AI-assisted research summary: County hotel room tax increases generally do not apply to preexisting contracts that were signed before the higher rate or new tax takes effect, unless the contract can be changed because of the tax change.
Sec. 352.0031. PREEXISTING CONTRACTS. (a) If a county increases the rate of the tax authorized by this chapter, the increased tax rate does not apply to the tax imposed on the use or possession, or the right to the use or possession, of a room under a contract that was executed before the date the increased rate takes effect and that provides for the payment of the tax at the rate in effect when the contract was executed, unless the contract is subject to change or modification by reason of the tax rate increase. (b) This subsection applies only to a contract that provides for the payment of one or more taxes imposed on the use or possession, or the right to the use or possession, of a room that is in a hotel, including a tax authorized by Chapter 156 or 351 of this code or by Subchapter H, Chapter 334, Local Government Code. If the commissioners court of a county adopts an order or resolution imposing a tax under this chapter as authorized by Section 352.002 and the tax was not imposed at any rate before the effective date of the tax prescribed by the order or resolution, the imposition of the tax does not apply to the use or possession, or the right to the use or possession, of a room under a contract executed before the date the imposition of the tax takes effect, unless the contract is subject to change or modification by reason of the imposition of the new tax. (c) The tax rate applicable to the use or possession, or the right to the use or possession, of a room under a contract described by Subsection (a) is the rate in effect when the contract was executed. Notwithstanding Section 352.002, no tax is imposed under this chapter on the use or possession, or the right to the use or possession, of a room under a contract described by Subsection (b). Added by Acts 1989, 71st Leg., ch. 1110, Sec. 12, eff. Oct. 1, 1989. Amended by: Acts 2017, 85th Leg., R.S., Ch. 267 (H.B. 1896), Sec. 5, eff. September 1, 2017.