Hotel Tax and Occupancy Tax Laws in Colorado

1. What is the current hotel tax rate in Colorado?

The current hotel tax rate in Colorado varies depending on the location of the hotel. In most areas of Colorado, the hotel tax rate ranges from 2% to 8%. For example, in Denver, the hotel tax rate is 10.75%, which includes a 4% city tax, a 4% lodging tax, and a 2.75% state tax. It is important for hotels to accurately calculate and collect these taxes from guests to ensure compliance with state and local laws. Failure to do so can result in penalties and fines for the hotel. It is advisable for hoteliers in Colorado to regularly monitor any changes in hotel tax rates to stay compliant with the law.

2. Are there any exemptions to the hotel tax in Colorado?

Yes, there are exemptions to the hotel tax in Colorado. Some common exemptions include:

1. Government employees: Government employees traveling on official business are often exempt from paying hotel taxes.

2. Nonprofit organizations: Nonprofit organizations that meet certain criteria may be exempt from paying hotel taxes. This typically applies to organizations that are registered as tax-exempt under section 501(c)(3) of the Internal Revenue Code.

3. Certain educational institutions: Educational institutions, such as colleges and universities, may also be exempt from hotel taxes under certain circumstances.

It’s important to note that exemptions to hotel taxes can vary by state and even by locality within a state, so it’s essential for hoteliers and travelers to familiarize themselves with the specific laws and regulations in place in the areas where they are operating or staying.

3. How is the hotel tax collected and remitted to the state in Colorado?

In Colorado, hotel taxes, also known as lodging or occupancy taxes, are collected by lodging establishments from guests at the time of check-in. The tax rate can vary based on the location of the hotel, with both state and local governments imposing taxes. Here is how the hotel tax is typically collected and remitted to the state in Colorado:

1. Collection: Lodging establishments are required to collect the applicable hotel tax from guests at the time of booking or check-in. This tax is typically added to the guest’s bill as a separate line item.

2. Reporting: Hotel operators must report the collected taxes to the state on a regular basis, usually monthly or quarterly. They are required to keep detailed records of all taxes collected.

3. Remittance: Once the taxes have been collected and reported, lodging establishments must remit the tax revenue to the Colorado Department of Revenue or the local tax authority. This is usually done through an online portal or by mail, along with a tax return detailing the amount collected.

It is important for lodging establishments to comply with these tax obligations to avoid penalties or fines. Additionally, failure to properly collect and remit hotel taxes can result in audits and legal consequences.

4. Are short-term vacation rentals subject to the hotel tax in Colorado?

In Colorado, short-term vacation rentals are generally subject to the state’s lodging tax, also known as the hotel tax or occupancy tax. This tax is imposed on accommodations that are rented out for periods of less than 30 days. The lodging tax rate in Colorado can vary by location, as local jurisdictions have the authority to levy their own additional taxes on top of the state rate.
1. The state lodging tax rate in Colorado is currently set at 2.9%, but additional local taxes can increase the total tax rate significantly.
2. It is important for owners of short-term vacation rentals in Colorado to be aware of their tax obligations and to collect and remit the appropriate taxes to the state and local authorities.
3. Failure to comply with lodging tax laws can result in penalties and fines, so it is crucial for property owners to understand and adhere to the tax regulations applicable to their rental properties.

5. Can hotels pass on the cost of the hotel tax to guests in Colorado?

In Colorado, hotels are permitted to pass on the cost of the hotel tax to guests. The hotel tax, also known as the lodging tax or occupancy tax, is imposed on guests who stay in hotels, motels, or other lodging establishments within the state. Hotels typically include the tax as a separate line item on the guest’s bill, clearly indicating the amount charged for taxes. This practice is common in the hospitality industry and is legal in many jurisdictions, including Colorado. By passing on the cost of the hotel tax to guests, hotels are able to comply with state tax laws and regulations while accurately reflecting the total cost of the guest’s stay. It’s important for hotels to clearly communicate these charges to guests to avoid any misunderstandings or disputes over pricing.

6. Are online travel agencies (OTAs) required to collect and remit hotel taxes in Colorado?

1. In Colorado, online travel agencies (OTAs) are not required to collect and remit hotel taxes directly to the state. However, some OTAs may voluntarily agree to collect and remit these taxes on behalf of hotels as part of their booking services. It is ultimately the responsibility of the hotel to ensure that all applicable taxes are collected and remitted to the state and local authorities.

2. The Colorado Department of Revenue requires hotels and other lodging establishments to collect state and local lodging taxes from guests and remit them to the appropriate taxing authorities. These taxes typically include the state sales tax, local sales tax, and any additional local lodging taxes imposed by municipalities or counties.

