La Plata County short-term landlords beware: Officials plan a concerted effort in 2020 to ensure vacationers renting private homes pay taxes as they would staying in a hotel.
Local destination marketing nonprofit Visit Durango identified 1,220 vacation home rentals active in the county in November, a number surmised by AllTheRooms, a global vacation rental search engine and analytics firm.
Average rates for vacation home rentals in November ranged from $86.04 per night for a private room on Airbnb to $361.14 a night for a four-plus bedroom house rented through VRBO, according to the report. La Plata County vacation home rentals in November generated about $1.17 million in gross revenue, according to the analysis.
The county in 2019 anticipates collecting about $370,000 in lodgers tax, according to budget documents. But county officials do not have means of knowing how many short-term vacation rentals exist or how much in tax is being withheld, snubbing the county an unknown amount of revenue, said Mike Segrest, deputy manager for La Plata County.
“We have a significant problem of properties not being in compliance in terms of not remitting sales and lodgers tax,” he said.
County residents must register with the state of Colorado to remit sales tax to rent a residence short term, but not everyone complies with rules, Segrest said.
The city of Durango has for about five years required a permit and business licenses to use a residence for short-term rental, said Dan Armentano, city planner.
City rules restrict the number of vacation rentals in particular neighborhoods: There are 114 approved vacation home rentals in the city and more are on the way, Armentano said.
The application process can take up to four weeks to complete, includes public notice and requires a business license from the city of Durango and with the state of Colorado, he said.
“The city is pretty happy with the vacation rental program so far,” Armentano said. “We’ve been able to adequately regulate to where we don’t have an excessive number, and we feel those we do have are compliant with regulations and have not affected the character of the neighborhoods where they’re located.”
City officials retain authority to fine residents who rent a home short term without permission, but most stop accepting vacationers soon after receiving a violation notice, Armentano said.
The county does not regulate vacation home rentals beyond requiring sales and lodgers tax, limiting enforcement authority, Segrest said.
La Plata County property owners are not required to notify neighbors, as is the case in Durango, or get an inspection to determine if short-term rental is an appropriate land use for a county property, Segrest said.
County officials are working with Visit Durango to identify how many county residences are being rented short term, whether owners remit sales and lodgers tax and if the properties are safe for vacationers, he said.
Officials are concerned residences built for long-term residency may pose health and safety issues when used for short-term rentals, he said. Problems include adequacy of wastewater treatment systems or the existence of fire alarms or carbon monoxide detectors.
“People don’t know who reserves a property, whether it’s been inspected, the safety aspects and whether the building is appropriate for the level of use,” Segrest said. “There is our responsibility in terms of public health and safety.”
Some La Plata County residents have complained about the loss of neighborhood character as a result of vacation home rentals, but short-term occupancy has not caused “major issues with excess parking, noise or over occupancy,” Segrest said.
La Plata County officials are working now to identify the extent of issues related to noncompliance with tax codes and plan to present findings to county commissioners in 2020, Segrest said. It’s up to the county commission to determine what, if any, regulations should be implemented.
“This is not a process that will happen in a few weeks; it’ll take a few months,” he said.
bhauff@durangoherald.com
A previous version of this story said county residents must obtain a business license with the state of Colorado to operate a short-term rental. County residents must register with the state to remit sales tax and do not need a business license.
