Alpine city attorney advises commissioners court on delinquent HOT tax collection

ALPINE — At last week’s meeting of the Brewster County Commissioners Court, Alpine’s city attorney, Rod Ponton, advised the court about potential pitfalls in their quest to collect delinquent hotel occupancy (HOT) taxes. The issue has become a flashpoint in Terlingua, where one of the region’s largest vacation rental companies — Basecamp Terlingua — has not paid HOT taxes since March 2020. 

HOT taxes are designed to put “heads in beds,” skimming money off the top of the region’s tourism industry to further promote visitation of the area. Local officials have tried to expand the scope of HOT taxes over the years, arguing that causes like dark sky protection also fall under the umbrella of promoting tourism. 

Services like AirBnB and VRBO automatically deduct the state’s 6% tax and the county’s 7% tax. Basecamp Terlingua was barred from listing on AirBnB in 2020 after its founder, Jeff Leach, was accused of sexual assault. The case has since been dismissed, but at press time, Leach’s listings had not yet been reinstated on the site. Bookings through Basecamp’s private site automatically deduct a 7% HOT tax from each transaction, but that money has not been remitted to the county in over two years. 

Basecamp Terlingua is not the only operator to be skirting taxes — smaller operations have fallen behind as well, and many new AirBnB owners in the region don’t know that they ought to enroll themselves in the county’s collection process. Brewster County Judge Eleazar Cano weighed the need to give smaller operators “the benefit of the doubt” while attempting to collect these taxes with the push to crack down on larger unpaid bills. “We do know of some who are intentionally not paying,” he said at the recent meeting. 

Rod Ponton, who serves as both the City of Alpine and the Presidio County attorney, gave a short presentation and fielded commissioners’ questions about how to address the problem of unpaid taxes. One problem he identified was that the county is the legal entity charged with setting and collecting taxes, but the taxes ultimately go to fund the activities of an organization without the same legal power: the Brewster County Tourism Council. As the entity using the taxes lacks legal power, the enforcement process for collections can be fraught.

The Brewster County Tourism Council is made up of volunteer representatives from area businesses, as well as two paid county employees who help organize the group’s activities. “The Tourism Council is an advisory arm to the Brewster County Commissioners Court — it’s the avenue through which Brewster County spends the money,” Ponton explained. “They have an administrator that they pay with HOT taxes, and they just hired an assistant.”

The council meets periodically and approves funding proposals that can be sent on to the Brewster County Commissioners Court. Ponton stressed that this process of “approval” is merely advisory: it’s ultimately up to the county to decide what to fund, but the Tourism Council helps the commissioners keep a finger on the pulse of what folks in the local tourism industry want. 

Ponton also explained an issue that’s especially prevalent in the unincorporated parts of the county: as land ownership transfers, so does tax liability. This is especially pertinent in the case of Basecamp Terlingua, which just put its Kempf Road assets on the market for $2.1 million dollars. “[Basecamp Terlingua] has generated consistent revenue year-over-year at a high profit margin,” its Terlingua Real Estate listing reads. “The existing owner is willing to consider a management contract, making the investment even more attractive.” 

Ponton explained that the delinquent HOT taxes may not be such a great deal for any potential new owners of Basecamp, who will be expected to assume the liability. (Leach owns and has not listed a property near the Terlingua School, which is about to debut 10 new bubble houses and an 80-foot swimming pool.) “Debt follows the property — we say it ‘follows the dirt,’” he said. 

Ponton’s presentation also squashed concerns — or hopes, for some — that local landowners could retaliate with a civil suit. “The only people who can collect taxes is the county, that’s the legal entity involved,” he explained. “Think about it: could you sue me in Presidio County for hypothetically not paying my taxes?” 

As previously reported by The Big Bend Sentinel, the county has a few legal options yet to explore: the county attorney can request that the district court enjoin the delinquent property, or order a full audit of any individual behind on their HOT taxes, or impose a series of escalating penalties for unpaid bills. Brewster County already levies interest at the rate of 10% per annum on delinquent taxes, beginning 60 days from the due date. 

“Several operators from the Terlingua area have talked to me about this because they’re upset, because they’re being honest, because they’re being good citizens,” Ponton told the commissioners to close his presentation. “We need to be treating people fairly.”