Rental revenue and tax inputs
Navigating Hill Country lodging tax compliance
The Texas Hill Country’s limestone ridges and vineyards draw millions of travelers every year. Fredericksburg’s Main Street wineries stay packed, Llano hosts off-road rallies, and the Highland Lakes fill with boaters. This popularity fuels a thriving short-term rental market, but it also triggers a complex web of hotel occupancy taxes. Hosts must remit 6 percent to the state, while cities and counties tack on their own percentages to fund tourism bureaus, convention centers, or emergency services districts. Airbnb and Vrbo may collect the state portion, yet many local jurisdictions still expect the operator to file returns. This calculator helps hosts and property managers demystify those obligations by modeling revenue streams, taxable fees, and remittance schedules.
Start with nights booked and nightly rates. Hill Country rentals typically charge premium rates during wildflower season, grape harvest weekends, and holiday markets. The calculator separates peak and off-peak periods, letting hosts reflect these swings. Cleaning fees are equally important. Under Texas law, mandatory cleaning or pet fees are taxable because they are part of the cost of occupancy. Hosts that rely heavily on short stays may collect more in cleaning fees than in nightly rates during shoulder seasons, so including the per-booking fee paints a realistic revenue picture.
Platform fees represent the cut marketplaces take. Airbnb’s host fee usually sits around 14 percent, while Vrbo charges 5 percent but adds guest fees. The calculator multiplies gross revenue by the platform commission to show how much is siphoned off before taxes. This helps hosts determine whether they have the cash flow to remit occupancy taxes quarterly or whether they should set aside funds from each payout.
Occupancy tax rates vary by jurisdiction. The state’s 6 percent rate is universal. Cities such as Fredericksburg or New Braunfels commonly add 7 percent. Gillespie County charges an additional 2 percent to fund tourism promotion, while Llano County dedicates 2 percent to emergency services. Some water conservation districts or public improvement districts levy their own fraction. The calculator accepts all four layers. Its MathML formula clarifies the computation:
Where R is taxable revenue, s the state rate, c the city rate, k the county rate, and d the district rate. Because Texas taxes most charges collected for occupancy, the calculator treats both nightly rents and cleaning fees as taxable. If a host charges optional extras (like firewood bundles), they can subtract those amounts before entering totals.
The worked example illustrates how the numbers stack up. A Fredericksburg farmhouse books 120 peak nights at $375 and 80 off-peak nights at $265, totaling $74,300 in nightly revenue. It handles 140 reservations, each with a $135 cleaning fee, adding $18,900. Gross revenue hits $93,200. With a 14 percent platform fee, Airbnb withholds $13,048. The taxable base remains $93,200, leading to the following taxes: $5,592 to the state, $6,524 to the city, $1,864 to the county, and $1,864 to the emergency services district. Total occupancy tax owed reaches $15,844. After paying taxes and platform fees, the host keeps $64,308.
The table below summarizes those obligations.
| Jurisdiction | Rate | Tax due (USD) |
|---|---|---|
| State of Texas | 6% | $5,592 |
| City | 7% | $6,524 |
| County | 2% | $1,864 |
| Tourism district | 2% | $1,864 |
With quarterly remittance, the calculator recommends escrowing $5,281 per month to avoid scrambling for cash when reports come due. Hosts who remit monthly can divide the total by one, while those required to remit annually can adjust the escrow months to 12. The CSV output lists each component, creating a paper trail that accountants appreciate during tax season.
Beyond compliance, the article offers operational insight. Hosts often wonder whether to fold cleaning into nightly rates to simplify taxes. Because the state taxes both approaches, the financial impact is neutral, but bundling may reduce sticker shock for guests. Others debate whether to require longer minimum stays to cut cleaning turnovers. The calculator lets them see how fewer bookings reduce cleaning revenue—and thus tax exposure—without harming nightly rates.
Another nuance is platform collection. Airbnb remits the state tax on behalf of hosts, yet it may not cover city or county levies unless a specific agreement exists. Hosts should confirm whether the platform collects local taxes by reviewing their transaction history. If Airbnb collects only the state share, the host must still report total revenue and remit city and county amounts manually. The calculator’s detail list makes it easy to subtract the state portion already remitted, ensuring the host sends only the remaining obligations to local treasurers.
Limitations deserve attention. The tool assumes all bookings occur within the same jurisdiction. Hosts operating multiple properties across Wimberley, Dripping Springs, and Marble Falls should run separate calculations for each location because rates differ. It also treats all revenue as taxable, whereas extended stays beyond 30 consecutive days may be exempt. Refunds and chargebacks are not modeled; hosts should subtract those from gross revenue before using the tool. Finally, the calculator does not replace official filings—operators must still register with the Texas Comptroller, follow city deadlines, and keep receipts for audits. Still, by consolidating revenue forecasting with tax planning, this calculator keeps Hill Country hosts compliant while preserving cash flow for reinvestments like hot tubs, fire pits, or vineyard tours that keep guests coming back.