Short-term rentals in South Padre Island, explained properly.

Section 11-221 requires the owner or operator who offers a short-term rental of a dwelling unit for rent, or advertises it in any manner, to get a short-term rental license from the City's Finance Department (4601 Padre Boulevard; 956-761-8382). The license form asks for the owner or operator's contact details, a local contact person, the address, the number of bedrooms and the overnight and daytime occupancy limit, and the Cameron County Appraisal District property ID. Changes to that information must be reported within 30 days. The annual licensing fee is $125 per rental unit (from May 1, 2023). The license is valid from the date the completed form is filed and the fee is paid, and it is transferrable if ownership changes. Each property gets a license number, which must appear in any advertisement. A short-term rental is defined as a residential dwelling (house, apartment, condo or similar) where the public can get sleeping accommodations for pay for fewer than 30 consecutive days, whether or not the home was built or zoned as a residence. The City's hotel tax page says the license is applied for, renewed and updated through the City's online portal. The Article also says it does not override private covenants, conditions or restrictions, so HOA and deed rules still apply.

We read the City's zoning chapter (Chapter 20) for any wording on short-term rentals and found none: a search of the whole Code finds the term only in Chapter 11, Article VII. The licensing Article says it applies to a short-term rental of a dwelling regardless of how the home was zoned, but it does not say that renting is allowed in any particular zoning district. The zoning chapter defines a "dwelling" as a building designed exclusively for residential occupancy, "but not hotels", and defines "hotels and motels" as buildings with more than twelve sleeping rooms and no cooking provisions in individual rooms. Section 20-4.1 says that where a land use is not specifically noted in the lists of allowable uses, the Planning and Zoning Commission decides which district is most appropriate, and a person who disagrees can appeal to City Council within ten days. We make no claim about which districts allow short-term rental. We did not read the district-by-district use lists or the zoning map. Ask the City's Planning Department which district your address is in and whether short-term rental is allowed there. The City's licensing and hotel tax pages also say nothing about zoning.

The license form must name a local contact person with a twenty-four hour telephone number. That person must be available 24 hours a day, 7 days a week, and respond in person within one hour, with the signed rental contract in hand, to complaints from a City official about the condition, operation or conduct of occupants, and take remedial action. The form also asks for the number of bedrooms and the overnight and daytime occupancy limit of the unit; the Article does not set a numeric occupancy formula, and we did not find one in the sections we read. The yard sign (see Sign and advertising rules) must also show the owner or operator's name and phone number and the local contact's 24-hour number.

Every advertisement must show the license number. Unless a written resolution approved by a majority vote of a lawfully organized property owners association prohibits it, the property must also have a yard sign or other sign visible to any visitor, not less than 5 feet from the right-of-way, at least 18 by 24 inches with print no smaller than 64-point type, showing the license number, the name and telephone number of the owner or operator, and the name and 24-hour telephone number of the local contact. Advertising a short-term rental for a use or purpose the City Code does not authorize is prohibited.

Section 11-222 requires the owner or operator to give renters a brochure or other publication (electronic notices count), or conspicuously post an information sheet inside the property, covering basic standards of conduct including the noise ordinance, parking and no littering. Each property must have a functioning smoke detector in each room or space advertised for sleeping. Owners and operators are responsible for telling guests about relevant City codes and the guests' liability for violations. Commercial activities, and events or large gatherings not ordinarily conducive to a residential neighborhood, are prohibited. Parking must follow City parking rules and not create excessive traffic or unreasonable congestion, and parking on any part of the roadway designated for traffic is prohibited. The owner or operator must also follow Chapter 12 (noise) and the hotel occupancy tax chapter.

A violation of the Article is punishable by a fine of up to $500 for each offense, and each day the violation continues is a separate offense. For offenses under city codes governing fire safety, zoning, public health and sanitation, the maximum is $2,000 a day. The City may issue a notice of violation as a warning instead of a citation. Citations can go to the occupant, owner or operator, delivered in person or by certified mail within 20 days of the violation (the same section also says 10 days for a citation or written warning; we report both). These penalties are in addition to other remedies, including license revocation.

After notice and a hearing where the license holder can present evidence, City Council may revoke a short-term rental license if the property site, including the owner, operator or occupants, receives at least three citations within a 12-month period that result in convictions for violations of Chapter 11 or any other City ordinance (examples listed include parking, litter, noise, disorderly conduct and failure to pay hotel occupancy tax). A deferred disposition, deferred adjudication or pre-trial diversion counts as a conviction. Council may also revoke a license issued in error or on incorrect information that is not corrected within 30 days of notice. The City then notifies the owner and operator in writing by certified mail with the reason. Council's decision is final, and a revoked owner or operator cannot apply for a new license for one year. These revocation and hearing rules were added by Ordinance 26-01 (February 18, 2026).

The City Code taxes the cost of occupancy of any room or space in a "hotel" at 8.5%, and adds a 2% venue tax; the City says the City total is 10.5%. The Code defines "hotel" to include houses, lodging houses and other buildings where rooms are furnished for pay, and "occupancy" as a stay of less than 30 days, and the City's tax page says the tax applies to short-term rental stays of less than 30 consecutive days, including house, condo, apartment and bedroom stays. Whoever owns, operates, manages or controls the hotel must collect the tax and file a monthly report on or before the 15th of the following month, and pay by the same date. Timely payers may keep 1% of the tax collected. The City says that since October 1 the tax must be reported and paid through Deckard Technologies, and that a monthly filing is needed even for months with no rentals (Section 11-223). The tax also applies to properties in the City's extraterritorial jurisdiction. Contact the City's Finance staff at 956-761-8382 or [email protected]. Note: Section 11-223 refers to a "section 17-20", which is not in the Code we read; the monthly reporting rule is Section 17-10.

The City's hotel tax page says there is also a Cameron County venue tax of 0.5%, remitted separately through the County (the City names Cameron County's Economic Development Office, 956-544-0828, as the contact). We did not read the County's own page or order, so this rate rests on the City's page. The state tax (6% of the room price under Tax Code Chapter 156, which treats a short-term rental as a hotel) is also remitted separately to the Texas Comptroller; see "State law that also applies".

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.