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Brewster County officials select company to help with lodging tax enforcement

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Hannah Gentiles for Marfa Public Radio
The desert landscape of Terlingua, Texas, which has seen a dramatic rise in AirBNBs and other short-term rentals in recent years.

The county is moving forward with a plan to hire a company to identify short-term rental owners who aren’t paying required hotel occupancy taxes – often called “HOT” taxes – an ongoing problem in the Big Bend region’s booming tourism industry.

After months of discussions about some short-term rental owners failing to pay required lodging-related taxes, Brewster County officials on Tuesday voted to hire an Austin-based company to help them go after the unpaid taxes.

The firm, GovOS, was among two short-term rental analytics and compliance companies that submitted proposals at the request of the county to track lodging operations in the area and identify who is and isn’t paying the taxes.

The company itself won’t be tasked with actually collecting unpaid taxes – that role still falls to the county government – but part of the firm’s job will be helping the county correspond with rental owners about the issue.

The skyrocketing number of AirBNBs and other short-term rentals in the Terlingua area has come alongside growing concerns about some rental owners skirting the rules on lodging taxes.

Local officials have faced increasing calls to better enforce the lodging taxes, but the county has struggled with a lack of resources to even keep tabs on all the rentals that are on the market in the first place.

“Every day there are more short-term rentals coming online, and even though we are having more people comply with the HOT tax regulations, they are not keeping up with the new ones,” said Sara Allen Colando, the county commissioner who represents the Terlingua area.

Officials haven’t yet finalized a contract with GovOS, but the firm’s hiring will be a tangible step forward on the issue after many meetings and conversations about the best path forward.

During Tuesday’s commissioners court meeting, Brewster County Judge Greg Henington said the company will “take all the data that’s on the internet” and create a list of rentals in the county that are outside Alpine city limits.

“Hopefully from there, we can track that back to who’s paying the taxes and who’s not,” he said.

County Treasurer Julie Morton said it would likely take the firm 3-4 months to set up its services.

As outlined in the company’s proposal, GovOS will maintain an online database that the county can use to track short-term rental activity in the area, including compliance with local tax rules and other regulations.

The county will also use the firm as a “facilitator” to send notices to non-compliant rental owners, Colando said, and rental owners in turn will be able to pay HOT taxes through an online portal for the first time.

“They’ll be able to register for an account, so that we can know where they are and we can review their applications and they can pay their taxes online,” she said. “It won’t just be for AirBNB hosts, the goal is also to make this available for the more traditional hotel operators who have been running hotels in the area for decades.”

Outside the issue of HOT tax compliance, there have been calls from some in the community for changes in what the revenue from those taxes can be used for.

In Texas, state law generally requires that lodging tax revenue be used to promote more tourism to an area, though the money can go to things like arts programs or historic preservation that can simultaneously benefit the tourism industry.

Tourism trade groups like the Texas Hotel and Lodging Association have historically lobbied against proposals that would allow the money to be used for more commonplace tax uses like road improvements, housing assistance or public needs, though state lawmakers have approved some exemptions to the rules in certain cities.

Lawmakers could take a closer look at the issue in the current legislative session. As the Big Bend Sentinel has reported, a bill filed in the Texas House would allow local governments to use HOT tax revenue for things like roads and water infrastructure projects.

Travis Bubenik is All Things Considered Host and Big Bend Reporter at Marfa Public Radio.