OCA Audit Reports

Issued: April 2008

The City collects a hotel occupancy tax of nine percent on overnight stays costing more than $2 in hotels, motels, tourist homes, tourist courts, lodging houses, inns, rooming houses, and bed and breakfasts. As of fiscal year (FY) 2007, there were 175 establishments collecting the tax within Austin’s city limits. Hotel occupancy taxes have been steadily increasing over the past few years and in FY 2007 yielded over $40 million in revenue. The recipients of these revenues include the Convention Center Department, the Venue Project, the Austin Convention and Visitors Bureau, and the Cultural Arts Program.

The Office of the City Auditor (OCA) conducted 75 hotel audits between FY 2005 and FY 2007. These audits were conducted in three different phases. Each of the three phases yielded significant revenue to the City of Austin.

When we conducted our follow-up work, many hotels still had compliance issues that resulted in deficiencies; however, system improvements by hotels resulted in lower deficiencies on average than in our original audits.

While two hotels reviewed in follow-up were in full compliance with hotel tax requirements, nine hotels had recurring compliance issues resulting in at least $212,000 due the City.

Though many hotels were not fully compliant during our follow-up audits, most hotels had improved their systems for supporting hotel tax exemptions which resulted in lower deficiencies than in our original audits.

Download the entire text of our Hotel Occupancy Tax Follow-up Audit in Adobe Acrobat. You will need Adobe's Acrobat Reader to view these files. Or request a hard copy of this audit report, No. AU08111, by submitting this audit report request form.

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