An excise tax on short-term rentals moves one step closer to appearing on the April ballot. Frisco Town Council approved the ordinance for the tax on first reading Tuesday, Jan. 11.
After discussing the excise tax — which is a tax imposed on goods, services or activities — in November, the originally proposed 7.5% tax has been lowered to a 5% tax. It is estimated to generate between $1.2 million and $1.5 million in additional revenue each year that would be used for workforce housing programs, supplementing 5A revenue.
“I want to ensure you that we are not looking purely to short-term rentals to fund workforce housing,” council member Melissa Sherburne said. “What we’re looking to do is to help offset the problem short-term rentals have created in our local housing landscape. … Workforce housing is an age-old problem in mountain towns — has been for decades.”
Adding a new 5% excise tax to the current 10.725% in taxes applied to short-term rentals brings the total tax to 15.725%. To compare, Crested Butte has the highest short-term rental tax among mountain towns at 20.9%. Avon has a 14.4% tax, Vail is 10.3%, Breckenridge is 12.275%, Dillon is 10.875%, and Silverthorne is 10.375%. Breckenridge’s figure does not include the bedroom license fee, and Silverthorne is proposing a 4% incremental increase to the lodging tax.
