Mountain Village addressing loopholes for reporting and collecting sales tax on short term rentals

Mountain Village amends its business license ordinance and closes lodging tax
loopholes.
April 1, 2010 (Mountain Village, Colo.) – Like many Colorado municipalities, the Town of
Mountain Village collects a business license fee and lodging tax on short-term rental
properties. But with the growing popularity of vacation rental Web sites, the tasks of
collecting the appropriate fees and revenues from short-term property rentals have become
challenging. These challenges translate to a loss of revenue for the town – and its
taxpayers. Last month, Town Council received a report from staff outlining the issue and
their recommendation for best approaching and managing this matter expeditiously.
In addition to sales tax, the town collects a 4% lodging tax. Of that 4%, half is invested in
marketing the region with many of the initiatives undertaken by Marketing Telluride, Inc.
The other 50% is contributed to the Airline Guarantee Program, administered by the
Telluride Montrose Regional Air Organization. Of the proceeds derived from business license
fees, 6% is retained by the town for administrative costs with the remaining balance used
for visitor services and marketing. Nonpayment of sales taxes and business license fees
directly affects the town’s ability to support marketing efforts which benefit all Mountain
Village taxpayers and business owners, and it creates an unfair advantage for property
owners avoiding payment.
To tackle this ever growing sector causing unduly revenue leakage, the town is in the midst
of making some significant changes to its business license legislation, enforcement policies
and collection practices. In addition, the town’s Finance Department is taking specific
actions to stiffen penalties and sanctions for noncompliance. The impetus of such actions is
to capture all possible revenue streams, level the playing field for competing businesses
that do comply with the laws, and generate much needed data useful for planning
purposes. As part of this amendment process, Council approved a first reading of changes
and additions to the town’s Business License Ordinance at its March 18 meeting. The Town
Council will once again review this ordinance at its Tuesday, April 20 meeting on second
hearing.
-moreIf
approved, the ordinance and all the laws contain therein will go into effect 30 days after
approval. The major ordinance changes include newly added business license compliance
terms for short-term residential property rentals; the elimination of the 15-day rental
exception in order to be consistent with the Town of Telluride; the need for a business
license before one is able to advertise their short-term rental; and the requirement to file
an annual report for short-term rentals. To review a draft of the complete ordinance, visit
###
Mountain Village Media Contact:
Nichole Zangara
(970) 369‐6430 | (970) 729‐2179 | [email protected] | townofmountainvillage.com
Join us on Facebook | Follow us on Twitter | Signup for e‐mails at townofmountainvillage.com/email
ABOUT MOUNTAIN VILLAGE
Mountain Village, situated in the heart of the breathtaking San Juan Mountains, was
incorporated in 1995 as a home rule municipality. Its founders envisioned a European-style
ski-in/ski-out, pedestrian-friendly destination resort that would complement the historic
mining town of Telluride. A three-stage gondola transportation system connects the Town of
Mountain Village with the Town of Telluride. Situated at 9,500 feet, Mountain Village is
comparably a world apart from other resorts: it is innately spectacular, beautifully
orchestrated and planned, and overflowing with style, charm and sophistication. For more
information, please visit us on the Web at http://www.townofmountainvillage.com.

FOR IMMEDIATE RELEASEMountain Village amends its business license ordinance and closes lodging taxloopholes.April 1, 2010 (Mountain Village, Colo.) – Like many Colorado municipalities, the Town ofMountain Village collects a business license fee and lodging tax on short-term rentalproperties. But with the growing popularity of vacation rental Web sites, the tasks ofcollecting the appropriate fees and revenues from short-term property rentals have becomechallenging. These challenges translate to a loss of revenue for the town – and itstaxpayers. Last month, Town Council received a report from staff outlining the issue andtheir recommendation for best approaching and managing this matter expeditiously.In addition to sales tax, the town collects a 4% lodging tax. Of that 4%, half is invested inmarketing the region with many of the initiatives undertaken by Marketing Telluride, Inc.The other 50% is contributed to the Airline Guarantee Program, administered by theTelluride Montrose Regional Air Organization. Of the proceeds derived from business licensefees, 6% is retained by the town for administrative costs with the remaining balance usedfor visitor services and marketing. Nonpayment of sales taxes and business license feesdirectly affects the town’s ability to support marketing efforts which benefit all MountainVillage taxpayers and business owners, and it creates an unfair advantage for propertyowners avoiding payment.To tackle this ever growing sector causing unduly revenue leakage, the town is in the midstof making some significant changes to its business license legislation, enforcement policiesand collection practices. In addition, the town’s Finance Department is taking specificactions to stiffen penalties and sanctions for noncompliance. The impetus of such actions isto capture all possible revenue streams, level the playing field for competing businessesthat do comply with the laws, and generate much needed data useful for planningpurposes. As part of this amendment process, Council approved a first reading of changesand additions to the town’s Business License Ordinance at its March 18 meeting. The TownCouncil will once again review this ordinance at its Tuesday, April 20 meeting on secondhearing.-moreIfapproved, the ordinance and all the laws contain therein will go into effect 30 days afterapproval. The major ordinance changes include newly added business license complianceterms for short-term residential property rentals; the elimination of the 15-day rentalexception in order to be consistent with the Town of Telluride; the need for a businesslicense before one is able to advertise their short-term rental; and the requirement to filean annual report for short-term rentals. To review a draft of the complete ordinance, visitwww.townofmountainvillage.com/businessordinance.###Mountain Village Media Contact:Nichole Zangara(970) 369‐6430 | (970) 729‐2179 | [email protected] | townofmountainvillage.comJoin us on Facebook | Follow us on Twitter | Signup for e‐mails at townofmountainvillage.com/emailABOUT MOUNTAIN VILLAGEMountain Village, situated in the heart of the breathtaking San Juan Mountains, wasincorporated in 1995 as a home rule municipality. Its founders envisioned a European-styleski-in/ski-out, pedestrian-friendly destination resort that would complement the historicmining town of Telluride. A three-stage gondola transportation system connects the Town ofMountain Village with the Town of Telluride. Situated at 9,500 feet, Mountain Village iscomparably a world apart from other resorts: it is innately spectacular, beautifullyorchestrated and planned, and overflowing with style, charm and sophistication. For moreinformation, please visit us on the Web at http://www.townofmountainvillage.com.

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