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Hotel Tax Cash Could Be Used To Expand Convention Center

Jorge Sanhueza-Lyon
A task force has recommended that the city use money collected through the hotel occupancy tax to expand the Austin Convention Center.

Expand the Austin Convention Center, a city task force recommended to City Council on Tuesday.  

The Visitor Impact Task Force was created last year to explore how to use the growing pot of money collected from hotels through what's called the hotel occupancy tax. The charge is tacked onto hotel bills, and the money goes toward efforts that promote tourism, the hotel industry and the convention and visitors bureau. 

James Russell, the chairman of the task force, said an expansion is key to increasing overall tax revenue.

“The only way we can raise our hotel tax rate is by expanding the convention center,” he said.

The task force also recommended using money from the fund for the arts, music and historic preservation efforts.

Council Member Ora Houston, whose district falls mostly outside of downtown, wanted to know if the proposed uses would be limited to one part of town or if the money could be used across the city.

Russell said one of the group’s overarching recommendations is to create a more equitable process.

“A lot of folks don’t know that these funds exist and that they can apply for them year after year,” he said. “That’s a problem.”

After Russell’s presentation, council members parsed through the legal questions of which new uses were allowed under state law. Mayor Steve Adler said it’s an imperfect system.

“You know, perhaps in a perfect world, we would have drafted the allowance for the use of the HOT tax money differently than the Legislature did,” he said. “But for whatever reason, the Legislature drafted the use of the hotel money very narrowly.”

While there has been plenty of discussion about how much Austin’s hotel tax revenue has been growing, Russell said he believes the city could be collecting even more. He wants Austin to adopt a similar taxing model to the state when it comes to taxing short-term rentals, like through HomeAway or AirBnb.

AirBnb, for example, collects taxes on short-term rentals on the state’s behalf and turns over a lump sum. Russell said he thinks that model could bring in more money for the city.

Syeda Hasan is a senior editor at KUT. Got a tip? Email her at Follow her on Twitter @syedareports.