Beware Springs VRBO and AIRBNB owners and managers!

[Lauren H.]

Attention Colorado Springs VRBO and AIRBNB managers, owners and operators:

On Tuesday, October 23, 2018 Colorado Springs City Council unanimously approved a new licensing requirement for the operation of short term rental units in Colorado Springs by requiring an annual license at $119.00 and payment of 2% of all short term rental receipts to the city.

I believe this is against Amendment X of the Colorado Constitution, otherwise known as the Colorado Taxpayer Bill of Rights which reads

‘ 4) Required elections. Starting November 4, 1992, districts must have voter approval in advance for:

(a) Unless (1) or (6) applies, any new tax, tax rate increase, mill levy above that for the prior year, valuation for assessment ratio increase for a property class, or extension of an expiring tax, or a tax policy change directly causing a net tax revenue gain to any district.’

This is obviously a new tax which has been levied without voter approval. This tax is a rent grab- an attempt for the city to increase revenue without providing any public service or accountability for the use of the funds. This new tax was opposed by may Springs homeowners who need additional income in order to afford to live here. This new tax increases the cost of tourism and will, overall, raise the short-term rental rates in our city.

Additionally, keep in mind that you already pay the mill levy annually on your residential property as well as reporting any rental income on your state and federal tax return. As such, this new tax amounts to triple taxation on short term rentals. 

Fight back!

[Tom S.]

This is starting to pop up in different areas. Fort Collins made some changes to this as well, I don't have all the details, but I believe it is now required to have a short term rental license and then you have to collect lodging taxes. Most recently Hawaii county passed a similar law, but they already had really high taxes for rentals. In my opinion, it's a money grab, and governments love revenue, so I believe it will continue and eventually be the norm in most places if they are popular.