Colorado, Oregon voters approve short-term rental measures in several municipalities

Voters in several cities and towns in Colorado and Oregon voted to restrict short-term rentals and increase vacation rental taxation in the November 2, 2021, election, driven by resident concerns about the impact of vacation rentals on neighborhoods and affordable housing.

In Colorado, the municipalities of Avon, Crested Butte, Leadville, Ouray, and Telluride will raise or impose new short-term rental taxes as a result of the election. Meanwhile, Lincoln County, Oregon, will phase out short-term rentals from single-family residential zones over the next five years.

Avon voters approved a new short-term rental tax that is expected to generate between $1 million and $1.5 million in the first year for a community housing fund. The tax goes into effect January 1, 2022.

Short-term rentals in Avon are subject to county sales tax and city sales and accommodations taxes, in addition to state-collected taxes. Airbnb and Vrbo both collect state, county, and city taxes on behalf of Avon hosts.

In Crested Butte, residents voted to increase the excise tax on short-term rentals to support affordable housing. The tax hike goes into effect January 1, 2022.

Short-term rental guests in Crested Butte must pay city sales and excise taxes on short-term rentals, in addition to state-collected taxes. Airbnb does not collect city taxes on behalf of vacation rental operators, but Vrbo does.

Leadville voters approved a new tax on accommodations, including short-term rentals, that is expected to raise $300,000 in its first year for affordable and community housing. Previously, short-term rentals were subject only to state and county taxes. These are collected by Airbnb and Vrbo on behalf of their hosts.

Residents in Ouray passed a measure to levy a 15% excise tax on short-term rentals, starting in 2022. Half of the revenues from the tax will fund affordable housing, with the other half going to water projects. The new tax is in addition to state-collected taxes, which are collected by Airbnb and Vrbo, and the city’s lodging occupation tax, which is not collected by either marketplace.

In Telluride, voters approved a measure that doubles the fees for short-term rental licenses and places a two-year moratorium on issuing new ones. Revenues from the fee increase will go to the city’s affordable housing fund.

Another Telluride measure, Question 300, failed. It would have capped the number of short-term rentals in the city at 400, with an annual lottery to distribute licenses. Under the measure, owners renting out their primary residence and lodging establishments would be exempt from the cap.

Short-term rentals in Telluride will continue to be subject to San Miguel County lodging tax and Telluride excise and short-term rental taxes, in addition to state-collected taxes. While Airbnb collects county lodging taxes, Vrbo does not. Neither Airbnb nor Vrbo collect city taxes on behalf of Telluride hosts. Hosts must collect these taxes from guests and submit them to the proper tax authorities.

All Colorado hosts are required to apply for a tax license with the state and pay state sales and lodging taxes. Airbnb and Vrbo collect state sales tax and state-administered county and city sales tax on behalf of Colorado hosts, while Airbnb also collects county lodging tax. Hosts are responsible for collecting all required taxes from guests and submitting them to the proper tax authorities unless their short-term rental marketplace collects taxes for them.

In Colorado, even if a rental marketplace collects lodging taxes, the host is still required to register for a state tax license and file regular lodging tax returns. For more on short-term rental taxes in Colorado, see our Colorado vacation rental tax guide.

With the passage of Measure 21-203, Lincoln County will immediately cease issuing new short-term rental licenses and phase out short-term rentals in single-family residential areas in unincorporated parts of the county over five years. 

The county recently placed a moratorium on issuing new short-term rental licenses through November 30, 2021, while it worked on new regulations for short-term rentals. Just before the election, county commissioners voted to update the county’s short-term rental regulations, including limiting the number of vacation rentals and clarifying enforcement. The county is reviewing the impact of the ballot measure on those rules.

Short-term rental hosts in Lincoln County must register with the Lincoln County treasurer and collect county transient lodging taxes at the time of payment and pass those on to tax authorities. Vrbo collects county taxes on behalf of its hosts, but Airbnb does not collect local lodging tax for its Lincoln County listings. Hosts are responsible for collecting any taxes that are not collected for them by short-term rental marketplaces.

Operators are also required to collect and pay state lodging taxes. In Oregon, all short-term rental marketplaces are required to collect state lodging taxes on all bookings. For more on lodging taxes, see our Oregon vacation rental tax guide.

MyLodgeTax can help short-term rental hosts figure out their lodging tax obligations and take care of any lodging taxes that are not collected for them. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.