Baylor University
Tax & Compliance Department
Financial Services

Sales / Hotel Tax

Sales tax is a tax charged by a state and/or local government on the purchase of certain goods and services chosen by the state. Many states also apply this type of tax to the rental of lodging, calling it a "hotel tax" or "occupancy tax". There is no "federal" sales tax.

Texas has a statewide sales tax rate of 6.25%, and also allows many different divisions of county and local governments to charge additional amounts, not to exceed 2% in total. Texas also has a separate hotel occupancy tax of 6%. Baylor University has been granted a sales tax exemption for certain items, as well as a hotel occupancy tax exemption in certain circumstances because of its nonprofit status. Please see Texas Sales Tax Issues and Texas Hotel Tax for further information.

In addition, forty-three states also currently have their own sales tax applications, and most also have an occupancy or hotel tax. The application of these taxes can be complicated; New York for instance allows each borough, as well as different cities located within such, to collect its own. Baylor's exemption status varies depending on the final location of the sale. Information at Other States Sales Tax and Other States Hotel Tax provides further details. Please contact the Tax Office (x8596) if you have questions.

Finally, the United States federal government imposes different excise taxes, such as on the purchase of trucks, trailers, and other vehicles, and on the purchase of transportation fuels. These excise taxes should be considered in addition to any state imposed taxes. If your department is involved in the purchase of these items, please contact the Tax and Compliance Office (x8765). It is possible that Baylor University has an exemption that will apply.