by Leah Gallant, Garfield & Hecht, P.C.
On November 8th, Aspen voters approved City of Aspen Ballot Issue 2A, authorizing the City to impose a new tax on short-term rental businesses and homeowners. The concept is not new: comparable mountain destinations such as Vail, Snowmass Village, Park City and Telluride, among others, have all approved a similar short-term rental tax ranging from 10.3% to 15.15%. Aspen’s voters have approved a comparable tax, ranging from 5% to 10% based on permit type.
Aspen has an existing tax rate on lodging set at 11.3% across the board. The new tax that will go into effect in 2023 will add to the existing 11.3% tax at the following rates:
- STR-LE (or lodging exempt properties such as Condo-hotels) will incur an additional 5% tax, totaling 16.3%.
- STR-OO (or owner-occupied units being rented 120 nights per year or less) will incur an additional 5%, totaling 16.3%.
- STR-Classic (or units that are not owner-occupied or which are short-term rented for more than 120 nights per year) will incur the highest tax rate at 10%, totaling 21.3%.
Only STR permit holders will be subject to the tax. Traditional hotels, motels, time-shares and bed and breakfast accommodations are not subject to the Short-Term Rental Tax. Consistent with the City’s stated purpose for imposing Ordinance 9, at least 70% of the revenue generated from the new tax will be used to fund affordable housing. The remaining 30% may be used for infrastructure maintenance and repair, and for environmental initiatives.
The City has deployed various resources to find and penalize owners that seek to rent short term without obtaining a license or paying any tax. So, we strongly caution against going that route.
The tax increase is set to go into effect on May 1, 2023. For more information on these important changes or for assistance with applications or compliance with Ordinance 9, please contact:
Leah Gallant (lgallant@garfieldhecht.com or (970) 925-1936 ext. 814)
Andrea Bryan (abryan@garfieldhecht.com or (970) 425-8119 ext. 645)
Christopher Bryan (cbryan@garfieldhecht.com or (970) 925-1936 ext. 802)
