Tourism industry lawyer briefs Austin commission on strict rules for hotel-occupancy tax and how TPID funding works

Scott Joslav, president and senior counsel for the Texas Hotel and Lodging Association, told the Austin Tourism Commission on Jan. 14 that Texas law imposes a strict two-part test on how cities may spend local hotel-occupancy tax money.

"Every expenditure must directly promote tourism and the convention and hotel industry," Joslav said, describing the requirement in chapter 3 51 of the tax code as mandatory rather than aspirational. That requirement, he said, means the city must show that, but for the funded improvement or program, the visitor would not likely have come as a tourist or a hotel guest.

The second part of the test is categorical: expenditures must fall into one of the statute27s allowable categories. Joslav ran through the seven categories that apply to Austin, including convention centers (with a primary-usage test and city-ownership or city-management requirement), registration and convention-delegate services, advertising and promotion (the only mandatory category), promotion of the arts, historical restoration and preservation, transportation/shuttles that move tourists to…