HOT tax ordinance showing positive results

Special to the PRESS

The City of South Padre Island’s Hotel Occupancy Tax (HOT), Ordinance 15-03 is on pace to exceed revenue projections predicted when it was passed in March. The ordinance went into effect on June 1st and since being implemented on June 1st, 160 property owners have registered with the city. As a result of their registration, the city has collected over $70,000 of previously uncollected taxes. Councilman Dennis Stahl, stated at the November 18th City Council meeting, “The city has made good progress towards reaching compliance and leveling the playing field between payers and non-payers of HOT. We hope to reach our goal in the next year.”

The City, partnering with UTRGV, has continually monitored short-term rental advertising through web ads, travel services and online traffic. MuniServices, a tax collection and auditing service, provided data identifying 108 properties had not been complying with payment of HOT for short-term rentals. MuniServices registry of properties also listed over 50 properties filing no reported HOT collections to date. An additional ten (10) used false or incorrect MuniServices identification numbers used during registration with the city with approximately 100 to have shown their failure to file a single report.

Property owners using invalid MuniServices identification numbers will receive notice to provide accurate and valid registration numbers for both MuniServices and the State of Texas. Violators with accurate identification numbers but no filed reports will be notified of the requirement of monthly reports to be filed. Property owners reporting zero HOT revenue during the June, July and August will be reminded that they are required to report short-term rental revenues and to collect and remit HOT. The City will continue to monitor property owners’ short-term rental advertising as well as registration compliance in accordance with Ordinance 15-03. The City will also continue to audit those already registered to ensure monthly payment of the required Hotel Occupancy Taxes.

Any violation of Ordinance 15-03 may be punished by a fine not to exceed $500 for each offense or for each day of noncompliance.

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