Short-term rentals in Killeen, explained properly.

Sec. 31-953(b) says a permit issued under the article may not be transferred and does not convey with the property upon sale, and that each new owner of a permitted or previously permitted dwelling unit must apply for a short term rental permit.

Sec. 31-953(c) makes it unlawful for an owner or operator to rent, lease, advertise or offer a short term rental for a period of less than twenty-four hours. The zoning chapter's definition of a short term rental covers rentals of not less than one night and not more than twenty-nine consecutive nights.

Before a permit is issued, the operator must allow, with reasonable notice, an on-site City inspection for minimum health and safety requirements and compliance with the article and other City codes. The inspection includes, but is not limited to, carbon monoxide detectors, smoke detectors, fire extinguishers per floor, a posted emergency evacuation plan and no parking on unimproved surfaces (Sec. 31-955(a)(1)). If the premises are found in violation, the City gives written notice and sets a re-inspection date so the violation is corrected before occupancy. If only part of the premises is rented, that part plus shared amenities and points of access may be inspected. A property that fails the initial inspection pays a nonrefundable re-inspection fee set by the City's fee schedule (Sec. 31-955(c)); the fee amount hasn't been reviewed.

Each owner or operator must maintain a minimum of $500,000 in liability insurance, including personal injury liability insurance, on the short term rental for the full duration of the permit term and provide proof of insurance to the City (Sec. 31-955(d)).

An operator may file a renewal application beginning 30 days before the current registration expires, with a completed renewal application and the renewal fee (Secs. 31-957(a), (b)). The City may deny a renewal if there is reasonable cause to believe the applicant has violated a City, state or federal law on the property or there are grounds for revocation. A renewal application filed after the most recent registration has expired is treated as an application for a new registration (Sec. 31-957(d)). Failing to complete the renewal process is a ground for revocation (Sec. 31-956(b)(6)).

The local responsible party must be reachable in person or by phone at all times while occupants are on the premises, must be able to be present at the premises within one hour of a call from the City, and must be authorized to make decisions regarding the premises and its occupants (Sec. 31-958). The application gives the party's name, address, email and 24-hour phone number, and the party must be responsible and authorized to respond to complaints within one hour or less (Sec. 31-957(c)(2)).

The notice must tell guests about all applicable City short term rental regulations, including the owner or operator's 24-hour contact, the local responsible party's 24-hour contact if the owner or operator is not within the city limits when guests are renting, neighborhood information such as parking restrictions, noise and amplified sound restrictions and trash collection schedules, emergency and non-emergency police, fire and medical numbers with instructions for severe weather and disaster alerts, and a notice that guests are responsible for complying with the law and may be fined by the City (Sec. 31-955(e)).

Within ten days of approving the application, the City sends written notice to all property owners within 200 feet of the short term rental that the property is an approved short term rental. The notice includes the owner or operator's 24-hour contact information, information about short term rental regulations, and contact numbers for the police department and code enforcement division (Sec. 31-955(f)).

Sec. 31-953(d) requires any advertising of a short term rental by the owner or any person or service to conform to the article's provisions and the property's approval.

Suspected criminal activity involving a short term rental, including complaints about noise and disorderly conduct by guests, is reported to the police department. Complaints about the operation of a short term rental, including trash, parking, and high weeds and grass, are reported to the City code enforcement division (Sec. 31-960).

Sec. 31-959 requires the tax imposed in Sec. 27-72 to be collected and remitted to the tax assessor-collector by the due date, with the report required by Sec. 27-74. Failing to collect the tax, file the report, remit the tax or filing a false report is a misdemeanor punished as provided in Sec. 27-76. Being current on hotel occupancy taxes owed to the City under the Texas Tax Code is also a condition of the initial and continued validity of the permit (Sec. 31-955(b)), and failure to pay is a ground for revocation (Sec. 31-956(b)(5)). We haven't reviewed Chapter 27, so the City tax rate is not stated here and no combined state-and-City total is given. The Texas state hotel tax is covered in the Texas rules.

A permit application is denied if any statement is incomplete, inaccurate, misleading or false, if the operator or its principals have not paid all fees due, or if the applicant had a short term rental permit revoked within the preceding year (Sec. 31-956(a)). The City may revoke a permit for failure to comply with the permit, City ordinances or other law; a false or misleading statement of material fact; a serious threat to public health, safety or welfare; three or more confirmed cases of nuisances or citations; failure to pay hotel occupancy tax; or failure to complete renewal (Sec. 31-956(b)). The City gives written notice of a denial or revocation within ten days, stating the reasons and the right to appeal (Sec. 31-956(c)). If a registration is revoked and the appeal fails, no new registration is issued for a short term rental on the premises for one year from the revocation (Sec. 31-956(d)). The applicant may appeal in writing to the city manager's office no later than five business days after the denial or revocation; the city manager or designee holds a hearing within ten business days and the decision is final (Sec. 31-961).

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.