Lakeway City Council establishes HOT tax commission

On May 21, Lakeway City Council approved an ordinance establishing a seven-member Lakeway Visitors Commission.

The commission will assist City Council in administering the revenue generated by the hotel occupancy tax (HOT). Under state law, the money generated by the HOT tax must go toward promoting tourism and the utilization of hotel, motel and convention facilities in Lakeway.

The ordinance requires at least three people on the commission to be from the hospitality industry. The members on the commission will be nominated by the mayor and approved by City Council.

"We want to do it right, and we think this sort of approach, a structured approach with a group of very interested and talented people to administer it, will give us the maximum assurance that we are meeting all the requirements of the law ... and [getting] the maximum amount of benefit for the city," Councilman Alan Tye said. "I'm really excited about it."

Lakeway City Council in April unanimously approved the implementation of the HOT tax. The tax that will be levied on guests of hotels, motels, and bed and breakfasts within Lakeway city limits will go into effect July 1.

The new tax, which will be in addition to the 6 percent tax levied on hotels by the state, will be 3 percent the first year, 5 percent the second year and 7 percent the third and following years.

The HOT tax is expected to generate hundreds of thousands of dollars per year.