Short-term rental owners meet at Colorado Capitol to oppose property tax bill

A group of Colorado short-term rental owners and managers gathered at the Capitol on Tuesday to voice their opposition to a bill that would increase taxes on their properties.

The Colorado Lodging and Resort Alliance, which organized the gathering, says Senate Bill 33 would be damaging for the state’s tourism economy.

SB 33 proposes reclassifying certain residential properties that are used as short-term rentals for over 90 days as lodging properties. The change in classification would increase a property’s assessment rate to 27.9% compared to the 6.765% for residential properties.

“The effect of Senate Bill 33 is to discourage people from opening their homes to guests because you have a property tax threshold – once it crosses 90 days rented – where your property taxes would then quadruple,” CLARA board member CJ Willey, who has a property in Steamboat Springs, told The Center Square in an interview.

According to a fiscal note for the bill released this week, the bill would affect between 16,500 and 25,700 properties in the state.

“... Residential assessed value for affected short-term rental units will total between $1.2 billion and $1.9 billion in property tax year 2026,” the fiscal note says. “After applying the higher assessment rate for lodging properties, assessed value would increase to between $4.9 billion and $7.9 billion.”

SB 33 directs county assessors to send owners notices detailing the number of days a property was used for a short-term in the previous tax year. Owners would be required to sign and return the document to the assessor unless the number of days are disputed.

“It really works in a truly punitive way, such that 90% of owners would rent less so they’re not subject to the property tax or not at all because it becomes such a headache,” Willey said, citing survey numbers included a study commissioned by CLARA. “So what that does is a 56% reduction in the number of available lodging options for guests in Colorado that leads to a loss of over $1 billion annually in terms of tourism spending.”

The survey, conducted from November and December 2023, included over 2,500 respondents who own short-term rental properties in the state, according to CLARA.

“A reduction in tourism brought on by a decrease in reasonably priced lodging options for visitors carries with it losses in sales, motor fuel, lodging, corporate income, and personal income tax revenues,” the study conducted by Laffer Associates says.

The Colorado Sun reported last week that the bill’s sponsor, Sen. Chris Hansen, D-Denver, will introduce "significant amendments" to the bill to focus it on corporate-owned properties. SB 33 is scheduled to appear before the Senate Finance Committee on Feb. 20.

According to Willey, CLARA has yet to see the details of any proposed amendments to the bill that might be coming.


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