3. While OTAs are not directly responsible for collecting and remitting hotel taxes in Colorado, they may be required to disclose the full amount of taxes and fees to customers at the time of booking. This transparency helps ensure that guests are aware of the total cost of their stay, including any taxes that may be owed.

4. It is important for hotels to understand their obligations and to work closely with OTAs to ensure compliance with Colorado’s tax laws. Failure to properly collect and remit hotel taxes can result in penalties and fines, so it is in the best interest of hotels to stay informed and up to date on the requirements in their state.

5. Additionally, hotels should maintain thorough records of all transactions and tax payments to provide a clear audit trail in the event of any inquiries or audits from tax authorities. Working with a tax professional or consultant can also help hotels navigate the complexities of hotel tax laws and ensure compliance with state and local regulations.

6. In summary, while OTAs are not required to collect and remit hotel taxes in Colorado, hotels must still ensure that all applicable taxes are properly collected and remitted to the appropriate authorities to avoid potential legal and financial consequences.

7. What are the penalties for non-compliance with hotel tax laws in Colorado?

Non-compliance with hotel tax laws in Colorado can result in severe penalties for hotels and lodging establishments. Some of the potential penalties for non-compliance may include:

1. Fines: Hotels that fail to properly collect and remit hotel taxes can be subject to fines. These fines can vary depending on the amount of tax owed and the duration of non-compliance.

2. Interest: In addition to fines, hotels may also be required to pay interest on any overdue taxes. This can increase the financial burden of non-compliance over time.

3. Legal action: Colorado authorities may take legal action against hotels that consistently fail to comply with hotel tax laws. This may involve penalties imposed by the state’s tax authority or even legal proceedings in court.

4. Revocation of licenses: In extreme cases of non-compliance, hotels may risk having their business licenses revoked. This can have serious repercussions for the operation of the establishment.

5. Damage to reputation: Non-compliance with hotel tax laws can also result in damage to the hotel’s reputation. Customers may be less likely to patronize a business that does not fulfill its legal obligations, leading to decreased sales and revenue.

Overall, it is crucial for hotels in Colorado to understand and adhere to hotel tax laws to avoid these penalties and maintain a good standing within the industry.

8. Do bed and breakfast establishments need to collect hotel taxes in Colorado?

Yes, bed and breakfast establishments in Colorado are typically required to collect hotel taxes, also known as lodging taxes or occupancy taxes. These taxes are imposed on the rental of accommodations for stays lasting less than 30 days. Bed and breakfasts are considered lodging establishments that provide overnight accommodations to guests, and as such, they are subject to the same tax obligations as traditional hotels and motels. The specific rate of the hotel tax may vary depending on the location of the bed and breakfast within Colorado. It is important for bed and breakfast owners to familiarize themselves with the state and local tax laws and comply with the necessary tax collection and reporting requirements to avoid any potential penalties or legal issues.

9. Are there any special provisions for extended stay hotels in Colorado?

Yes, there are special provisions for extended stay hotels in Colorado regarding hotel tax and occupancy tax laws.

1. Extended stay hotels are typically defined as lodging establishments that cater to guests looking to stay for an extended period, usually a week or more.
2. In Colorado, extended stay hotels may be subject to different tax regulations compared to traditional hotels. This can include variations in the rates of occupancy tax applied to long-term versus short-term stays.
3. Some jurisdictions in Colorado may offer tax incentives or exemptions for extended stay hotels to encourage longer guest stays, as these establishments can bring economic benefits to the local community.
4. It is important for extended stay hotel operators in Colorado to be aware of any specific tax provisions that apply to their type of lodging to ensure compliance with state and local tax laws.

Overall, while Colorado does not have statewide regulations specifically targeting extended stay hotels, operators should research and understand any local ordinances or exemptions that may impact their tax obligations.

10. How often are hotel tax returns required to be filed in Colorado?

In Colorado, hotel tax returns are typically required to be filed on a monthly basis. This means that hotel operators must submit their tax returns every month, usually by the 20th of the following month, reporting the total taxable revenue generated from lodging accommodations during that period. Failure to file these returns on time or accurately may result in penalties and interest charges being imposed by the relevant tax authority. It is crucial for hotel operators to stay compliant with these filing requirements to avoid potential legal issues and financial consequences.

11. Are there any specific rules or regulations regarding hotel tax audits in Colorado?

Yes, there are specific rules and regulations regarding hotel tax audits in Colorado. The Colorado Department of Revenue is responsible for administering the state’s lodging tax laws, which include conducting audits to ensure compliance with tax requirements. Some important points to note about hotel tax audits in Colorado include:

1. Audit Selection: The Colorado Department of Revenue may select hotels for audit based on various criteria, such as risk assessment, previous compliance history, or random selection.

