El Paso short-term rental operators required to collect lodging taxes under new law
- Aug 25, 2026 | Jennifer Sokolowsky
Short-term rentals (STRs) in El Paso, Texas, will be subject to lodging tax under a new ordinance approved by the City Council. The tax is paid by STR guests, but STR operators will collect the tax from guests and remit it to the city.
Key takeaways
- El Paso is introducing a local lodging tax for short-term rentals. The city will begin collecting hotel occupancy tax (HOT) on STR stays no earlier than 90 days and no later than 180 days after the ordinance’s June 9 adoption.
- STR operators will be responsible for local tax compliance. Operators must collect the city HOT from guests and file quarterly reports with the city.
- Texas STRs may face both state and local lodging tax obligations. Operators must comply with Texas state HOT requirements.
Under the law, the city will start collecting HOT no earlier than 90 days and no later than 180 days after its June 9 adoption. STR operators will be responsible for filing quarterly reports with the city declaring receipts collected and occupancy taxes paid.
The new tax is expected to generate $3.5 million in tax revenue every year. According to state law, those funds may only be used to pay for tourism-related expenses, including:
- Promoting tourism
- Maintaining, improving, and expanding the convention center campus
- Keeping up and providing debt service for Southwest University Park
- Funding local artists and arts and cultural organizations and events
“We recognize that many short-term rental operators are local residents and small
business owners who have invested in their properties and are working to generate
additional income. At the same time, this gives the city an opportunity to capture visitor-generated revenue that can be reinvested directly into tourism, arts, events, and infrastructure — helping strengthen our economy while reducing pressure on all local taxpayers,” City Representative Art Fierro said.
El Paso is the only large Texas city that hasn’t collected HOT on STRs in the past 10 years. Cities that already levy lodging taxes on STRs include Houston, Austin, Galveston, and South Padre Island.
El Paso doesn’t have a specific STR ordinance, but El Paso STR operators and guests are required to observe property regulations, including nuisance laws. The city recently changed the zoning code to define STRs as “any residential use, including a single-family home, duplex, an accessory structure, or a unit in an apartment/multifamily residential building, mixed use residential building, or condominium building, or any portion thereof, used for lodging accommodations to occupants for a period of less than 30 consecutive days.” The change recognizes STRs as an officially allowed use.
Short-term rental operators also required to collect state lodging tax
All Texas STRs are also subject to state hotel occupancy tax (HOT). Operators must register with the Texas Comptroller’s office, collect taxes, and file state occupancy tax returns.
Airbnb and Vrbo are required to collect the state portion of the tax for all bookings on their sites. Operators don’t need to register with the state or file state HOT returns if an STR marketplace collects all state lodging taxes for their properties.
Currently, STR marketplaces don’t collect El Paso city HOT for their listings, so operators are responsible for local lodging tax compliance.
Get help with Texas lodging taxes
Avalara helps simplify tax and compliance for the hospitality industry through automation. With Avalara MyLodgeTax, STR owners and property managers can register with tax authorities, calculate lodging taxes, prepare and file returns, and remit payment. Avalara is trusted by 200,000+ direct and indirect customers in 75+ countries.
For more on lodging taxes in Texas, see our state vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.
FAQ
When will El Paso begin collecting lodging tax on short-term rentals?
El Paso will begin collecting hotel occupancy tax on STRs no earlier than 90 days and no later than 180 days after the ordinance was adopted on June 9, 2026.
Who is responsible for collecting El Paso’s local lodging tax?
STR operators are responsible for collecting the city HOT from guests and remitting it to El Paso. STR marketplaces Airbnb and Vrbo currently don’t collect it for their listings.
Do El Paso short-term rentals also have to collect Texas state lodging tax?
Yes. Texas STRs are subject to the state’s hotel occupancy tax. Operators must register with the Texas Comptroller, collect the tax, and file state returns unless a marketplace such as Airbnb or Vrbo collects all applicable state lodging taxes for their bookings.
