Key Takeaways
- El Paso is moving to implement a new local tax on short-term rental properties
- The move will generate approximately $3.5 million annually to support tourism-related investments
- Enforcement will begin within 90 to 180 days to allow time for implementation
The sixth-largest city in Texas wants to begin taxing short-term rentals.
According to the “El Paso Times,” the El Paso City Council approved a resolution to start collecting Hotel Occupancy Taxes (HOT) on short-term rentals during its June 9 meeting.
It’s expected to generate approximately $3.5 million annually to support tourism-related investments in El Paso.
The taxes will be enforced within 90 to 180 days to allow time for implementation.
“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,” city Rep. Art Fierro said, per the outlet.
“Over the last ten years, the city of El Paso has been the only large municipality in Texas that does not collect hotel occupancy tax on short term rentals,” city Rep. Chris Canales added. “The action the City Council approved today will ensure that El Paso has the resources we need to continue to improve the experiences of visitors and residents alike.”
The move will put El Paso closer in line with other Texas cities that already require Airbnb, Vrbo and other short-term rental operators to collect or pay hotel occupancy taxes.
For hosts, this is not just an El Paso story.
Related: Caribbean Hotel and Tourism Association challenging Airbnb taxes and Booking.com commissions
Cities across the country are looking harder at short-term rentals as a source of tourism revenue.
In many markets, the argument is simple. Hotels pay lodging taxes. STRs bring in overnight visitors too. Local governments increasingly want both sides of the lodging market to pay up.
El Paso had already been studying short-term rental rules for years, including possible hotel occupancy tax requirements, permit fees and platform agreements. Now, the city appears ready to move from discussion to collection.
What the El Paso STR tax means for operators
For hosts using Airbnb or VRBO for their bookings, platform-level tax remittance may handle some of the new obligation — but direct-booking operators will face a more complicated compliance picture.
That added cost layer matters in a market where the median El Paso STR host earns roughly $18,000 per year, leaving limited margin to absorb new municipal fees.
Although this isn’t the greatest news for El Paso STR operators, Philadelphia just gave its hosts some good news to stew on.
Philadelphia City Council stripped STR and hotel tax hikes from the mayor’s fiscal year 2027 budget, sparing operators a new financial burden.
