Denver Lodging Tax - AirBNB

7 Replies

We all know about Denver's Lodging Tax and that it must be collected and paid and that short term rentals have to be licensed in Denver for this purpose.

All of the platforms - AirBNB,VRBO, etc - collect this tax on the host's behalf and send it to the City.

As a tax pro, I have probably 20 clients who have short term rentals in Denver and things are just seamless.  No issue, no hassle.

However, I have ONE client that the city seems to have a real hard on for.  The represenetative from the City tells me and my client that he has to send in a report each and every quarter to report the total amount of lodging collected, then show that AirBNB has already sent it in and then send in a $0 report.

Is anybody else in Denver getting this request?  

Hey Linda, I receive the same request from the City of Denver on a quarterly basis, and as a matter of fact I also make the payment. Are you sure Airbnb is collecting it and that we (hosts) don't need to pay it? I know the platform collects many different taxes from guests but I'm not sure about this one. Happy to hear how others see it.

Originally posted by @Dan Barr :

Hey Linda, I receive the same request from the City of Denver on a quarterly basis, and as a matter of fact I also make the payment. Are you sure Airbnb is collecting it and that we (hosts) don't need to pay it? I know the platform collects many different taxes from guests but I'm not sure about this one. Happy to hear how others see it.

Here's what AirBNB has to say about it directly:

 

So this seems to indicate that you only have to file and pay if you're renting outside of AirBNB.

@Linda Weygant

My understanding was also that Airbnb collects and remits the Denver hotel tax in aggregate. That is, they dump a lump sum with the city, so that no individual STR owner is tied to any particular amount. Do you know something different?

Originally posted by @James Carlson :

@Linda Weygant

My understanding was also that Airbnb collects and remits the Denver hotel tax in aggregate. That is, they dump a lump sum with the city, so that no individual STR owner is tied to any particular amount. Do you know something different?

 Well, I went round and round with this City of Denver agent who told me that my client needed to file not only a lodging tax return, but also a self employment form (Head or OPT Tax) for City of Denver.  She pointed me to guidance on the City of Denver website and it does appear that somewhere between the time I first researched this and earlier this year, changes were made such that the following are now necessary:

1.  Hosts must file a Lodging Tax return.  If the platforms they use collect and remit the tax, then you indicate that on the form and file a $0 return.  But the return is definitely required and they'll hassle you and charge a $25.00 late charge for not filing.

2.  City of Denver is taking the position that hosts are "running a business" in City of Denver and, as such, are required to pay a $4.00/month OPT (Head) Tax.

I don't know when these changes were made and how I missed the notifications, since I'm signed up for alerts from the City of Denver.  It was also pretty embarassing to be proved wrong when I was so certain I was right, but not the first (and probably not the last) time that's the case.  The worst part was when I told the tax agent that I have "many" clients in this same scenario and none of them were being asked for this.  Her reply was "well, not yet..."

So this is yet another thing to put on my list for my AirBNB clients in City of Denver.  I'll be looking out for this and getting my clients compliant over the next few months. 

@Linda Weygant

Interesting. I know they made some changes in late 2019 and are about to pass some new regulations of the platforms themselves. I tend to think short-term rentals and Airbnb need regulation, and I'm no hater on government, but it does seem like Denver is intent on making it difficult for STR hosts.