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Colorado bill gives counties more power to regulate vacation rentals

  • May 26, 2020 | Jennifer Sokolowsky

Colorado capitol building

Colorado Governor Jared Polis has signed a bill that gives Colorado counties more power to regulate short-term rentals. The measure allows counties to create rules for licensing short-term rentals, setting fees, and revoking licenses.

Home-rule cities such as Denver have already been regulating vacation rentals for years, but counties have expressed their need for more power to control the industry, especially in resort communities.

The law goes into effect 90 days after the final adjournment of the 2020 state general assembly, which is suspended until May 26 due to the COVID-19 pandemic.

In Colorado, state law requires short-term rental hosts to collect taxes from guests, including state sales tax and state-administered local sales and lodging taxes. Before they can collect these taxes, hosts must register with the state for a tax license.

Airbnb and Vrbo automatically collect state-administered short-term rental taxes for their hosts in Colorado. Hosts may also be required to collect and pay locally administered lodging tax; check with your online platform to see whether local taxes are being collected for you.

If taxes aren’t collected for you, you’re responsible for taking care of them yourself. Even if your rental platform collects taxes for you, you’re still required to register for tax licenses and file regular lodging tax returns. 

MyLodgeTax can automate and simplify short-term rental tax compliance, including registration and filing with state and local tax authorities. For more on short-term rental taxes in Colorado, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.

Short-term rentals allowed to reopen in some Colorado counties

Short-term rentals are getting the green light to reopen in some Colorado counties following their closure due to the COVID-19 pandemic. Under the state’s safer-at-home order that went into effect April 25, hotels are allowed to operate, but short-term rentals are excluded.

The state health department has approved requests for variances from the state public health order, allowing short-term rentals to open in:

Short-term rentals must follow safety and sanitation restrictions.

Summit County officials have also requested a variance from the state and are planning to open vacation rentals as of June 1 — depending on approval of the variance request or a change to the state public health order. The county has outlined strict protocols for hotels and short-term rentals to follow, including rules on mask wearing, physical distancing, and sanitation. 

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.

Learn more about CO lodging tax rules