El Paso city leaders are scheduled to receive an update Tuesday on a hotel occupancy tax audit that originally identified more than $1.1 million in uncollected taxes but has since been revised downward after further review.
Audit reviewed 20 hotels, most showed deficiencies
The audit, completed in April by the city’s audit department, examined tax reporting at 20 hotels across El Paso. Initial findings indicated that 19 of the 20 properties had some form of deficiency — including underreported revenue, invalid exemptions and unreported fees — resulting in an original total of roughly $1.13 million in uncollected hotel occupancy taxes.
Seven of the audited hotels disputed the initial findings and requested the city to re-examine the calculations. Following that review, the amount at issue was reduced by more than $531,000, leaving a revised total of about $600,000. The revised figure does not include penalties or interest, according to a presentation expected to be discussed at the City Council meeting.
“Sometimes it's an educational thing. Sometimes it's the hotel is not doing well. And so they're just not remitting their hotel occupancy tax,” said City Chief Financial Officer and Deputy City Manager Robert Cortinas in earlier comments to local media.
What the review means for hotels and the city
The Office of the Comptroller oversees collection of the hotel occupancy tax and follows up with properties identified in audits. Hotels flagged in the audit are given opportunities to provide documentation or appeal findings if they believe the audit calculations are incorrect.
City officials have noted that some reporting errors stem from misunderstanding the tax rules or timelines, while other cases may reflect financial difficulties at the property. The audit process included an opportunity for hotels to challenge the determinations, and that challenge process directly led to the sizable reduction in the amount the audit initially listed as uncollected.
- Scope: 20 hotels audited
- Initial finding: about $1.13 million uncollected
- After review: reduced by > $531,000 to roughly $600,000
- Note: revised total excludes penalties and interest
Financial and governmental implications
Hotel occupancy tax dollars fund tourism-related projects and services, and discrepancies in collection can affect budgets and programming supported by the tax. While the city’s audit process seeks to ensure compliance and correct remittance, the revision underscores the role of appeals and documentation in finalizing audit outcomes.
The upcoming council discussion will include the audit presentation and is expected to outline next steps for collection efforts and any additional review of reporting practices. The city’s approach combines oversight by the Office of the Comptroller with opportunities for education and remediation for hotels that struggle to comply.
| Audit item | Amount |
|---|---|
| Initial uncollected taxes | $1,130,000 (approx.) |
| Reduction after hotel challenges | $531,000+ |
| Revised total (excl. penalties/interest) | ~$600,000 |
The presentation to be discussed at the City Council meeting is listed in the council materials as "09-10-2026 FOAC Item 7 - HOT Review (Round 10) Update." City officials have emphasized that audits serve both enforcement and educational purposes, helping ensure hotels understand reporting requirements and remittance timelines.
As the council considers the update, the outcome may affect how the city pursues collection, whether additional audits are scheduled, and how the city supports hotels in complying with reporting rules.
