Avalara MyLodgeTax > Blog > Lodging Taxes > Airbnb starts collecting Denver lodging taxes April 1

Airbnb starts collecting Denver lodging taxes April 1

  • Mar 27, 2018 | Jennifer Sokolowsky

Starting April 1, Airbnb will begin collecting lodging tax from its short-term rental guests in Denver, Colorado. The agreement between Airbnb and the city to collect the 10.75 percent tax has been in the works for some time, but took longer than expected to finalize.

Airbnb has been collecting a separate 4 percent state sales tax on short-term rentals since last year. The new agreement means that Airbnb will now collect all lodging taxes automatically on behalf of its Denver hosts.

However, the city has no agreement with other short-term rental platforms, such as VRBO or HomeAway, so hosts using those services for bookings are responsible for collecting both the state sales tax and city lodging tax themselves.

A recent report from the city auditor found gaps in compliance and enforcement of Denver’s short-term rental laws. Short-term rental hosts are required to register for a business license, post an identification number on any online advertisements, and collect taxes from their guests. The audit showed that between January and August 2017, only about 68 percent of active hosts had city business licenses.

The most recent figures, presented to a city council committee on February 14, show that 71 percent of active Denver short-term rental hosts were licensed — 2,272 out of 3,212. City officials expect the deal with Airbnb to raise lodging tax compliance rates.

Short-term rentals generated $3.06 million in lodging tax revenue for the city in 2017.

Colorado is a popular state for short-term rentals. Airbnb short-term operators in Colorado hosted 1.2 million guests in 2017, a 68 percent increase from the previous year. Combined, Colorado Airbnb hosts made $183 million last year, with an average of $8,100 per host.

Airbnb also has agreements with 11 non-state-administered Colorado communities to collect lodging taxes on behalf of hosts. These include Basalt, Boulder, Carbondale, Colorado Springs, Durango, Golden, Loveland, Pagosa Springs, Snowmass Village, and Steamboat Springs.

Colorado Airbnb hosts residing in non-state-administered cities that have no agreement with Airbnb are responsible for collecting and remitting local lodging tax. MyLodgeTax, a managed tax filing service, helps many Colorado hosts simplify and manage lodging tax compliance.

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.
Avalara Author
Jennifer Sokolowsky
Avalara Author Jennifer Sokolowsky
Jennifer Sokolowsky writes about tax, legal, and tech topics. She has an extensive international background in journalism and marketing, including work with The Seattle Times, The Prague Post, Avvo, and Marriott.