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By: Nick Richards and Keith Buckley

The hospitality industry and Online Travel Companies (OTCs) are currently under fire from taxing authorities in regards to uncollected lodging/occupancy taxes. The Supreme Court of Colorado recently ruled in City & County of Denver v Expedia, Inc. that OTCs were required to collect and remit Denver’s Lodger Tax. The ruling was based on OTCs being vendors that sell lodging within Denver.

The impact of the Court’s ruling on OTCs and similar lodging taxes, however, may be difficult to interpret and apply to other jurisdictions in Colorado. Colorado is a ‘Home-Rule’ state and local municipalities may set and collect their own taxes. The ruling such as the Court’s become more challenging for businesses in municipalities where confusion continues regarding when and how to collect taxes. Therefore, the impact of the Court’s ruling and how it affects similar cases in Colorado remains unclear.

In the hospitality industry tax obligations are endless. Across Colorado, taxes such as Sales & Use Taxes and Lodging Taxes vary based on which ‘Home-Rule’ city your business operates in. For the hospitality industry, this creates varying lodging/occupancy taxes that are difficult to interpret and follow. With short-term rentals becoming more prevalent, through sites such as Vacation Rentals By Owners (VRBOs) and Airbnb, remaining compliant has never been harder.

Understanding hospitality taxes in Colorado’s home-rule cities is a daunting task. Failure to do so may result in crippling tax obligations that may be difficult to overcome. At Dill Dill Stonbraker & Hutchings PC, our tax attorneys can help you understand the local tax rules to ensure your business is compliant.

For more information or inquiries, please reach out to us at (303) 777-3737 or e-mail us at info@dillanddill.com.