2. Notice of Audit: Hotels selected for audit will typically receive a notice from the Department of Revenue informing them of the audit and requesting documentation and information related to their lodging tax reporting.

3. Audit Process: During the audit, auditors will review the hotel’s records, including guest registration information, room rates, occupancy levels, and tax collected. They may also conduct interviews with hotel staff to gather additional information.

4. Assessment of Tax Due: If discrepancies or underreporting of taxes are found during the audit, the Department of Revenue may assess additional tax, penalties, and interest.

5. Appeal Rights: Hotels have the right to appeal the findings of a tax audit through the Department of Revenue’s administrative appeals process.

Overall, compliance with hotel tax laws and regulations is essential to avoid potential penalties and ensure that hotels accurately collect and remit lodging taxes in accordance with Colorado state laws.

12. Are there any local option hotel taxes in Colorado that hotels need to comply with?

Yes, hotels in Colorado may be subject to local option hotel taxes in addition to the state’s general lodging tax. These local option taxes are imposed by cities or counties and can vary in terms of rates and regulations. Hotel operators must be aware of and comply with these local taxes to avoid penalties or fines. Here are a few key points to consider:

1. Local option hotel taxes are typically utilized by local governments to generate revenue from the hospitality industry to fund various projects and services within their jurisdiction.

2. The rates and requirements for local hotel taxes can vary significantly between different municipalities in Colorado, so it is essential for hotel operators to familiarize themselves with the specific regulations in each area where they operate.

3. Failure to collect and remit local option hotel taxes can result in legal consequences, such as fines, penalties, and potential legal action, so it is crucial for hotels to stay compliant with all local tax laws.

In summary, hotels in Colorado may be subject to local option hotel taxes imposed by cities or counties in addition to the state lodging tax. It is imperative for hotel operators to understand and comply with these local taxes to avoid any potential legal issues.

13. Is there a separate occupancy tax in addition to the hotel tax in Colorado?

Yes, in Colorado, there is a separate occupancy tax in addition to the hotel tax. This occupancy tax, often referred to as a lodging tax or accommodation tax, is imposed on the rental of lodging accommodations such as hotels, motels, vacation rentals, and other similar establishments. The occupancy tax rate can vary depending on the location within Colorado as each municipality has the authority to impose its own local taxes. In addition to the state sales and lodging tax, many cities and counties in Colorado levy their own occupancy tax on accommodations. These local taxes typically range from 1% to 4% of the total amount charged for the lodging accommodation. It is important for hotels and accommodation providers to be aware of these occupancy tax rates and to collect and remit them to the appropriate taxing authorities in order to remain compliant with state and local laws.

14. How are occupancy taxes collected and remitted in Colorado?

In Colorado, occupancy taxes are collected and remitted by lodging establishments such as hotels, motels, bed and breakfasts, and vacation rentals. These taxes are typically added to the guest’s bill at the time of booking or check-out. The lodging establishment is responsible for collecting the tax from guests and then remitting it to the appropriate local government authority, such as the city or county where the lodging establishment is located. The frequency of remittance varies but is usually on a monthly or quarterly basis. Failure to collect and remit occupancy taxes can result in penalties and fines for the lodging establishment. Overall, Colorado has specific guidelines and regulations in place to ensure that occupancy taxes are properly collected and remitted to the appropriate authorities.

15. Are Airbnb hosts required to collect and remit hotel or occupancy taxes in Colorado?

Yes, Airbnb hosts are required to collect and remit hotel or occupancy taxes in Colorado. Here are some key points to note:

1. As of July 1, 2017, Airbnb entered into an agreement with the Colorado Department of Revenue to collect and remit state-administered local sales taxes on behalf of its hosts in Colorado.

2. Airbnb collects the 2.9% state sales tax, the 7.25% state-administered local sales tax, and any special district taxes that may apply on all eligible bookings in Colorado.

3. However, it is important to note that local occupancy tax requirements may vary by city or county in Colorado. Some cities or counties may require hosts to collect and remit additional occupancy taxes apart from what Airbnb collects on the state level.

4. Airbnb hosts in Colorado should familiarize themselves with the specific tax requirements in their local jurisdiction to ensure compliance with all applicable laws and regulations. Failure to collect and remit the required taxes can result in penalties and fines.

Overall, Airbnb hosts in Colorado are responsible for ensuring that they are in compliance with both state and local tax laws related to hotel or occupancy taxes.

