This short-term rental bill will destroy Colorado tourism and mountain town economies

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What is the lodging property tax treatment bill? The measure would classify homes that are rented for more than 90 days a year on a short-term basis — defined as less than a month per booking — as commercial lodging properties. The property tax assessment rate for lodging properties is 27.9% compared with the 6.765% rate used this year for residential properties.

A vital part of the economy

Short-term rental properties provide stable careers in Colorado mountain economies. Business owners are petrified by the implications of impending policy change, and we must offer the perspective of the property management industry in Summit County. 

Legislators who will be voting on this bill need to understand that careers are relatively scarce in most mountain towns. These well-paying, salaried jobs offered by short-term rental companies along with the supporting industries are critical. They provide essential stability in anchoring many of the residents and their families, allowing them to earn significantly higher income than typical seasonal jobs with low hourly wages provided by large corporations. This includes not only property managers, but cleaners, hot tub technicians, accountants, handymen and vendors of all trades that maintain a depreciating short-term rental property.

The bottom line is that our communities are predicated on the tourism industry — and for every dollar spent on short-term rental lodging, three more dollars are spent within that same community. This misguided tax increase is absurdly backward and can guarantee devastation at the loss of $1.4 billion, as stated in the study undertaken by economist Arthur B. Laffer, Ph.D., who is a respected author that state officials often use for lodging studies.

If this bill stands as it is written, Colorado mountain economies will have a significant decline.

Courtesy of the Summit Daily News.