Chapel Hill, NC Hotels & Lodging: Transient Occupancy Tax (2026)
Key Facts
- Tax rate
- 3 percent of gross lodging receipts
- Filing deadline
- 15th of each month following collection
- Collection fee
- Operator may keep 1 percent
- Late filing penalty
- $10 per day under Sec. 19-13
- Nonpayment penalty
- Additional 5 percent per month, Sec. 19-14
- Willful evasion penalty
- Up to $1,000 fine or 6 months jail
- Revenue set-aside
- At least 10 percent to visitor/cultural funding
Summary
The Chapel Hill Town Council levies a 3 percent room occupancy tax on gross receipts from renting hotel, motel, and similar short-term lodging under Code of Ordinances Sec. 19-11. Operators collect the tax at checkout, remit it monthly to the town revenue collector, and may keep 1 percent as a collection fee. Nonprofit charitable, educational, or religious lodging is exempt.
The Town of Chapel Hill hereby imposes and levies a room occupancy tax of three (3) percent of the gross receipts of any person, firm, corporation, or association derived from the rental of any room lodging or similar accommodation subject to the sales tax levied by the State of North Carolina under G.S. 105-164.4(3). This tax does not apply to accommodations furnished by nonprofit charitable, educational, benevolent, or religious organizations when furnished in furtherance of their nonprofit purpose. This tax is in addition to any state or local sales tax. ... Any person, firm, corporation, or association which fails or refuses to file the return and remit the taxes required by this article shall pay a penalty of ten dollars ($10.00) for each day's omission.
Full Breakdown
Section 19-11 of the Chapel Hill Code of Ordinances imposes a room occupancy tax of three percent on gross receipts derived from renting any room, lodging, or similar accommodation that is also subject to North Carolina's state sales tax under G.S. 105-164.4(3), which reaches hotels, motels, and short-term rentals booked through the town. The exemption applies only to accommodations furnished by nonprofit charitable, educational, benevolent, or religious organizations in furtherance of their nonprofit purpose; the tax stacks on top of state and local sales tax rather than replacing it.
Under Sec. 19-12, every operator must collect the tax as a separate line item on the sales record and hold it in trust for the town, then file a monthly return with the town revenue collection office by the fifteenth of the following month. Operators who collect the tax may deduct one percent of the amount collected as reimbursement for their administrative costs before remitting the balance. Sec. 19-16 directs the council to set the annual allocation of the revenue during budgeting, with at least ten percent earmarked for visitor information services or support for cultural events.
Sec. 19-17 lets a hotel, motel, or inn that houses the same guest for ninety consecutive days apply to the revenue collector for a deduction, or a refund if no tax is currently due, once that stay becomes exempt from state sales tax as a long-term rental.
Violations & Fines
Failing or refusing to file the monthly return or remit the tax due draws a ten-dollar penalty for each day of the omission under Sec. 19-13. If the return or payment is still late after thirty days, Sec. 19-14 adds a further five percent of the unpaid tax as a penalty, plus another five percent for every additional month or fraction it stays unpaid. Sec. 19-15 makes willful evasion a misdemeanor punishable by a fine of up to one thousand dollars, up to six months imprisonment, or both.
Frequently Asked Questions
Does Chapel Hill's occupancy tax apply to Airbnb-style short-term rentals?
What happens if a hotel operator misses the monthly filing deadline?
Can a guest staying long-term get the occupancy tax refunded?
Sources & Official References
Other rules in Chapel Hill
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