Overview: Are Short-Term Rentals Allowed in Caldwell, TX?

Short-term rentals are explicitly allowed in the City of Caldwell. Under Chapter 11.04 of the City’s Hotel Occupancy Tax (HOT) Ordinance, a short-term rental (STR) is defined as “any location where sleeping accommodations are provided for consideration,” and it includes properties advertised or booked through platforms such as Airbnb, VRBO, or HomeAway. The City considers STR operators to be lodging providers and requires them to collect and remit the City’s Hotel Occupancy Tax alongside the State’s Hotel Occupancy Tax. The combined rate applicable to short-term lodging within the City and its Extraterritorial Jurisdiction (ETJ) is 13% (7% City + 6% State).

Note: This guide addresses tax and reporting obligations. It does not cover zoning, land use, building, or health and safety licensing requirements specific to STRs because the provided documents do not include city zoning/development or permitting rules for STRs. Always verify local zoning and permitting requirements directly with the City of Caldwell Planning & Development and/or the Building Official before operation.

How to Start an STR Business in Caldwell, TX

The CityHOT ordinance treats STRs the same as hotels for tax purposes. The following steps outline the practical path to get into compliance and start collecting/remitting taxes correctly.

1. Confirm Location and Tax Jurisdiction

• City limits: You must collect and remit both the City HOT (7%) and the State HOT (6%) for a total of 13%.
• City’s Extraterritorial Jurisdiction (ETJ): The CityHOT applies; you must collect and remit both City (7%) and State (6%) taxes.
• Unincorporated Caldwell County (outside City and ETJ): Only State HOT (6%) applies.

2. Register Annually with the City of Caldwell

• Complete and file the City of Caldwell Hotel Registration Form annually.
• The City uses this registration to maintain accurate information about lodging providers operating within City limits and the ETJ.
• Annual registration ensures you remain on the City’s filer roster and receive updates.

3. Collect Taxes at the Time of Payment

• CityHOT (7%): Collect on all taxable stays (rooms costing $2.00 or more per day and ordinarily used for sleeping).
• State HOT (6%): Collect on the same base; remit separately to the State of Texas.
• If a valid exemption applies (e.g., long-term stay ≥30 consecutive days with no interruption in payment), document it and do not collect. Maintain documentation for audit purposes.

4. File Reports and Remit Taxes

• File either monthly or quarterly (quarterly filing is allowed if you owe less than $500 per month or less than $1,500 per quarter).
• Reports are due by the 20th of the month following the reporting period; if the due date falls on a weekend or City holiday, the next business day applies.
• Even if no tax is due (e.g., no activity or only exempt stays), a report must be filed for every period.

5. Maintain Records

• Keep complete records of all receipts, exemptions, and reimbursements.
• Records may be requested for audit or verification.
• Retain supporting documentation for any exemption claimed.

6. Post-Sale Compliance

• If purchasing an existing lodging business (including an STR), both buyer and seller have obligations:
  • Buyer: Withhold sufficient purchase price to cover any outstanding City HOT until the City issues a tax clearance certificate.
  • Seller: Provide a City-issued receipt showing all taxes due have been paid, or a certificate stating no taxes are due.
• If the buyer fails to withhold and taxes are later found owed, the buyer may be liable up to the full purchase price.
• Request a tax clearance certificate from the City; if the City does not respond within 60 days, the buyer is released from withholding obligations.

Required Documents, Permits, Licenses, and Guidelines

Based on the provided CityHOT materials, the following are the core compliance documents and steps:

• City of Caldwell Hotel Registration Form (annual)
• Hotel Occupancy Tax Report (monthly or quarterly filing)
• Evidence of remittance:
  • City of Caldwell HOT remittances for the 7% City rate
  • State HOT remittances for the 6% State rate
• Documentation of any tax-exempt stays:
  • Long-term guests (≥30 consecutive days, no interruption)
  • Nonprofit organizations organized exclusively for religious, charitable, or educational purposes
  • U.S. Government travelers on official business
  • State of Texas (with applicable exceptions/refunds under Texas Tax Code §156.103)
• Records sufficient to support exemption claims
• If purchasing a hotel/STR, obtain:
  • City-issued Certificate of No Tax Due, or
  • Statement of Outstanding Taxes due
  • Retain proof of the 60-day request and City response

Note: The CityHOT materials do not provide evidence of a separate STR business license, zoning permit, or health and safety inspection process. Those items may exist outside the HOT ordinance and should be confirmed with the City’s Planning & Development and Building Department.

