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Denver may allow Airbnb to collect taxes

Here's some news about Denver's Airbnb law that came out of the Short Term Rental Advisory Committee meeting held on Jan. 24.

Will Airbnb collect your taxes? Soon ... maybe.

The City of Denver is looking to change its tax law to allow short-term rental platforms like Airbnb and VRBO to collect lodging tax on behalf of owners.

This is a big deal because right now, the burden of complying with Denver's Airbnb regulation (and its requirement to pay the 10.75% lodger's tax) rests solely on hosts. I've heard from a number of Airbnb hosts in Denver that say they aren't applying for a license because they think it will be a hassle to collect and remit the taxes. If Denver could allow Airbnb to collect automatically, that would ease a lot of headaches.

You can read the city's handout about the tax issue. It basically says that instead of reaching an agreement with Airbnb (and then having to reach an agreement with other platforms like VRBO or Flipkey), the city has opted to try to change its tax law to allow any platform to collect and remit taxes.

But changing tax laws requires going through the entire city legislative process. An official at the Jan. 24 meeting said they hoped to have it done by the end of 2017.

Earlier this month, Airbnb announced a partnership with the State of Colorado to collect and remit a number of different taxes.

The computers are watching

At that meeting, the city also discussed its partnership with a company called Host Compliance. Host Compliance scrapes sites like Airbnb or VRBO looking for hosts that might not comply with licensure requirements.

How this will play out will be interesting to watch. Data mining is obviously a more powerful tool than some city inspector manually flipping through the 3,400+ Airbnb listings in Denver.

How many are complying

At the Jan. 24 meeting, the city released some figures on compliance. Denver Excise and Licenses has received:

  • 759 active STR licenses

  • 244 temporary STR licenses

Denver EXL has contacted and monitored 294 STR operators:

  • 155 became licensed

  • 121 stopped operating

  • 8 obtained lodger's tax ID but not full license

Of the remaining operators contacted:

  • 10 have been sent notice to cure violations within 14 days or risk an administrative citation

  • 3 are under a primary resident audit

Are you looking to do Airbnb legally? Are you open to moving and trying your hand at house-hacking? I specialize in finding buyers Airbnb investment properties in Denver. Reach out today.

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