Understanding San Antonio's HOT Audit & Review Process

For many short-term rental operators, receiving a notice from the City of San Antonio Finance Department can raise immediate questions: Why was my property selected? What records do I need? What happens during the review?

To help answer those questions, STRASA has been working with Finance Department staff to better understand the Hotel Occupancy Tax (HOT) review process from both the City's and the operator's perspective. The result is a clearer understanding of what hosts can expect and how they can prepare.

What Is a HOT Review?

The City periodically conducts reviews of Hotel Occupancy Tax filings to verify that taxes have been reported accurately and that supporting records are available when needed.

According to Finance Department staff, reviews are selected as part of an ongoing compliance program and are not necessarily triggered by suspected wrongdoing. The goal is to ensure that lodging providers understand and comply with local tax requirements.

Most Reviews Start Small

One common misconception is that a review means the City will immediately examine years of records across every property an operator owns.

In reality, reviews typically begin with a single property identified by address or STR permit number and a limited sample period, often three months. Reviewers compare the HOT returns filed for that period against the supporting reservation and financial records.

If the documentation supports the amounts reported, the process is often straightforward.

Reviews Can Often Be Completed Electronically

Many operators are relieved to learn that reviews do not necessarily require an in-person visit.

The Finance Department frequently conducts reviews electronically, allowing operators to submit records digitally. The review notice will identify the property, sample months, review date, and documentation deadline.

If the scheduled date creates a conflict, operators should contact the City as soon as possible. Finance staff have indicated that review schedules can often be adjusted when necessary.

What Records Should Hosts Keep?

Good recordkeeping remains the most important part of HOT compliance.

Operators should maintain records that support their HOT filings, including:

• Reservation records;

• Airbnb and VRBO earnings reports;

• Documentation supporting tax exemptions;

• Copies of filed HOT returns; and

• Supporting financial records.

The City may request information such as check-in and check-out dates, nightly rates, cleaning fees, pet fees, and exemption documentation during a review.

Importantly, records should not be discarded simply because a property is sold or an operator exits the short-term rental business.

The Four-Year Rule

STRASA recommends that operators retain HOT-related records for at least four years from the date the tax return was filed.

That record retention period applies even if:

• The property is sold;

• The STR permit expires;

• The operator stops hosting; or

• The property is converted to another use.

  
  

A future review may involve prior reporting periods, and operators remain responsible for maintaining records that support previously filed returns.

A Good Reminder for Every Host

Whether you've been hosting for ten years or ten months, a HOT review is a good reminder that compliance starts with organization.

Maintaining accurate reservation records, saving platform reports, keeping copies of filed returns, and documenting exemptions can make the review process significantly easier if your property is selected.

STRASA appreciates the Finance Department's willingness to engage with the host community and answer questions about the review process. We will continue working with City staff to share information that helps operators understand their responsibilities and remain compliant with local requirements.

For additional information, review STRASA's HOT Review & Audit Information Sheet and other compliance resources available on our website here.