16. Are there any specific requirements for displaying hotel tax information to guests in Colorado?

Yes, there are specific requirements for displaying hotel tax information to guests in Colorado. These requirements typically vary by city or county within the state. However, there are some general guidelines that apply statewide:

1. Display Requirement: Hotels in Colorado are required to prominently display information about the lodging tax rate and amount on invoices provided to guests at the time of check-in.

2. Tax Rate Information: The invoice must clearly state the applicable lodging tax rate that is being charged to the guest.

3. Separate Line Item: The hotel tax amount should be listed as a separate line item on the invoice, distinct from the room rate and any other charges.

4. Disclosure of Tax Exemption: If a guest is exempt from paying lodging taxes (such as government officials on official business), the hotel must clearly indicate this exemption on the invoice.

5. Compliance with Local Laws: Hotels in Colorado must ensure that their tax information display practices comply with all relevant local laws and regulations.

By following these requirements, hotels in Colorado can ensure transparency and compliance with tax laws while providing clear information to their guests regarding the lodging taxes they are being charged.

17. Are there any recent changes to hotel tax laws in Colorado that hoteliers should be aware of?

1. Yes, there have been recent changes to hotel tax laws in Colorado that hoteliers should be aware of. In July 2021, Colorado Governor Jared Polis signed a bill known as HB21-1319 into law, which made significant amendments to the state’s lodging tax structure. One of the key changes under this legislation is the increase in the statewide lodging tax rate from 2.9% to 7.0% effective October 1, 2021.

2. Additionally, HB21-1319 expanded the definition of lodging for tax purposes to include short-term rentals booked through online platforms such as Airbnb and VRBO. This means that individuals renting out their properties on these platforms will now be subject to the same lodging tax requirements as traditional hotels and lodging establishments.

3. Another important change introduced by this new law is the requirement for online platforms facilitating short-term rentals to collect and remit the lodging tax on behalf of property owners. This aims to streamline the tax collection process and ensure compliance across all lodging providers in the state, including those operating through online booking platforms.

4. It is crucial for hoteliers and property owners in Colorado to be aware of these recent changes to the hotel tax laws to ensure they are compliant with the new requirements and rates. Failure to adhere to the updated regulations could result in penalties and fines, so it is essential to understand the implications of the revised lodging tax laws in Colorado.

18. How does Colorado define a “lodging establishment” for purposes of hotel tax collection?

In Colorado, a “lodging establishment” is defined as any location where overnight accommodations are provided to guests in exchange for payment. This includes hotels, motels, bed and breakfasts, inns, vacation rentals, and other similar properties that offer lodging services to the public for a fee. Additionally, the definition may also encompass campgrounds and recreational vehicle parks that offer spaces for overnight camping in exchange for payment. It is important to note that each jurisdiction within Colorado may have its own specific definition of a lodging establishment for the purpose of collecting hotel taxes, so it is crucial for businesses in the hospitality industry to be familiar with the specific regulations in their area to ensure compliance with tax laws.

19. Are there any provisions for transient lodging facilities in Colorado that may impact hotel tax obligations?

Yes, there are provisions in Colorado that may impact hotel tax obligations for transient lodging facilities. In Colorado, transient lodging facilities are subject to the state sales tax, as well as any applicable local lodging taxes. Additionally, Colorado law requires transient lodging facilities to collect and remit sales and lodging taxes on room rentals to the state Department of Revenue. It is important for hoteliers and owners of transient lodging facilities in Colorado to be aware of these tax obligations and to ensure compliance with state and local tax laws to avoid potential penalties and fines. Additionally, they should stay informed about any changes in the tax laws that may impact their obligations.

20. Are there any resources or agencies available to assist hoteliers with compliance with hotel tax laws in Colorado?

Yes, in Colorado, hoteliers can turn to several resources and agencies for assistance with compliance with hotel tax laws. Some key resources include:

1. The Colorado Department of Revenue: The Department of Revenue oversees the administration and enforcement of tax laws in the state, including hotel tax laws. They provide guidance, resources, and assistance to help hoteliers understand their tax obligations and ensure compliance.

2. Local city or county tax offices: In addition to state-level regulations, many cities and counties in Colorado also impose their own hotel occupancy taxes. Hoteliers can reach out to their local tax offices for specific information on local tax rates, filing requirements, and compliance assistance.

3. Industry associations and organizations: There are various industry associations and organizations in the hospitality sector that offer resources and support to hoteliers. These associations often provide education, training, and networking opportunities to help hotels stay compliant with tax laws.

Overall, by leveraging these resources and agencies, hoteliers in Colorado can stay informed and up to date on hotel tax laws, ensuring they meet their tax obligations and avoid potential penalties or fines.