Texas Short-Term Rental Tax Overview
Texas imposes no state income tax on net rental income, combined with Hotel Occupancy Tax at 13-17%+ on gross rental receipts. 6% state hotel tax + local hotel taxes (7-11%). The total tax burden for Airbnb hosts in Texas varies by location, ranging from approximately 17% in Austin to 13% in South Padre Island. Understanding the layered structure of federal, state, and local taxes is essential for compliance and accurate pricing.
This guide covers the 2026 tax year. Tax rates and rules change frequently — always verify current rates with the Texas Comptroller of Public Accounts and consult a qualified tax professional for advice specific to your situation. Federal tax obligations (Schedule E, Form 1099-K, the 14-day rule) apply in addition to all state and local taxes described below. See IRS Publication 527 for federal rental income rules.
Income Tax on Rental Income
Rate: 0%
Texas has NO state income tax
- No state income tax return required for rental income
- Federal Schedule E (or Schedule C if substantial services provided) is required regardless of state tax
- The 14-day rule: if you rent your primary residence 14 days or fewer per year, federal rental income is tax-free (IRS Publication 527)
- Federal self-employment tax may apply if you provide substantial services to guests
Hotel Occupancy Tax
Rate: 13-17%+
6% state hotel tax + local hotel taxes (7-11%)
What Airbnb Collects Automatically
- State hotel occupancy tax (6%)
What Hosts Must Collect and Remit
- City hotel occupancy taxes
- County hotel occupancy taxes
- Special district venue taxes (Austin)
Local Tax Rates by City in Texas
Combined estimated occupancy/lodging tax rates including state + local components (income tax not included):
| City / Area | Local Tax Rate | Combined Rate | Registration Required? |
|---|---|---|---|
| Austin | 9% city + 2% venue | 17% | Yes - STR license required |
| Houston | 7% city | 13% | Yes |
| San Antonio | 9% city | 15% | Yes - STR registration |
| Dallas | 7% city | 13% | Yes |
| Fredericksburg | 7% city | 13% | Yes |
| South Padre Island | 7% city | 13% | Yes |
Deductions for Texas Airbnb Hosts
Because Texas has no state income tax, state-level deductions for rental expenses are irrelevant. All standard federal deductions apply to your federal return: depreciation over 27.5 years (IRS Publication 946), mortgage interest, property taxes (proportional to rental use), insurance, cleaning and maintenance costs, guest supplies, utilities, Airbnb platform fees (typically 3%), professional photography, and property management fees. The absence of state income tax means Texas hosts keep 100% of net rental income after federal taxes, making it one of the most tax-friendly states for Airbnb operators. See IRS Publication 527 for the complete list of deductible rental expenses.
Common Deductible Expenses
- Depreciation — Building cost over 27.5 years (IRS Publication 946); often the largest single deduction
- Mortgage interest — Deductible in proportion to rental use percentage
- Property taxes — Proportional to rental use days vs. personal use days
- Insurance — STR-specific or landlord insurance premiums
- Cleaning and maintenance — All turnover cleaning fees, repairs, and upkeep
- Supplies — Linens, toiletries, coffee, kitchen supplies for guests
- Platform fees — Airbnb host service fees (typically 3%) are fully deductible
- Utilities — Electricity, internet, water, gas proportional to rental use
- Professional fees — CPA, tax preparer, attorney fees related to the rental business
Filing Requirements and Deadlines
Registration
Required: Tax Registration / Business License
Cost: Varies by jurisdiction
Register at: Texas Comptroller of Public Accounts
Filing Schedule
Monthly or quarterly for lodging/sales tax; annually for income tax
Key Resources
Common Texas Tax Mistakes for Airbnb Hosts
Mistake #1
Assuming no taxes apply because Texas has no income tax — the Hotel Occupancy Tax still applies to gross rental receipts and must be collected from guests and remitted to the appropriate authority.
Mistake #2
Not registering with local tax authorities — even in states without income tax, hosts must register for sales/lodging tax collection and may need local business licenses or STR permits.
Mistake #3
Failing to report rental income on the federal return — Texas's lack of state income tax does not eliminate the federal obligation. All rental income must be reported on Schedule E (or Schedule C if providing substantial services).
Texas Short-Term Rental Regulations Beyond Tax
Texas does not have comprehensive statewide short-term rental legislation. Regulations are primarily set at the city and county level, with tourist-heavy areas generally having more specific STR ordinances. Hosts should check with their local municipality for zoning compliance, business licensing requirements, safety inspection mandates, and any occupancy or night-cap limits. Some Texas cities have begun requiring STR-specific permits and registration in response to housing affordability concerns. Always verify current local requirements before listing.
Calculate Your Texas Airbnb Tax
Enter your income, expenses, and select Texas to get an instant federal + state estimate.
Frequently Asked Questions
Does Texas tax Airbnb income?
Texas has no state income tax, making it tax-friendly for rental income. Additionally, Texas imposes Hotel Occupancy Tax at a combined rate of approximately 13-17%+. Local taxes may add more depending on your city or county. All net rental income must also be reported on your federal tax return (Schedule E). See the Texas Comptroller of Public Accounts and IRS Publication 527 for details.
Does Airbnb collect Texas taxes?
Airbnb collects State hotel occupancy tax (6%) in Texas. However, city hotel occupancy taxes and county hotel occupancy taxes may still be the host's responsibility. Always verify your specific jurisdiction on Airbnb's "Occupancy Tax Collection" page and with the Texas Comptroller of Public Accounts.
Do I need a permit to Airbnb in Texas?
Requirements vary by locality. At minimum, you typically need to register with the Texas Comptroller of Public Accounts for tax collection purposes. Many cities and counties require additional business licenses, STR permits, or zoning approvals. Tourist-heavy areas tend to have stricter requirements. Check with your local municipality before listing.
What can Texas Airbnb hosts deduct?
Since Texas has no state income tax, deductions apply only to your federal return. Standard deductible expenses include: depreciation (27.5 years MACRS), mortgage interest (proportional to rental use), property taxes, insurance, cleaning, supplies, utilities, Airbnb fees, and professional services. See IRS Publication 527 for the complete list.
When are Texas tax returns due?
There is no state income tax return. Hotel Occupancy Tax returns are usually due monthly or quarterly depending on your tax liability. File through the Texas Comptroller of Public Accounts online portal at https://comptroller.texas.gov/. Federal income tax returns (including Schedule E for rental income) are due April 15 annually.