Specific Regulations for Short-Term Rentals: City, County, and State

City of Caldwell (HOT, Chapter 11.04)

• Tax scope: Applies within City limits and the ETJ to any hotel, motel, bed and breakfast, boarding house, tourist home, and any STR providing sleeping accommodations for consideration.
• Combined tax rate: 13% (City 7% + State 6%).
• Minimum tax threshold: Tax applies when the room costs $2.00 or more per day.
• Filing cadence: Monthly (required) or quarterly (if total tax owed is less than $500 per month or $1,500 per quarter).
• Due date: 20th of the month following the reporting period; next business day if due date falls on a weekend/holiday.
• Required filings: Even if no tax is due or no taxable activity occurred.
• Penalties and interest:
  • 1–30 days late: Tax due + 5% penalty
  • 31+ days late: Tax due + 10% annual interest
• Definitions:
  • Hotel: Any building where the public obtains sleeping accommodations for consideration.
  • STR: Any location where sleeping accommodations are provided for consideration; includes platforms such as Airbnb, VRBO, HomeAway.
• Exemptions (CityHOT):
  • Long-term stays: ≥30 consecutive days with no interruption in payment.
  • Nonprofit: Organized and operated exclusively for religious, charitable, or educational purposes; cannot distribute net earnings to private shareholders.
  • U.S. Government: Travelers on official business.
  • State of Texas: Most state agencies must pay but may apply for a refund; institutions of higher education may be exempt (Texas Education Code §61.003).
• Refunds: Available if exempt organizations were charged; file a refund application with supporting documentation on the City’s prescribed form.

Caldwell County (Development Ordinance, no STR-specific rules identified)

• The provided Caldwell County Development Ordinance governs subdivision platting, construction permits, drainage, streets, floodplain, and related development procedures in unincorporated areas.
• It does not include STR-specific definitions, licensing, or operational rules.
• If the STR property lies outside the City’s ETJ and is governed by County development rules, those rules relate to land division and infrastructure construction rather than STR occupancy or taxation.

State of Texas (Hotel Occupancy Tax)

• Texas HOT rate: 6%.
• STR operators and other lodging providers must register with the Texas Comptroller and remit State HOT.
• Combined obligation with CityHOT: 13% total tax for properties in the City or its ETJ; 6% for properties outside City/ETJ.
• Exemptions align with the Texas Tax Code:
  • Long-term stays (≥30 consecutive days)
  • Nonprofit organizations with qualifying status
  • U.S. Government officials on official business
  • Texas state agencies (with refund mechanisms)
• Filing frequency and due dates are aligned with the Comptroller’s schedule; the CityHOT documents state the City follows the Comptroller’s reporting schedule (Section 156.151 Texas Tax Code).

Contact Information: City and State

City of Caldwell – Finance Department

• Phone: 979-567-3271 (extension 111)
• Address: 114 S. Echols St., Caldwell, TX 77836
• Email: communications@caldwelltx.gov
• Website: www.caldwelltx.gov/occupancytax
• Notes: Contact the Finance Department for HOT registration, filing guidance, and tax clearance certificates.

Texas Comptroller – Hotel Occupancy Tax

• Phone: Not provided in the source documents (obtain via Comptroller website)
• Website: Not provided in the source documents (refer to Texas Comptroller’s office online)
• Purpose: State HOT registration and remittance; refund applications for State exemptions

Links to Source Pages

• City of Caldwell – Hotel Occupancy Tax page (Chapter 11.04): www.caldwelltx.gov/occupancytax
• City of Caldwell – Code of Ordinances (for Chapter 11.04 and related legal text): ecode360.com/CA6266
• Caldwell County – Development Ordinance (Rev. 02.14.2023): www.co.caldwell.tx.us/page/open/822/0/CALDWELL%20COUNTY%20DEVELOPMENT%20ORDINANCE_Rev.%2002.14.2023.pdf

Practical Checklist for STR Investors in Caldwell, TX

• Confirm tax jurisdiction: City/ETJ (13% combined) vs. unincorporated County (6% State only).
• Register annually with the City of Caldwell using the Hotel Registration Form.
• Collect both City and State HOT at the time of payment (unless a valid exemption applies).
• Decide filing frequency: monthly by default or quarterly if under the thresholds.
• File every period, even when no tax is due; maintain complete records.
• If purchasing an STR or lodging business, obtain a City tax clearance certificate and consider withholding purchase funds until cleared.
• Verify zoning, land use, and any building/health permits with the City’s Planning & Development and Building Department, as those were not provided in the HOT materials.

Caveats

• The CityHOT materials do not include zoning or building/health licensing rules for STRs. Consult the City Planning & Development and Building Department before listing or operating to confirm whether additional local approvals are required.
• While the CityHOT guidance references State exemptions and reporting cadence, it does not provide the Comptroller’s online portal links or phone numbers; obtain current Comptroller contact details from the Comptroller’s website.