Blue River passes new vacation rental tax, votes down use and sales tax proposals
November 3, 2010
Blue River voters came out in support of 2c, passing a new 3.4 percent tax on short-term property rentals with 58 percent of the vote, according to early election reports.
But two other Blue River tax proposals were voted down by hefty margins Tuesday.
Blue River ballot question 2a, a 2.5 percent sales tax and 2b, a 2.5 percent use tax on construction materials, storage and any registered vehicles purchased at retail were soundly shut down, with more than 70 percent “no” votes for each.
The three taxes were proposed to help Blue River offset a significant decrease in property tax revenue, the town’s primary source of income, coming in 2012.
“That’s sort of the way I expected it to go,” town trustee Robert Theobald said of the election results. “It’s sort of in line with what’s happening in the county and in the region. It’s all part of working with the Colorado Association of Ski Towns (CAST).”
Approval of the 2c accommodation tax will allow Blue River to take advantage of a new online system implemented by CAST this fall that monitors vacation rentals to help ensure accommodation taxes are paid.
Vacation rentals were prohibited in Blue River in the past. But homeowners in the town continued the practice anyway through websites like Craigslist. With the new tax in place, Blue River will now allow short-term rentals and will collect taxes on them, Theobald said.
With almost no commercial establishments of its own, Blue River has never had a sales tax. Blue River residents pay sales taxes on purchases made elsewhere in the county, and the town gets a small amount of sales tax income from Summit County.
In 2010, approximately 72 percent of the town budget revenue came from property taxes. Recent assessments have dropped home values by an average of 20 percent, a decrease which will first take its toll on property tax collections in 2012.
Because Blue River has never had a tax on vacation rentals before, it’s hard to determine how much money 2c will bring in, town representatives said.
Proponents of the measure say it won’t hurt Blue River residents because it will primarily be paid by homeowners who rent out their properties for much of the year, according to a summary of comments in favor of the ballot questions on Blue River’s town website.
Opponents said the town budget was fine without the additional cash, according to a summary of comments against the measures on the website.
The bulk of Blue River’s budget, approximately 90 percent, is used to fund road maintenance, snow plow services and the police department.
SDN reporter Caddie Nath can be contacted at (970) 668-4628 or at firstname.lastname@example.org