Summit County passes short-term rental moratorium

Summit County, Colorado, is putting a pause on new short-term rentals — for the second time within a year.

The nine-month moratorium, which went into effect May 24, applies to new licenses for short-term rental properties in neighborhood zones. Owners who are already under contract with a home and had planned to apply for a license are exempt. 

The county had found that new, stricter rules on short-term rentals were not cutting down the number of short-term rental license applications in neighborhood zones, as it had hoped. The county’s new ordinance was passed at the beginning of the year, ending a previous three-month moratorium.

According to Summit County Senior Planner Jessica Potter, the new moratorium was implemented quickly to prevent the flood of short-term rental applications that the county saw when it passed the last moratorium. At that time, it received 172 license applications within a matter of days.

The county’s latest vacation rental law update created two short-term rental overlay zones, the Resort Overlay Zone and Neighborhood Overlay Zone, with different license types and rules for each. Hosts in resort zones with active short-term rental licenses as of December 16, 2021, will have their licenses converted to resort licenses during regular renewal in September 2022. Hosts in neighborhood zones with active licenses or applications as of December 16, 2021, will have until September 2025 to convert their license to one of the new types.

Among other rules, short-term rental hosts in unincorporated Summit County are required to register for a tax license with the state and collect state sales tax from guests. Hosts are responsible for collecting all required taxes and submitting them to the proper tax authorities, unless their short-term rental marketplace collects taxes for them.

In Summit County, Airbnb and Vrbo automatically collect state sales tax[vJF1]  for their hosts. Even if a rental marketplace collects lodging taxes, Colorado hosts are still required to register for a state tax license and file regular lodging tax returns. 

Colorado resort towns have been very active in regulating vacation rentals for the past several years. Recently, Frisco raised local lodging taxes on short-term rentals, joining several other towns that raised or imposed new short-term rental taxes via ballot measures in the November 2021 elections.

In early June, Steamboat Springs also approved a new short-term rental law that includes licensing requirements and an overlay zone map.

Colorado communities have pointed to a lack of affordable housing as one reason to regulate short-term rentals more strictly. A recent study commissioned by Airbnb found that vacation rentals have a minimal effect on affordable housing in Summit, Grand, Eagle, Pitkin, and Routt counties. However, a group of 15 Colorado commissioners from seven mountain counties have criticized the study’s findings.

MyLodgeTax can automate and simplify short-term rental tax compliance, including registration and filing with state and local tax authorities. For more on short-term rental taxes in Colorado, see our Colorado vacation rental tax guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.