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

YES — Short-term rentals are explicitly allowed in Killeen, Texas, but they are strictly regulated. The City of Killeen launched its Short-Term Rental Registration Program on May 1, 2024, requiring all STR operators to obtain proper permits and comply with comprehensive regulations. Properties rented for less than 30 consecutive days fall under this mandatory registration requirement, including entire homes, rooms within homes, guest houses, and duplex units rented separately.

How to Start a Short-Term Rental Business in Killeen

Step-by-Step Process

1. Prepare Required Documentation

   • Gather proof of liability insurance ($500,000 minimum)
   • Compile owner information (legal name, DOB, contact details, addresses)
   • If using a property manager, prepare their information
   • Prepare application fees

2. Register with the City's Consultant

   • Visit the Avenu registration portal at www.hoteltaxonline.com/default_sto.aspx
   • Create an account and submit application
   • Note: Registration fee waiver was available through May 31, 2024

3. Schedule and Pass Safety Inspection

   • All STRs must be inspected before permit issuance
   • Inspection covers minimum health and safety requirements
   • Re-inspection required for annual renewals

4. Obtain Permit

   • Permit expires on the last day of the month it was originally issued
   • Must be renewed annually

5. Set Up Tax Collection System

   • Register for Hotel Occupancy Tax remittance
   • File monthly returns (even zero returns)
   • Collect taxes from guests at 15% total (7% city, 6% state, 2% county)

Required Documents, Permits, Licenses, and Guidelines

Mandatory Permit Requirements

• Initial Permit Fee: $200 (includes first inspection)
• Renewal Fee: $100 annually
• Insurance Requirement: Minimum $500,000 liability coverage including personal injury liability
• Inspection: Required for initial permit and annual renewals

Application Information Required

• Owner's legal name, date of birth, contact number
• Physical and mailing addresses
• Email address
• If using a property manager: responsible party's information with day-to-day authority
• Signatures of owner and responsible party (if applicable)
• Proof of insurance

Tax Compliance Requirements

• Hotel Occupancy Tax registration through Avenu
• Monthly filing obligation (even for zero rentals)
• 15% total tax rate breakdown:
  • City of Killeen: 7%
  • State of Texas: 6%
  • Bell County: 2%

Specific Regulations

City of Killeen Regulations (Code of Ordinances Sec. 31-953)

• Permit required before advertising or operating STR
• No grandfathering — all existing STRs must obtain permits
• Safety inspection mandatory prior to permit issuance
• Annual permit renewal required
• Operating without permit is a violation subject to citations and fines
• No current zoning or saturation limits implemented

Insurance Requirements

• $500,000 minimum liability insurance mandatory
• Must include personal injury liability
• Coverage must be active for full permit term
• Proof required for permit issuance
• City may deny applications without proper insurance

Tax Obligations

• Monthly Hotel Occupancy Tax filing required
• Back taxes owed since May 1, 2024 if previously operating without registration
• Penalty and interest waiver available for taxes filed by May 31, 2024 (for October 2023-April 2024 period if taxes were collected)
• Security deposits and platform fees are non-taxable
• All other guest charges (room rate, cleaning fees, pet fees) are taxable

Exemptions

• Tax Exemptions Available For:
  • Permanent residents
  • Diplomatic personnel with tax exemption card
  • Federal/state employees on official business
  • Federal/state military personnel on official business
• No Permit Exemptions: All properties rented for less than 30 consecutive days require permits

Operational Requirements

• Must file monthly tax returns regardless of rental activity
• Responsible party must promptly update city with any information changes
• Joint responsibility for guest compliance with local laws
• Property must meet minimum health and safety standards

Contact Information

City of Killeen

General Information:

• Phone: (254) 501-7600
• Address: 101 N College Street, Killeen, TX 76541
• Website: www.killeentexas.gov/654/Short-Term-Rentals

Code Enforcement:

• Phone: (254) 501-7608

Police (Non-Emergency):

• Phone: (254) 501-8830
• Emergency: 911

Tax Collection (Avenu)

Support:

• Toll-Free Phone: (866) 240-3665
• Email: supportmuni@avenuinsights.com
• Website: www.hoteltaxonline.com/default_sto.aspx

State Resources

Texas Hotel and Lodging Association:

• Phone: (512) 474-2996
• General: (800) 856-4328
• Website: texaslodging.com/

County Resources

Bell County Hotel Occupancy Tax:

• Website: www.bellcountytx.com/county_government/commissioners_court/hotel_occupancy_tax.php

Source Links

1. City of Killeen STR Program: www.killeentexas.gov/654/Short-Term-Rentals
2. STR FAQ Page: www.killeentexas.gov/faq.aspx?TID=24
3. Avenu Tax Collection Portal: www.hoteltaxonline.com/default_sto.aspx
4. KCEN News Coverage: www.kcentv.com/article/news/local/killeen-residents-must-register-airbnb-with-city-in-order-to-rent-out/500-aa1dee6f-852b-4894-8b86-0b5ff3980ed1
5. Bell County HOT Information: www.bellcountytx.com/county_government/commissioners_court/hotel_occupancy_tax.php
6. Texas Hotel and Lodging Association: texaslodging.com/

Important Notes for Investors:

• The registration fee waiver period has expired, so new applicants should expect to pay the $200 initial permit fee
• Back taxes may be assessed for operations prior to May 1, 2024
• Monthly tax filing is mandatory regardless of rental activity
• Consider the 15% tax burden when setting pricing strategies
• Insurance costs should be factored into operating budgets
• The city has not implemented saturation limits, allowing for potential portfolio building
• Workshop information is available through the city website for ongoing education

This comprehensive regulatory framework represents a mature STR market with clear compliance requirements, making Killeen a viable but regulated investment opportunity for serious operators willing to comply with municipal oversight.