Colorado legislature will introduce bill hiking taxes for short-term rental properties
If approved, any property used as a short-term rental for more than 90 days per year would be classified as lodging starting in 2026
DENVER — A bill that would significantly increase taxes for properties largely used for short-term rentals will be debated in the coming legislative session after a committee of state lawmakers agreed to let the bill move forward Wednesday.
If approved during the 2024 lawmaking session, the bill would classify any property used as a short-term rental for more than 90 days per year as a lodging property beginning in 2026.
That would nearly quadruple property taxes for an estimated 24,000 short-term rental properties in the state. The property tax assessment rate for lodging properties in 2023 is 27.9%. For residential properties, it was set at 6.765%.
Owners of short-term rental properties would be required to submit to their county assessor a signed affidavit stating how many days the property was used for that purpose the previous year. Lying on that affidavit would be considered second-degree perjury, a misdemeanor punishable by up to 120 days in jail and/or a fine of up to $750.
The bill was developed by the Legislative Oversight Committee Concerning Tax Policy & Task Force interim committee, which meets outside of the legislature’s annual 120-day legislative session.
The Legislative Council Committee is charged with determining if bills are within the scope of their committee’s role and if they do, progressing them to the full legislature, which meets beginning in January.
“This is certainly a bill that has received a lot of attention in my district. I am committed to working with constituents and making sure these conversations continue,” said House Speaker Julie McCluskie, a Dillon Democrat.
Rep. Julie Amabile, a Boulder Democrat, said she agrees the bill fits into the scope but that she’s concerned about it needing more work.
“Every community actually stands to have different unintended consequences because for every community, the role of short-term rentals is different,” she said. “So I hope you’re going to be looking at that community by community.”
Dozens of people appeared at the interim committee’s meeting in October to oppose the bill.
Rep. Mike Weissman, an Aurora Democrat and chair of Legislative Oversight Committee Concerning Tax Policy & Task Force, said that some witnesses testified that short-term rentals aren’t exactly like other lodging properties, such as hotels, and they shouldn’t be treated as such.
“I think there was some force to that and we look forward to a robust discussion in the regular session,” he said.
The bill would increase property tax revenue for local taxing jurisdictions by an estimated $371 million beginning in property tax year 2026 with similar estimations in following years, according to a fiscal note developed by nonpartisan legislative staff.
It would also increase funding for school districts by $78.2 million for property tax year 2026, according to the fiscal note.
The General Assembly has considered similar bills in recent years, but have been voted down after strong opposition from short-term rental owners.
Gov. Jared Polis has voiced support for the 90-day limit on short-term rentals being considered residential.
The bill passed along party lines with all seven Republicans on the committee voting against it and the 11 Democrats voting in favor.
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