Possible city tax on Airbnb, short-term rentals tempered in Steamboat Springs by legal realities | SteamboatToday.com

Possible city tax on Airbnb, short-term rentals tempered in Steamboat Springs by legal realities

Steamboat ranked eighth in Colorado for the most popular destinations for Airbnb vacation rentals, according to booking data from the popular short-term rental site. Hosts collected $3.7 million from guests, some of which goes to the city through sales and accommodation taxes.
Courtesy Photo

— The city’s elected officials have learned that pursuing taxes or fees on short-term rentals to help fund community housing would be complicated, expensive and perhaps even unfeasible.

“The squeeze might not be worth the juice,” Councilman Scott Ford said after the council received a briefing on the legal implications of the idea.

City Attorney Dan Foote said the pursuit of an impact fee on the rentals would require that the city conduct an expensive impact study to justify the added expense on only a certain portion of the rental market.

The study would have to address some questions.

“Is it taking housing stock away? Is it creating the need for more housing?” Foote asked. “Those are the kinds of questions we would have to get into with an impact study. It would be difficult to get a study to support a fee just on Airbnb and VRBO, but who knows until we do it.”

Ford said he thinks if the city does pursue any fee on rentals, it would have to be in the form of an additional lodging tax that is placed not only on Airbnb and short-term rentals but also on hotel accommodations and other rentals of 30 days or less.

Council President Walter Magill said he thinks short-term rentals are impacting the availability of market housing. But the total impact, he said, is hard to put a finger on.

Councilman Jason Lacy said the revenue from a tax or fee on the short-term rentals may not be big enough to help the city reach its housing goals.

The fee on short-term rentals was one of five suggestions from a steering committee that spent months studying the region’s housing woes and shortfalls.

The city late last year did make some progress in ensuring that it was receiving all of the tax revenue from short-term rentals.

Airbnb this month started collecting and remitting the required city sales and lodging taxes for all hosts in the city.

Before that arrangement, it was up to the hosts to obtain the required sales tax permit and collect and remit the proper amount of taxes.

But city officials said they don’t think all of the hosts were collecting and remitting the required taxes, and the city found it difficult or impossible to go after any hosts who weren’t in compliance.

To reach Scott Franz, call 970-871-4210, email scottfranz@SteamboatToday.com or follow him on Twitter @ScottFranz10

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