By GvilleTX Newsroom
DENISON — Denison is considering changes to its hotel occupancy tax rules that would allow short-term rental platforms such as Airbnb and Vrbo to collect and send the city's local lodging tax on behalf of property owners, according to an Aug. 17 City Council packet. The proposal matters beyond Grayson County because Gainesville and other nearby towns are dealing with the same question: how to apply local lodging rules as home rentals become part of the visitor trade.
The proposed amendments to Chapter 24, Article III of Denison's tax ordinance were listed on the council agenda as a project update for discussion and direction, not as final adoption. City staff said council direction would shape a final ordinance for later consideration.
Denison staff described the change as a tax-compliance measure. Under the current system, hotel and short-term rental operators must register with Avenu Insights before remitting Denison's hotel occupancy tax, which the city lists at 7% and due on the 15th day of the month.
The staff report did not verify a claim that most short-term rentals are failing to remit the local tax. Instead, staff said Denison cannot confirm that every eligible short-term rental is collecting and remitting the tax because compliance now depends on individual operators registering and reporting their activity.
If adopted, the ordinance would give short-term rental platforms about three months to put the new collection system in place, according to the staff report. Staff said Airbnb and Vrbo would collect Denison's tax from guests for bookings made through their platforms and send the city one monthly payment, without charging the city fees or commissions.
Denison staff said the change is expected to bring platform-booked short-term rentals into full compliance. Staff also said the city could eventually end its Avenu contract for short-term rental monitoring and compliance, saving the General Fund at least $12,000 a year.
Denison Tourism Manager Jordan Starr had already raised the issue with the Convention and Visitors Bureau Advisory Board, according to July 13 minutes included in the board's Aug. 10 packet. Starr told the board that city staff were working with Airbnb and Vrbo and that platform collection would likely require City Council approval of an ordinance.
Denison's earlier records show why the city has kept attention on short-term rentals. A 2020 staff report said active short-term rentals in Denison roughly doubled over about a year and performed above local hotels on occupancy during the pandemic period covered by that report.
The tax question also comes as Denison's proposed FY2027 budget shows its hotel occupancy tax fund balance projected to fall sharply from FY2025 actuals. The same budget lists short-term rental taxes as a much smaller revenue line than hotel occupancy taxes.
State tax guidance treats houses, apartments and condominiums as lodging subject to hotel occupancy tax when rented for short stays, according to the Texas Comptroller. The Comptroller says the state rate is 6%, with cities and other local governments allowed to add local hotel taxes within state limits.
Gainesville records show short-term rentals remain active as a local land-use issue in Cooke County. The city's Sept. 1 agenda packet included proposed special use permits for short-term rentals at 507 S. Lindsay and 115 W. California, while Gainesville's 2018 ordinance addressed registration, parking, occupancy, events and annual rental-day reporting.
_Editor's note: Everyone charged with a crime is presumed innocent unless and until proven guilty in a court of law._
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