Transient Occupancy Tax Audit Services

The Vendor is required to provide consultants with demonstrated experience in auditing transient occupancy tax (TOT) returns and assessing compliance with local municipal code requirements.
- Hotels, motels and short-term rental (STR) operators are required to register with the City and file Transient Occupancy Tax (TOT) returns.
- The city has one benefit assessment district, which funds collective tourism marketing efforts and is paid by all hotels, motels, and STRS within city limits as a percentage of room rental revenue.
- In year one, the city will identify ten (10) hotels for audit and ten (10) short term rentals. 
- In subsequent years, between eight (8) and twelve (12) hotels, and ten (10) short term rentals will be selected annually for review.
- Provide for conducting annual tot audits for the most recent three fiscal years. For example, during the first year of engagement, audits will cover fiscal years 2022, 2023, and 2024, with each fiscal year ending on June 30.
- Assess internal control procedures
• Evaluate and report on the hotel/motel and STRS internal controls related to the collection and reporting of transient occupancy taxes, including:
• Accounting and reporting of transient rent receipts to the city
• Procedures for identifying transient vs. non-transient guests
• Documentation and reporting of taxable and non-taxable room revenues
• Documentation and reporting of exemptions, including complimentary rooms
- Verify accuracy and timeliness of filed returns
• Hotel/motels- confirm the accuracy and submission timeliness of tot returns for the three-year audit period.
• STRS- confirm the accuracy and submission timeliness of tot returns for a one-year period. If discrepancies are found then, confirm the accuracy and submission timeliness of the three-year audit period.
- Reconcile reported receipts
• Trace reported transient rent receipts from the tot returns to the accounting records, ensuring compliance with city ordinances.
- Verify occupancy reporting
• Match the number of occupied room nights reported on tot returns to the hotel/motel and STRS internal occupancy records and validate compliance with city requirements.
- Sample rental transactions
• Select a sample of rental transactions from the audit period and:
1. Verify tax computations
2. Reconcile rental revenues and tot collected with the hotel/motel and short-term rental’s books and records
- Review exemption claims
• Audit, on a sample basis, supporting documentation for tot exemptions claimed during each of the three fiscal years.
• If discrepancies are found, perform additional procedures to determine and materiality extent of the issue.
- Contract Period/Term: 3 years
- Questions/Inquires Deadline: July 14, 2025