Colorado House Bill 1247 proposes to expand the allowable uses of a county lodging tax and to increase the maximum amount of such a county lodging tax, subject to local voter approval. 

The bill was introduced in January, was amended several times, and has passed both the House and Senate. If enacted into law, this bill, as currently drafted, would allow a county board of commissioners to propose a lodging tax of up to 6% for approval by the affected local voters. 

However, any such county lodging tax that might be approved by Larimer County voters would be largely limited within the Estes Valley.

Larimer County does not currently levy a lodging tax, even though current law allows any county to levy a lodging tax up to 2% of the “purchase price” paid for rooms or accommodations less than 30 days (per Colo. Rev. Stat. § 30-11-107.5). 

There are thirty-five counties that do levy a lodging tax, most set at 2% as allowed by this statute as currently in force, but Larimer County is not one of them. 

Larimer County does have a 0.8% sales tax, which is also applied to lodging less than 30 days, as is the State of Colorado’s 2.9% sales tax, but neither is technically a lodging tax.

However, this is one of the statutes that HB25-1247 proposes to revise, changing the 2% limit to 6%, and adding two new allowed purposes for use of such tax revenues: (1) public infrastructure maintenance or improvements, and (2) enhancing public safety measures by funding local law enforcement, fire protection services, and emergency medical services.

Our Estes Park Local Marketing District, which operates under the name Visit Estes Park, was created in 2008 when voters approved ballot initiative 5D, with a tax rate of 2% per ballot initiative 5E.  

At that time such tax revenues could be used only for advertising and marketing local tourism. The tax rate was increased by 3.5 percentage points for a total of 5.5% in November 2022 when voters approved ballot initiative 6E, which for the first time allowed such tax revenues to also be used for housing and childcare for the tourism-related workforce, including seasonal workers, and for other workers in the community. 

Our organization, the Estes Valley Short-Term Rental Alliance – EVSTRA – supported the 6E ballot initiative because of this expanded allowed use of tax revenues. VEP is one of six local marketing districts in Colorado, the others being Alamosa County, Gunnison County, Moffat County, Steamboat Springs, and Vail.

This statute § 30-11-107.5 includes a provision that such a county lodging tax does not apply “within any municipality levying a lodging tax.” However, the Town of Estes Park does not levy a lodging tax. Rather, our local marketing district levies the lodging tax per Colo. Rev. Stat. § 29-25-112. 

Thus, Estes Park is not “a municipality levying a lodging tax,” and this clause does not provide any relief from a county lodging tax within the Town of Estes Park. Similarly, VEP is not a municipality as defined in the statute, so also cannot be a “a municipality levying a lodging tax”. 

But there is a “cap clause” in § 30-11-107.5 that potentially limits the amount of a county lodging tax:

(3)(b)(II) If any additional lodging tax or statewide tax on lodging facilities is enacted or levied after January 1, 1987, which in combination with the lodging tax authorized by this section exceeds six percent, the tax under this section shall be reduced by that amount that the total tax exceeds the six percent maximum specified in subsection (1) of this section.

Colo. Rev. Stat. § 30-11-107.5(3)(b)(II) (as such would be revised by HB25-1247).

Because of this 6% cap clause, and because the lodging tax rate within the Visit Estes Park local marketing district is already 5.5% (and was enacted after January 1, 1987), any levied Larimer County lodging tax would be reduced to one-half percent within the Visit Estes Park local marketing district. 

In other words, any lodging tax levied by Larimer County, even if approved by the voters, would be limited to a 0.5% tax rate within the boundaries of the Visit Estes Park local marketing district.

The same result would occur even if HB25-1247 fails to become law and Larimer County were to levy a lodging tax up to the existing 2% maximum county lodging tax rate; the effect within the VEP boundary would be limited to a 0.5% county lodging tax rate.

As of this writing, HB25-1247, as amended by both the House and Senate, has passed both chambers, and indications are that it will likely be signed into law. 

If so, and even if Larimer County enacts a county lodging tax that local voters approve, the effect within the Visit Estes Park local marketing district will be limited to a maximum of a one-half percent additional lodging tax.

DISCLAIMER:  This is not a legal opinion, and I am not a Colorado attorney.