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

Yes—explicitly allowed. Short-term rentals are permitted and regulated in Canyon, Texas under City Ordinance No. 1198 (Short-Term Rental Registration, Chapter 9, Article 9.05). The city defines a short-term rental as a dwelling unit rented for less than 30 consecutive days. STRs are allowed within the city limits and within one mile (the city’s extraterritorial jurisdiction), subject to registration, safety inspections, ongoing operating requirements, and hotel occupancy tax (HOT) compliance.

Key points:

• Both state and local hotel occupancy taxes apply.
• Canyon’s HOT local rate is 7%; the Texas state HOT rate is 6% for rooms costing $15 or more per day.
• Airbnb/VRBO do NOT remit Canyon’s local HOT; hosts must register, collect, and file the 7% local tax and the 6% state tax through the city’s Localgov portal.

How to Start a Short-Term Rental Business in Canyon

1. Property preparation:
   • Verify zoning and building compliance; confirm applicable city ordinances (zoning, parking, sanitation, signage).
   • Install all required safety equipment before scheduling inspection.
2. Register your STR:
   • Create an account and complete registration at tax.localgov.org/login.
   • Pay application, technology, and safety inspection fees.
3. Safety inspection:
   • Schedule with the Planning & Development Office at least two days in advance (someone must be present for the entire inspection window).
   • Reinspection fees apply if the initial survey fails or violations are found.
4. Insurance:
   • Obtain liability/host protection insurance with at least $1 million per occurrence coverage; provide certificate of insurance to the city.
5. Tax setup:
   • Register for HOT collection and filing; STRs are set up for quarterly filing unless they exceed $500/month or $1,500/quarter (then file monthly).
6. Operating:
   • Post the permit; provide a guest brochure with emergency info and safety equipment locations; maintain compliance with all city codes and building/fire standards.
7. Renewal:
   • Submit annual permit renewal; complete self-inspection form during renewal.

Required Documents, Permits, Licenses, and Guidelines

• Short-Term Rental Registration Application (via Localgov).
• Certificate of Liability Insurance ($1 million minimum per occurrence).
• Safety inspection completion by Canyon Fire Department.
• Guest information brochure containing:
  • 24-hour operator contact information.
  • Neighborhood rules: parking restrictions, noise/amplified sound limits, trash collection schedules.
  • Emergency/non-emergency contacts (police, fire, EMS) and severe weather alert instructions.
  • Life safety equipment locations.
• Hotel Occupancy Tax Registration (Localgov portal) for both state and local taxes.
• Permit display:
  • Post approved STR permit conspicuously inside the front entrance.

Safety Equipment Requirements

All STRs must be equipped with the following before initial registration and maintained thereafter:

• Address numbers: minimum 4-inch tall numbers visible from the street facing the unit.
• Smoke detectors: operational units in all sleeping rooms and immediately outside sleeping rooms.
• Carbon monoxide detector: required if the home uses natural gas or propane.
• Deadbolt locks: on all doors providing access to the dwelling, readily openable from inside without keys or special knowledge.
• Fire extinguisher(s): minimum rating 1A:10B:C; one per floor (including finished basement).

Additional compliance:

• Maintain adherence to adopted building and fire codes and other city ordinances (zoning, parking, sanitation, signs).

Specific Regulations: City, County, and State

City of Canyon (primary STR regulation):

• Registration required; annual renewal with self-inspection form.
• Initial safety survey by Fire Department; additional surveys permitted with 24-hour notice under certain circumstances (ownership change, alterations affecting occupancy/safety, or safety-related complaints).
• Permit denial grounds: false/misleading application statements; unpaid city fees; prior revocation within 18 months; violations of city ordinances or applicable laws.
• Permit revocation grounds: non-compliance; false/misleading applications; three (3) noise/traffic complaints within 24 months; serious public health/safety threat; HOT non-payment.
• Appeals: submit written appeal to Planning & Development within five (5) business days; placed on Planning & Zoning Commission meeting agenda if received 30 days prior; applicant may be heard.
• County/city nuisance, noise, parking, and zoning rules apply to STR operations and guest behavior.

County (Randall County):

• No county-specific short-term rental regulations are identified in the provided sources; STRs are governed by Canyon city rules within city limits and ETJ. State laws remain applicable.

State of Texas:

• Hotel Occupancy Tax (state) rate is 6% for rooms costing $15 or more per day.
• Applies to hotels, motels, B&Bs, apartments, houses, condominiums, and short-term rentals.
• Additional details on requirements, exemptions, penalties, and filing procedures are available via the Texas Comptroller.

