Cars travel down the Central Texas Expressway in Killeen past a series of hotels and motels in 2017.

Amidst a pandemic, Killeen has reached a record high for annual revenue collected by the state as part of the hotel/motel occupancy tax.

For the 2021 fiscal year, Killeen received $96,785 in revenue from the tax, 28.6% higher than last year, and 8% higher than pre-pandemic levels.

City officials have not gone into detail into how or why the fund has increased while the COVID pandemic has continued.

“The reason the fund is up is because hotel/motel occupancy is up,” City Manager Kent Cagle said in a brief statement in response to questions from the Herald this week. He was not more specific on why or how hotel occupancy is up in Killeen.

The funds go into the city’s Hotel Occupancy Fund.

The Hotel Occupancy Fund is made possible via the hotel/motel occupancy tax, which is used to help build out the city’s Community Development Block Grant, a program which subsidizes nonprofit organizations within the city, such as Vive Les Arts Theatre. The CDBG is primarily funded through the Texas Department of Housing & Community Affairs (HUD).

The fund is collected throughout the year by both the city and the state of Texas. Killeen charges a 7% tax on any room booked within the city limits, while the state charges a 6% tax for a 13% hotel occupancy tax. At the end of the year, the state redistributes funds it collects throughout the state’s counties, which then redistributes those funds into local cities.

The city’s revenue is listed within the Fiscal Year 2022 budget as the “Occupancy Tax” while state funding is listed as the “Hotel Occupancy Tax.” The city has not yet released final revenue from 2021 tax collections that will go into next year’s occupancy tax fund.

Last year, the hotel fund dropped by approximately 15.9%, from $89,594 in 2019 collections to $75,331 in 2020 collections. | 254-501-7552

(1) comment


Before we start spending based on this years $#, we might need to stop and analyze any increase in nightly room rates . If 7% of this year # =x what is increased nights vs increased cost

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