Steamboat voters aren’t only mountain residents weighing STR taxes this fall

Aspen, Dillon, Glenwood Springs and Carbondale are all considering additional taxes

After getting Steamboat Springs City Council approval on Tuesday, July 19, the question of whether add a tax of up to 9% on short-term rental stays is in the hands of voters.
John F. Russell/Steamboat Pilot & Today

Steamboat Springs won’t be the only mountain town to decide whether to put new taxes on short-term rentals in November.

Voters in Aspen, Dillon, Glenwood Springs and Carbondale will all decide whether to impose additional taxes, with at least part of those funds in each municipality going to support affordable housing.

In Summit County, where many short-term rentals are beyond the limits of any municipality, commissioners are asking voters to support an additional 2% tax that could raise as much as $5 million a year.

“This vital funding would assist in providing more workforce housing and child care, in addition to helping us address impacts from our high number of visitors throughout the year,” said Summit County Commissioner Elisabeth Lawrence in August.

These attempts to raise taxes on STRs to support hosing for locals follow similar attempts to raise taxes on these rentals in Frisco, Silverthorne and Avon. All of those measures passed with more than 60% support.

Frisco’s tax passed in April with 64% of the vote. It adds a 5% excise tax on short-term rentals, bringing the tax rate on these units to 15.725%.

Silverthorne increased its lodging tax from 2% to 6% with nearly 75% of voters in support, brining the rate for STRs to 14.375%.

Avon’s 2% tax passed with about 70% support in November, bringing the tax rate there to 14.4%.

If Steamboat voters approve the proposed 9% tax, it would push the tax rate on STRs in the city to 20.4%, though council members have emphasized the measure allows them to tax up to 9%, and doesn’t require a rate that high.

Opponents of Steamboat’s tax proposal say the new tax would make Steamboat less desirable to visitors, as places like Vail would have a lower tax rates for STRs.

Similar arguments have been made in Aspen. Still, polling conducted in July by the city showed that 63% of those surveyed supported adding taxes on STRs.

Last month, Aspen City Council approved a ballot question that would impose an additional 5% or 10% in taxes on STRs, depending on whether the unit is owner-occupied. That would put the tax rate for an STR at 21.3%, if voters pass the measure.

“Voters feel STRs are negatively impacting neighborhoods, the sense of community and the availability and price of housing in Aspen,” according to a summary of the July poll conducted by Salt Lake City-based Frederick Polls. “They also feel that short-term renters are not paying the full cost of their impact on Aspen services.”

The poll also showed that 75% of STR owners surveyed in Aspen opposed adding a tax.

Dillon voters will face two lodging tax questions. The first would create a 5% excise tax specifically on STRs and the second would increase the town’s lodging tax from 2% to 6%. Hotels and motels are exempt from the excise tax, but would pay the increased lodging tax if passed.

If both measures pass, officials in Dillon have estimated the town will collect about $3 million in the first year, which would be used for town projects including workforce housing projects and street and parking improvements, among other potential uses.

In Glenwood Springs, the 2.5% proposed lodging tax would apply to all lodging and not just short-term rentals. That tax stemmed from months of work by the Glenwood Springs Community Housing Coalition to find a funding mechanism for sustainable housing.

Once paired with another 2.5% lodging tax and other local sales taxes, STR stays would be taxed at a rate of 13.6% in Glenwood.

In Carbondale, city leaders opted not to increase the lodging tax this year in favor of a 6% excise tax on short-term rentals. The city doesn’t have as many STRs as Steamboat and other resort towns have, but Carbondale Trustee Colin Laird said the tax is expected to generate up to $180,000 a year if passed and that is a start.

“Everyone is doing something related to this,” Laird told the Glenwood Springs Post Independent. “We have talked about small steps building up to bigger steps and this is one of those first steps.”

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