Hotels required to report hotel occupancy tax, or H.O.T., are subject to audit by the Internal Audit Division of Houston First Corporation. A hotel selected for audit will receive an engagement letter with a request for information to begin the audit process.

What Could Prompt An Audit?

  • Delinquent payments or missed reports
  • High percentage of exemptions relative to reported gross receipts
  • High gross receipts
  • Random selection
  • Special requests/tips including a request for a Certificate of No Tax Due

Recordkeeping Requirements

Individuals and entities required to report and remit the tax must maintain the following records in a written or electronic format for at least four years from the date of the transaction.

  • For each room rental, the check-in/check-out dates, the amount paid (including state and local hotel occupancy taxes collected) and the method of payment
  • Supporting documentation and certificates of exemption for guests who are exempt from tax
  • Banking records that identify all room rental revenue collected
  • Credit card records reflecting payments of room rentals

For room rentals paid by cash, every person required to collect the tax must issue a customer an electronic or handwritten receipt that provides the date and time of the rental transaction, the room number and the charges for room rental.

For handwritten receipts, every person required to collect the tax must issue the receipts in sequential, numeric order, retain a duplicate copy of the receipts, and mark spoiled receipts as void and retain such receipts as evidence of spoilage.


NOTE: The City of Houston does not recognize State of Texas exemptions for educational, religious or charitable organizations.

For more information on exemptions and recordkeeping requirements, contact hoteltax@houstonfirst.com.