August 10, 2021

How the City of Dallas, TX improved its short-term rental (STR) compliance rate from 3% to 80%

Posted by Lexi Whalen

The Need

In early 2019, Dallas was attempting to manage short-term rental registration and lodging tax collection internally but the task proved to be overwhelming. At the time, Dallas had over 1,300 STR properties advertised on 19,000 STR listings across 30+ platforms, but the City only had 30 registered STR properties. The City was particularly challenged identifying personal contact information for STR listings in residential towers, which constituted the bulk of their STR listings. Without this information, the City had no way of notifying or registering STR properties. Without an STR compliance management system in place and a large, well-trained team to manage that system, Dallas had been missing tens of millions of dollars in annual lodging tax revenue, P&I, and STR registration fees for years.

Population: 1,347,120

STR Ads: ~19,000

STR Properties: +1,300

Initial Compliance Rate: <3%

Results

Current Compliance Rate: 80.5%

Annual Lodging Tax Revenue: From $1.9M to $51M

The GovOS Solution

In November 2019, the City of Dallas chose GovOS (previously LODGINGRevs) as their STR compliance management vendor in a competitive bidding process. GovOS STR provides Dallas with Compliance Identification & Monitoring, Permitting/Registration, and Tax Collection.

Additionally, we helped Dallas execute a strategy that would slow the growth of their compliance rate but drastically increase their revenue. Dallas’s primary goal was to collect two years of back taxes from STRs. To do this, GovOS STR used its Listing Tracker and Evidence Capture tools to ensure that even when an STR listing is not actively advertised, the property would remain in a non-compliant status until it had reported both current and retro-active lodging taxes to the city.

In collaboration with the City of Dallas, we developed an intensive non-compliance notification system that exponentially increased the compliance rate and decreased the average time it took for owners to register STR properties. Non-compliant properties now receive three notification letters (instead of one) in a month and, once registered and compliant, they receive an additional notification reminding them to remit their lodging taxes.

Our Results

In only 19 months, GovOS STR has increased the number of compliant properties in Dallas from 30 to over 1,300, a 4,200% increase. Dallas’s annual lodging tax revenue has increased to $51 million. The City is using the increased funds to promote tourism in Dallas and for the construction costs of the Kay Bailey Hutchison Convention Center.

*GovOS STR has helped Dallas boost their compliance rate to 80%. This rate is less than what our team typically produces in this timeframe, but this was expected when placing a higher priority on collecting back taxes than bringing all properties into compliance.

About GovOS

In 2021, GovOS acquired MUNIRevs | LODGINGRevs – a leading provider of tax, licensing and compliance tools for local government. The same innovative payment orchestration engine that powered this project for the City of Dallas is now at the core of the GovOS software suites, alongside other solutions that improve government engagement at every step of a digital transformation journey.

For more information, visit GovOs acquires MUNIRevs | LODGINGRevs.