An agreement approved Aug. 1 will provide the Chamber of Commerce with a portion of the city’s hotel occupancy tax, or HOT tax, funds to promote tourism and other activities allowed by state law.
“The majority of that money will be spent advertising Leander as a destination to put people into that hotel,” said Bridget Brandt, president and CEO of the chamber. “That hotel’s success will really be the linchpin into: Will we be getting other hotels?”
The city’s first hotel, Holiday Inn Express & Suites-Leander is an 84-room hotel opening at 247 W. Metro Drive this fall.
In Texas, hotel owners, operators or managers must collect hotel taxes from guests, according to the Texas Comptroller website. The city of Leander’s HOT tax rate is 7%, and the state’s rate is 6%. By law, a city’s HOT tax revenue must be used to promote tourism.
Brandt said the chamber already works to advertise the city, particularly its festivals and events, but the funds will help the chamber promote the city on a broader scale. Brandt said in addition to advertising, a small percentage of the revenue can be used on historical preservation and art.
An agreement like this is common for smaller communities, she said.
“Rather than the city having to hire staff to execute these funds at this point, it makes sense [for the chamber] to continue that work,” Brandt said.
Brandt said the chamber plans to set up a tourism board made up of people in the community, such as people working in tourism, city staff and people involved in the chamber.
Leander City Council voted 5-0 to approve the agreement with the chamber, with council members Michelle Stephenson and Christine Sederquist absent. The contract states the chamber will receive 75% of the city’s HOT tax revenue on a downward sliding scale as funds increase.
By keeping a portion of its HOT tax revenue, the city can still use the funds to promote tourism in other ways if it deems necessary, city spokesperson Mike Neu said.
Each year, the chamber will report on its activities and present a proposed plan of work to Leander City Council for the next fiscal year. The agreement lasts for five years beginning Oct. 1 and is renewable for two successive 5-year terms, according to city documents.