LicensedRental

Palo Pinto County, Texas

Possum Kingdom Lake and unincorporated Palo Pinto County, TX vacation rental requirements

Around Possum Kingdom Lake there’s no county rental permit, but Palo Pinto County reported a 7% county hotel tax that you file yourself, on top of the 6% state tax Airbnb collects. Deed restrictions and HOA rules are the main limits.

Checked against official sources November 8, 2026

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Market
About 170 Airbnb listings
Listed under Graford.Source
Rental permit
None
Texas counties can’t zone.Source
Hotel taxes
6% state + 7% county
Airbnb collects the state tax only.Source

A Graford mailing address doesn’t mean you’re inside Graford city limits. Check your property’s tax record to see which cities and districts tax it.

Your licensing checklist

In order: the state, the county, then the town.

State of Texas

  1. Know who pays the hotel tax

    Airbnb collects and pays the 6% state hotel tax on its bookings. If guests pay you directly or through a site that doesn’t collect, register with the Comptroller and file the state tax yourself.Source

    Texas hotel occupancy tax →

  2. Register for local hotel tax

    Your city (and in some places your county) charges its own hotel tax, filed with that city or county, not the state. Airbnb pays it only in the places on its list; everywhere else you register and file it yourself, even for Airbnb bookings.Source

  3. Check your city’s rules

    Many Texas cities require a short-term rental permit or registration, and some require an inspection, a local contact, or posted rules. Outside city limits there’s usually no permit, but deed restrictions and HOA rules often limit rentals. Pick your area for the local rules.Source

Palo Pinto County, Texas

  1. Inside or outside city limits?

    Most Possum Kingdom homes are outside any city, so there’s no rental permit, but subdivision deed restrictions and HOA rules apply. Inside Mineral Wells, Graford, Gordon, or Strawn, ask the city.Source

  2. Hotel taxes on each stay

    Stays of 29 nights or less owe the 6% state hotel tax, which Airbnb collects on its bookings. If guests pay you directly, file it with the Texas Comptroller. Palo Pinto County reported a 7% county hotel tax to the Comptroller; Airbnb doesn’t collect it, so ask the county how to register and file. Graford reports a 2% city hotel tax, Gordon and Mineral Wells 7%.Source

Unincorporated Palo Pinto County

  1. Hotel taxes on each stay

    Stays of 29 nights or less owe the 6% state hotel tax, which Airbnb collects on its bookings. If guests pay you directly, file it with the Texas Comptroller. Palo Pinto County reported a 7% county hotel tax; Airbnb doesn’t collect it, so ask the county how to register and file. If your home is inside Graford city limits, Graford reports a 2% city tax too.Source

  2. Read your deed restrictions

    Many Possum Kingdom subdivisions and gated communities have their own rental rules. Read your deed restrictions and HOA rules before you buy or list.

Sources

A plain-language summary to help you prepare, not legal advice. Rules and fees change; confirm with the office before you apply. Spot something out of date? Email hello@licensedrental.com.