Avalara MyLodgeTax > Blog > Lodging Taxes > Basalt latest Colorado town to make tax-collection deal with Airbnb

Basalt latest Colorado town to make tax-collection deal with Airbnb

  • Nov 16, 2017 | MyLodgeTax

Basalt, Colorado

Basalt has joined 11 other jurisdictions in Colorado that have reached an agreement with Airbnb for the online vacation rental platform to collect lodging taxes from guests.

For vacation rental owners in Basalt who use Airbnb to list their properties, the agreement means that Airbnb now collects the town’s 4 percent lodging tax from guests when they book and passes the tax on to the state. Airbnb started collecting Basalt taxes for operators Nov. 1.

Airbnb has a separate agreement with the state of Colorado, which means that Airbnb also collects state sales tax, along with other county, local marketing district, or local taxes that are assessed on short-term rentals in Basalt.

Basalt is a bit of a complicated case because it straddles two counties, each with its own sales tax rate. So Basalt rental properties located in Pitkin County are subject to a 9.3 percent sales tax rate (plus the 4 percent town lodging tax), while Basalt properties located in Eagle County are subject to an 8.2 percent sales tax (plus the 4 percent lodging tax).

If you’re a short-term vacation rental operator in Basalt, the Airbnb agreement should be a welcome development. However, keep in mind that you’re still ultimately liable for collecting and remitting all lodging taxes that aren’t handled by Airbnb — including taxes on all rental revenues through other platforms.

Other rental platforms, such as VRBO, may not collect lodging taxes on your behalf. In that case, you’re responsible for registering with tax authorities, collecting taxes from guests at the right rates for the several jurisdictions that govern Basalt, filing lodging tax returns, and remitting the taxes collected.

Local jurisdictions are becoming increasingly aware of the potential impact of uncollected lodging taxes from short-term vacation rentals. Many localities are working to more effectively capture this revenue with legislation, stronger enforcement, and deals with Airbnb.

According to Airbnb, the typical Basalt host earned $7,100 in 2016. Basalt officials say the deal, which was initiated by the town, could bring in $20,000 per year in new tax revenues.

Other Colorado jurisdictions that have made a deal with Airbnb to collect lodging taxes include Boulder, Carbondale, Colorado Springs, Durango, Golden, Loveland, Pagosa Springs, Snowmass Village, and Steamboat Springs.

Lodging tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
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