Short-term rentals face new rules in Aspen and Pitkin County, Colorado

Short-term rental hosts within the city limits of Aspen and unincorporated areas of Pitkin County, Colorado, will be able to rent their properties out for a maximum of 120 days a year under new laws passed by both governments.

In addition to the limits on number of rental days, Aspen will now require short-term rentals to have one of three types of permits:

• Classic: Numbers limited in certain residential and ski-area zones, but unlimited in commercial, lodging, and preservation zones
• Owner-Occupied: No limit on number
• Lodging Exempt (condominiums with hotel-like amenities such as a front desk): No limit on number

The Aspen law went into effect July 29, 2022.

All holders of short-term permits issued before December 8, 2021, when the city declared a moratorium on new permits, must comply with the new rules. Operators may apply for new permits beginning October 1, 2022.

Aspen also capped the number of short-term rental permits in certain zones to 75% of existing permits. Currently, there are 540 short-term rental permits in those zones, which will be reduced to 407 through attrition.

Under the new Aspen rules, no more than two people per bedroom plus one additional occupant may stay in a short-term rental, and hosts must also follow rules on safety requirements, noise, wildlife safety measures, and more. 

Aspen passed its previous vacation rental ordinance in late 2020. The rules require short-term rental operators to obtain business license and short-term rental permits. The city also requires short-term rental hosts to collect city sales and lodging taxes and file lodging tax returns. Neither Airbnb nor Vrbo collect these taxes for Aspen hosts, so they are solely responsible for compliance.

With its new regulations, which go into effect September 20, 2022, Pitkin County will also require licenses. Applications were available beginning July 15, 2022. The county also mandated a minimum stay of four nights for short-term rentals.

Short-term rentals in Pitkin County are subject to state-administered lodging taxes. All Colorado hosts are also required to apply for a tax license with the state and pay state sales and lodging taxes.

Airbnb and Vrbo collect state sales tax, state-administered county and city sales tax, and county lodging tax on behalf of Colorado hosts. 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.

Short-term rentals have received a lot of scrutiny over the past several years in Colorado, with many communities passing new laws to regulate them.

Summit County, for example, recently instituted a moratorium on new vacation rental permits for the second time within a year. The nine-month moratorium went into effect May 24, 2022, and applies to new licenses for short-term rental properties in neighborhood zones. 

Meanwhile, 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.

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

MyLodgeTax can automate and simplify short-term rental tax compliance, including registration and filing with state and local tax authorities.