Hotel Occupancy Tax Reimbursement Grant

Grant Purpose

The purpose of the City of Buda Hotel Occupancy Tax Reimbursement Grant (HOT grant) is to provide hotel occupancy tax funds as a resource to organizations who are hosting tourism related events and activities that will bring visitors to Buda for overnight stays in Buda hotels.  

In order to qualify for HOT grant funding, the organization’s event/activity expenditures must also fit into one of the nine allowable uses of the tax as required by Texas state law. The Hotel Occupancy Tax Reimbursement Grant is reimbursement only. Funding is limited and is awarded on a first come, first serve basis starting at the beginning of the City’s fiscal year, which runs October 1 to September 30. Additionally, funding is determined based on the applicant’s ability to provide evidence of return on investment for the City of Buda hotel occupancy tax funds.  Applications are accepted four times a year.

Hotel Occupancy Tax (HOT) 101

 The Texas Tax Code provides a set of rules that state how the revenue from the HOT may be used. According to the Texas Tax Code, the use of HOT revenue is limited to expenditures that meet the following two-part test:  

  • First, every hotel occupancy tax revenue expenditure must directly enhance and promote tourism and the hotel and convention industry. See Tex. Tax Code 351.101(b). In other words, the expenditure must be likely to attract visitors from outside Buda into the city or its vicinity. If the expenditure is not reasonably likely to accomplish this result, it is not eligible for funding by HOT revenues.  
  • Second, each hotel occupancy tax revenue expenditure must fit into one of the nine categories shown below:  

Expenditure Categories. See Texas Tax Code §§ 351.101(a) and 351.110.

  1. Funding the establishment, improvement, or maintenance of a convention center or visitor information center
  2. Paying the administrative costs for facilitating convention registration
  3. Paying for advertising. Solicitations, and promotions that attract tourists and convention delegates to the county or its vicinity
  4. Expenditures that promote the arts. Please note that it is not enough that a facility or event promotes the arts; state law requires that the expenditure also must be likely to directly promote tourism and the hotel and convention industry.
  5. Funding historical restoration or preservation programs
  6. Certain sporting event-related expenses
  7. Certain sporting-related structures
  8. Certain tourist shuttles
  9. Signage directing tourists to attractions frequently visited by hotel guests

Date Restrictions

Since the purpose of the HOT grant is to attract visitors to Buda for overnight stays in Buda hotels, the funds will not be awarded for tourism-related events or activities that occur during times of peak hotel occupancy. All date restrictions will be identified prior to the fiscal year in which HOT grant funds are being awarded and are listed below:  

  1. Formula 1 – October 20-22, 2023
  2. Austin City Limits – October 6-15, 2023
  3. Buda’s Birthday – April 6-April 8, 2024
  4. SXSW - March 8-16, 2024
  5. MotoGP – April 12-14, 2024

Application Submission Deadlines

Application packets, along with any required supporting documents, must be fully completed and submitted to the City of Buda Department of Destination Services prior to the tourism-related event/activity. Applications submitted after the due date will not be accepted or considered for funding.  

Applications are submitted online through the online portal located at www.discoverbuda.com/grants  in person at the Welcome Center located at 303 Main Street, Buda, TX 78610.

Funding Determination

1. Applicants who qualify to receive HOT grant funds will be awarded a set amount of funding per room night based on the average daily room rate for Buda hotels. The average daily room rate is established and set at the beginning of the fiscal year by the Buda City Council.

FY2023 Average Daily Room Rate: $120.00  

  1. Funding is capped at $10,000 per event.
  2. Evaluation for funding is determined by room nights obtained as a direct result of the tourism-related event or activity. The number of room nights is determined through past event data provided by the applicant and may be verified by the City of Buda Destinations Services Department

For example, if an event has historically obtained 50 room nights as a direct result of their event, then the funding would equate to $120 multiplied by 50 room nights for a total of $6,000 in HOT grant funding.  

Disclaimer: Hotel Occupancy Tax Reimbursement Grants are not guaranteed. All HOT grant applications must be reviewed for completeness and eligibility by city staff and allocation of funds is awarded at the discretion of Buda City Council.  

Post Event Report, Proofs or Payment, and Required Documentation

It is the responsibility of the event organization/representative to report the number of non-local quests (meaning out of a 50-mile radius of Buda) and number of room night stayed in Buda's lodging properties that resulted from the event. (Please note that room nights generated in surrounding areas -outside of the Buda city limits - do not fulfill the requirments of the state law and will not be credited to your event.) Post-event documentation must be submitted no later than 60 days following the event/expenditure and should be submitted to the Department of Destination Services through the online portal located at www.discoverbudatx.com/grants. This grant is a reimbursement grant. To receive funds, you must submit the following:

  • Cover letter
  • Number of Attendance
  • Room night stays with proof
  • Proof of event notices sent to hotels
  • Proof of the listing of Buda Hotel on the website
  • Proof that the provided tracking link was listed on the website
  • W9
  • Proof of payment for eligible, reimbursable expenses, which includes: receipts, copies of canceled checks, and bank/credit card statements. (Please note: statements, invoices, estimates, quotes, incursion orders, ad agreements, and in-kind or trade agreements will not be accepted.)
  1. Application Review Process
  2. Applications Rules & Guidelines
  1. All applications will be reviewed by the Department of Destination Services liaison of the City of Buda for completeness and to ensure expenditures will directly promote City of Buda tourism and its lodging industry. The applicant may be contacted to answer additional questions regarding the application information and expenditure details. All applications submitted by the deadline with eligible, reimbursable expenses will be reviewed by the HOT Grant Committee to evaluate the information submitted.  
  2. Application Review Timeline (Please note dates are subject to change.)
    Event MonthDue DateCommittee ReviewCity Council Review
    October - December 2023August 1, 2023August 8, 2023August 15, 2023
    January - March 2024November 1, 2023November 28, 2023December 5, 2023
    April - June 2024February 1, 2024February 13, 2023February 20, 2023
    July - September 2024May 1, 2024May 14, 2024May 21, 2024
  3. The City of Buda Department of Destination Services will send notification emails to applicants informing them of the decision for funding by the Buda City Council within three (3) business days of the council meeting. 

    The decision of the Buda City Council for either the funding amount or denial of funding is final. (Failure to receive funding in one budget year does not prevent a resubmission in the next budget year.) Applicants receiving funding are entering into an agreement with the City of bua and are required to execute all subsequent documentation as described in the application information.