which hasn't been reviewed here); emergency and non-emergency numbers and disaster-alert instructions; and a floor plan showing evacuation routes (Sec. 18-466(a)).

Section 18-465(3)(C) makes it unlawful to operate a short-term rental without paying required hotel occupancy taxes, which the article ties to Section 86-72 of the City Code and Chapter 351 of the Texas Tax Code (Sec. 18-461). We haven't reviewed Chapter 86 (Taxation), so the City rate is not stated and City and State taxes are not totaled. The State rate and filing rules are in the Texas section.

The director may revoke for serious or repeated violations, violations of other law on public health, safety or welfare, or interference with law enforcement. Revocation takes effect on the tenth calendar day after notice unless the holder requests a hearing in writing within that period (Sec. 18-469(a)). An administrative decision, including denial, renewal denial, revocation or suspension, is final unless the holder appeals in writing to the city manager within 10 calendar days; the city manager or designee rules within 30 calendar days and the decision is final (Sec. 18-469(b)).

Section 18-462 makes owning or operating a short-term rental without a valid permit an offense. We haven't reviewed the Code's general penalty provision or any fine schedule, so no fine amounts are stated here.

Texas Tax Code § 156.052 sets the state hotel occupancy tax at 6% of the price paid for a room, and § 156.051(a) applies it to rooms or spaces costing $15 or more a day. Section 156.001(b) makes a short-term rental (renting all or part of a residential property to someone who is not a permanent resident) a "hotel" for state and local hotel occupancy taxes. Stays of at least 30 consecutive days, with no interruption of payment, are not taxed (§ 156.101). Local hotel taxes are added on top and vary by city and county.

Whoever owns, operates, manages or controls a hotel must collect the state tax (Tax Code § 156.053), and the Comptroller's office treats short-term rentals the same way. The Comptroller does not issue printed hotel tax permits; a business that reports the tax sends Form AP-102 (Hotel Occupancy Tax Questionnaire) to the Comptroller. A short-term rental platform that has agreed with the owner to collect and remit state hotel tax files Form AP-102 itself, and an owner who rents only through such a platform does not collect and remit the state tax. An owner who takes bookings directly or through a platform that does not collect must collect and remit the state tax. Local hotel taxes are handled separately by the city and county.

Each calendar month is a reporting period, with the return and tax due to the Comptroller by the 20th of the following month (Tax Code § 156.151(b)). A taxpayer who owes less than $500 for a month or $1,500 for a quarter files quarterly, due the 20th day after the quarter ends (§ 156.151(c)). The Comptroller allows a 1% discount when the return is filed and paid on time.

Cities, some counties and special purpose districts may levy their own hotel taxes, generally up to 7%, and sports or community venue projects may add up to 2% (Dallas County up to 3%). Local hotel taxes apply to sleeping rooms costing $2 or more a day. The Comptroller collects only the 6% state tax; cities and counties collect their own local hotel taxes, so hosts should check with the city and county where the rental is.