Hotel tax may only be used for directly promoting tourism and the convention and hotel industry, according to the Tax Code. To be more specific, hotel tax revenue may be spent on advertising programs to attract tourists, funding historical restoration and preservation projects, and maintaining multiuse facilities or coliseums.
Before spending any hotel tax revenue, however, local officials are encouraged to seek legal counsel, as stated by Texas Ahead. There are certain requirements and provisions to be met prior to accessing and spending the funds.
Hotel tax rates usually depend on the location of the establishment, and not all locations are subject to tax, as reported by the Washington State Department of Revenue. Generally, cities and counties can impose hotel taxes up to 7 percent.