Tax scope and filing:

• Local (Canyon) HOT rate is 7%; state HOT rate is 6% (13% combined).
• Tax is imposed on the cost of occupancy when $2 or more per day.
• The 15% cap: if the combined state, county, and municipal HOT rates exceed 15% of the room price, the local tax will only be levied within the city’s corporate limits (not within the ETJ). Operators are responsible for tax collection regardless of whether payment is made directly or through a third party.
• Filing deadlines:
  • Monthly filers (including hotels/motels and STRs exceeding thresholds): remit by the 20th business day of the month following collection.
  • Quarterly filers (STRs below thresholds): remit by the 20th business day of the month following the end of the quarter.
• Airbnb/VRBO remit state HOT for Texas but do NOT remit Canyon’s local tax; hosts must submit Canyon’s 7% local tax via Localgov.

Permit denial and revocation (summary):

• Denial: incomplete/ inaccurate/false application; unpaid fees; prior revocation within 18 months; ordinance violations.
• Revocation: failure to comply; false/misleading statements; 3 complaints in 24 months (excessive noise/traffic); health/safety threat; HOT non-compliance.
• After revocation, property is ineligible for registration for one (1) year; continued operation post-suspension/revocation is a violation.

Penalties and enforcement:

• Misdemeanor charges for failure to collect/report/remit HOT.
• 5% penalty of owed tax per each 30-day period beyond the due date for unpaid taxes or unfiled reports.
• Violations may result in permit suspension or revocation.

Renewal:

• Self-inspection form during annual permit renewal.

Fees (authorized; see City Fee Schedule Appendix A–A1.018)

• Application Fee (non-refundable).
• Annual Application Renewal Fee.
• Safety Inspection Fee (non-refundable).
• Safety Reinspection Fee (non-refundable; charged if initial survey fails or violations identified).
• Technology Fee (non-refundable).

Exact fee amounts are established in the City’s Fee Schedule (Appendix A—A1.018). Check the Fee Schedule and the handouts page for current details or contact the Planning & Development Office for current amounts.

Filing and Payment

• All registrations, payments, and filings must be submitted via Localgov (tax.localgov.org).
• Short-term rentals default to quarterly filing unless tax owed exceeds $500 in a calendar month or $1,500 in a calendar quarter; in those cases, monthly filing is required.
• Hotels/motels within the city are set up for monthly filing.
• Zero-revenue filings: hotels must file monthly even with zero revenue; STRs are not required to file for months with zero revenue.

Penalties and Violations

• Operating without a permit or non-compliance with city ordinances is unlawful and subject to penalties under Section 2.08.096 of the City Code.
• Failure to timely pay HOT: 30 days from notice of delinquency to submit taxes before permit revocation begins.
• Misdemeanor classification for tax collection/reporting non-compliance.
• 5% penalty per 30-day period for unpaid taxes or unfiled reports.

Contact Information for Local Authorities

• Planning & Development (STR registration, safety inspections, ordinances):
  • Phone: (806) 655-5000, Option 6
  • Email: planning@canyontx.gov
• Permit & Inspections (general permitting):
  • Phone: (806) 655-5014 (Planning & Development Office)
  • Permit & Inspections Direct Line: (806) 655-5034
• Localgov Customer Service (tax filing portal support):
  • Phone: (877) 842-3037
  • Email: service@localgov.org
  • Help Center: service.localgov.org/knowledge
  • Meeting scheduling: calendly.com/localgov/localgov-customer-service-meeting
• Canyon Fire Department (safety surveys scheduled via Planning & Development):
  • Contact: Planning & Development Office; Phone: (806) 655-5000, Option 6
• City of Canyon (general information):
  • Address: 301 16th Street, Canyon, TX 79015
  • Phone: (806) 655-5000
  • Website: www.canyontx.gov

Links to Source Pages (Key)

• Canyon, TX—Hotel Occupancy and Short-Term Rental Tax Info: www.canyontx.gov/664/Hotel-Occupancy-and-Short-Term-Rental-Ta
• Localgov Online Tax Filing Portal (login): tax.localgov.org/login
• Localgov Help Center: service.localgov.org/knowledge
• City of Canyon Code of Ordinances (Hotel Occupancy Tax provisions): ecode360.com/41660578
• City of Canyon Fee Schedule: ecode360.com/41670003
• Texas Comptroller—Hotel Occupancy Tax (state requirements): comptroller.texas.gov/taxes/hotel/
• City of Canyon—Handouts/Permits & Inspections (Planning & Development): www.canyontx.gov/150/Handouts
• STRProfitMap—Canyon STR Regulations Overview: www.strprofitmap.com/regulations/TX/canyon

Notes on application:

• Verify current city fee amounts in Appendix A—A1.018 and handouts before submitting applications.
• If the combined HOT rate (state + county + municipal) exceeds 15%, the local 7% tax applies only within city corporate limits, not the ETJ.
• Always confirm your property’s zoning and any neighborhood-specific rules (e.g., parking, noise) prior to operation.