Avalara MyLodgeTax > Blog > State and Local News > Denver to fine Airbnb $1,000 per day for listings of illegal rentals

Denver to fine Airbnb $1,000 per day for listings of illegal rentals

  • Dec 8, 2020 | Jennifer Sokolowsky

Denver, Colorado

Under a new city law, Denver will fine short-term rental platforms such as Airbnb and Vrbo $1,000 per day if they allow listings of unlicensed vacation rental properties. Until now, the city has focused more on individual operators in the enforcement of its short-term rental regulations.

Under the law, which goes into effect next year, companies that are cited will have 10 days to appeal, and will face further financial penalties for failing to pay fines on time.

In Denver, short-term rentals must be the primary residence of their owners, and hosts must abide by insurance requirements and other rules.

Several Denver hosts have had their licenses revoked for offering nonprimary residences up as short-term rentals, and a few have been charged with felonies. Denver hosts who operate vacation rentals without a license can be fined up to $999 per violation.

According to Denver officials, unlicensed short-term rentals are responsible for most short-term rental complaints received by the Denver Department of Excise and Licenses, which enforces the city’s regulations.

Short-term rental hosts in Denver are also required to collect taxes from guests, including city lodger’s tax and state sales tax. Before they can collect these taxes, hosts must register for tax licenses with both the city and the state.

Airbnb and Vrbo automatically collect both state and city tax for their Denver hosts. However, even if a rental platform collects taxes for hosts, the host is still required to register for city and state 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.

Platforms including Airbnb and Vrbo have fought these kinds of laws in court in other cities in the past, but they’ve taken a much more cooperative stance this year, and are expected to abide by the Denver law.

In a settlement this summer, Airbnb agreed to provide more information on its properties to New York City in order to support the city’s short-term rental enforcement efforts, ending two years of legal battles.

More recently, Airbnb and Expedia Group (parent company of HomeAway and Vrbo) made an agreement with Honolulu to require hosts to provide government-issued property identification and tax registration numbers. That followed on the heels of similar agreements with Kauai earlier this year

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.

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.
Avalara logo featuring a globe surrounded by colorful lines and swirls

Learn more about CO lodging tax rules