Aspen closer to taxing short-term rentals |

Aspen closer to taxing short-term rentals

Aspen City Council took the first two vital steps Tuesday to getting a better sense of the impact short-term rentals have on the local lodging market while boosting its tax coffers.

The five-member board unanimously approved a policy resolution that would allow amending the municipal land-use code to require vacation rental properties to acquire a business license, while also OK’ing on first reading an ordinance making the same demands. The ordinance goes to a public hearing Sept. 22.

Council began entertaining the idea earlier this year before the pandemic seized their attention. If the ordinance passes, condo-hotel units would only be required to obtain a single vacation rental permit and business license if they are located and managed on the same property. Owners of other vacation rental properties would have to buy separate business licenses and vacation rental permit for each unit.

“We have 650 units that are listed somewhere as a rental unit that don’t have a business license,” said Pete Strecker, city finance director. “Our data is still telling us the same story.”

Short-term rentals on such sites as VRBO and Airbnb are prime offenders, officials said, because most of them don’t pay the city’s 2% lodging and 2.4% sales taxes.

The city would realize more revenue by collecting $150 fees for the business licenses, but “one of the main benefits from this … is understanding the market better,” said Phillip Supino, director of the Community Development Department.

“The issue at hand is that there is currently inadequate compliance with business license and Short-term Rental (STR) permitting regulations, reducing the taxes collected by the city from STR businesses and undermining the city’s ability to monitor and regulate the industry,” said a memo to City Council from Strecker and Supino. “Amending the STR regulations in the land-use code will provide finance and community development the tools and information required to improve tax compliance and collect essential data about STRs in town.”

Donnie Lee, general manager of The Gant, which is a condo-hotel, said the requiring business licenses “would really level the playing field for all.”