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

Yes, short-term rentals are allowed in Carrollton, Texas, but with significant restrictions and requirements. The City of Carrollton adopted Ordinance 1466 on December 6, 2022, establishing a regulatory framework for both Short-Term Rentals (STRs) and Bed & Breakfast (B&B) operations. However, there is currently a one-year interim prohibition on approving new STR and B&B applications effective May 6, 2025.

Key restrictions include:

• NEW STRs/B&Bs established after February 7, 2023, must obtain a Special Use Permit (SUP)
• All STRs/B&Bs require an annual Lodging License regardless of establishment date
• Properties must be located in areas where STRs/B&Bs are permitted under zoning regulations
• Existing properties operating legally before February 7, 2023 may qualify for temporary permits under Chapter 100

How to Start a Short-Term Rental Business in Carrollton

Step 1: Determine Property Eligibility

Before proceeding, verify that:

• Your property is located in a zoning district that permits STRs/B&Bs with a Special Use Permit
• You can document legal operation if the property was established before February 7, 2023
• You understand the distinction between STR and B&B classifications

Step 2: Obtain Required Permits and Licenses

For New Properties (Post-February 7, 2023):

1. Special Use Permit (SUP) - Contact Planning Department at (972) 466-3040
2. Lodging License - Apply annually through Environmental Services
3. Hotel Occupancy Tax Registration - Required for tax collection and remittance

For Existing Properties (Pre-February 7, 2023):

• Documentation review required to verify legal operation status
• Lodging License application still required
• Hotel Occupancy Tax registration still required

Step 3: Secure Required Insurance

Obtain liability insurance providing coverage up to $1,000,000 per occurrence. A certificate of insurance must be filed with Environmental Services.

Step 4: Set Up Tax Collection and Remittance Systems

• Collect 7% Hotel Occupancy Tax from guests
• Remit taxes quarterly to the City (due by the last day of the month following each quarter)
• Register for Texas Taxpayer Number through Texas Comptroller's office

Required Documents, Permits, Licenses, and Guidelines

Permits and Licenses

1. Special Use Permit (SUP)

   • Required for all new STRs/B&Bs after February 7, 2023
   • Issued through Planning Department
   • Must be obtained before lodging license application

2. Lodging License

   • Required annually for ALL STRs/B&Bs
   • Issued to specific owner and location
   • Each location must be licensed individually
   • New license required if ownership changes
   • Application fee payable online (no checks accepted)

3. Hotel Occupancy Tax Registration

   • Texas Taxpayer Number required for tax reporting
   • Contact Texas Comptroller's office to obtain
   • Hotel Occupancy Tax help line: 800-252-1385

Insurance Requirements

• Host protection or liability insurance: Minimum $1,000,000 per occurrence
• Certificate of insurance must be filed with Environmental Services
• Notice of cancellation must be provided within 30 days

Compliance Requirements

• Adherence to Chapter 97 of Carrollton Code of Ordinances
• Compliance with Special Use Permit stipulations
• Adherence to Comprehensive Zoning Ordinance requirements
• Compliance with Chapter 96 occupancy load regulations

Specific Regulations for Short-Term Rentals

Definitions and Classifications

Short-Term Rental (STR):

• Residential premise used for lodging accommodations
• Stays less than 30 days
• NOT permanently occupied by property owners listed on county appraisal records

Bed & Breakfast (B&B):

• Residential premise used for lodging accommodations
• Stays less than 30 days
• IS permanently occupied by property owners listed on county appraisal records

Occupancy and Safety Regulations

• Occupancy Limits: Determined by Chapter 96, Section 96.06 based on:
  • Finished area of the home
  • Square footage of bedrooms
  • Number of unrelated individuals
• Safety Compliance: Must meet all applicable building and safety codes
• Insurance: $1 million minimum liability coverage required

Tax Obligations

• Hotel Occupancy Tax: 7% of gross income
• Payment Schedule: Quarterly remittance due by last day of month following each quarter
• State Requirements: Texas state hotel occupancy tax obligations apply
• Registration: Must use Texas Taxpayer Number for reporting

Current Restrictions (Effective May 6, 2025)

• One-year interim prohibition on approving new STR/B&B applications
• New Special Use Permits for STR/B&B uses are suspended during this period
• Only certain existing properties may qualify for temporary permits under Chapter 100

Zoning and Location Requirements

• STRs/B&Bs must be located in zoning districts where permitted with Special Use Permit
• Refer to Comprehensive Zoning Ordinance Article V for permitted locations
• Article XXI provides Special Use Permit standards and requirements

Contact Information for Local Authorities

Environmental Services (Lodging Licenses and STR Oversight)

Address: 1945 E Jackson Road, Carrollton TX 75006
Phone: (972) 466-3060
Email: envservices@cityofcarrollton.com
Hours: Monday-Thursday: 7:30 AM – 5:30 PM; Friday: 7:30 AM – 11:30 AM

Responsibilities:

• Lodging License applications and renewals
• STR/B&B compliance monitoring
• Insurance certificate filing
• General STR inquiries and requirements

Planning Department (Special Use Permits)

Phone: (972) 466-3040
Website: Planning & Zoning Department

Responsibilities:

• Special Use Permit applications
• Zoning compliance verification
• SUP process guidance and requirements

Texas Comptroller's Office (Hotel Occupancy Tax)

Phone: 800-252-1385 (toll-free)
Website: Hotel Occupancy Tax Information

Responsibilities:

• Texas Taxpayer Number registration
• State hotel occupancy tax guidance
• Tax collection and remittance requirements

Code Enforcement (Violations and Complaints)

Phone: (972) 466-3060
Online Complaint Portal: STR/B&B Complaints

Links to Source Pages

Official City Resources

• Carrollton STR and B&B Licensing Page
• Chapter 97 - Hotel, Short Term Rental, Bed & Breakfast Ordinances
• Chapter 96 - Occupancy Load Regulations
• Comprehensive Zoning Ordinance
• Chapter 100 - Short-Term Rental Temporary Permit
• Lodging License Application Information

State Resources

• Texas Comptroller Hotel Occupancy Tax FAQ
• Texas Comptroller Airbnb Hotel Occupancy Tax FAQ

Service Portals

• CityServe Online Portal
• Lodging License Online Application

Important Note: Given the current interim prohibition on new STR applications (effective May 6, 2025), prospective operators should contact Environmental Services at (972) 466-3060 to understand eligibility requirements for temporary permits under Chapter 100 and to monitor when the prohibition period ends. This regulatory landscape requires careful compliance management and ongoing attention to city ordinance updates.