Colorado short-term rental taxes — local lodging tax, Denver rules, and ski-country regulations

State-level registration and permitting — local authority, no state program

Colorado has no statewide short-term rental permit program — regulation and permit requirements are entirely local (city and county). That said, STR hosts must register with the Colorado Dept of Revenue to collect and remit Colorado state sales tax on rental income. For Denver specifically, registration runs through mydenverlicense.com; for all other jurisdictions, use the Colorado Dept of Revenue portal.

City-level permit requirements vary significantly. Denver requires an annual STR license ($25/year) with a primary-residency requirement — the host must live in the property as their primary residence. The address and license number must be displayed in all listings, and Airbnb requires a valid Denver license number before a listing can go live. Boulder also has a primary-residency requirement with stricter limits on non-primary STRs. Summit County (covering Breckenridge, Frisco, Dillon, and surrounding ski communities) has been particularly active — the county has passed multiple STR registration and licensing rules in response to severe workforce housing shortages. Vail requires STR registration, as do Aspen / Pitkin County (with unique restrictions within the Aspen urban growth boundary) and Telluride. Each of these mountain communities has its own local rules, and all are evolving rapidly.

Colorado's "Land Use" bill (SB 23-213, 2023) addressed housing density broadly and has had downstream effects on how some municipalities approach STR zoning, though cities retain substantial local regulatory authority. Unlike Arizona and Florida, Colorado has not enacted a statewide STR preemption law limiting cities' ability to restrict short-term rentals.

State-level taxes — 2.9% sales tax and 4.4% income tax

Colorado applies its 2.9% state sales tax to short-term lodging income. This is one of the lower state-level tax rates on STR income in the country — the significant tax load in Colorado comes from city and county add-ons. Register with the Colorado Dept of Revenue and file Form DR-0100 (Retail Sales Tax Return). Note that Colorado also has a sales tax collection obligation for local/county/city taxes, but most Colorado jurisdictions use home-rule city authority with their own tax systems that operate separately from the state DOR — meaning state DR-0100 filing does not satisfy your city obligation.

Colorado has a flat 4.4% state income tax effective for 2023 and beyond (reduced from 4.55% under SB22-234). Rental income is taxable in Colorado — report on Colorado Form DR-0104. Colorado broadly follows federal tax treatment, so Schedule E passive rental income from your federal return flows through to Colorado. Colorado has no state-level equivalent of the federal self-employment tax. If you operate your STR through an LLC, note that Colorado's income tax still applies at the individual level on your share of rental income.

Common city and county taxes — Denver, Boulder, and ski-country rates

Colorado STR hosts face stacked tax obligations: the 2.9% state sales tax plus city and county layers that vary widely by jurisdiction. Denver's approximately 14.25% combined rate breaks down as roughly: Colorado state 2.9% + Denver city sales tax 4.81% + Denver county lodger's tax 10.75% — though layers stack and the precise breakdown depends on the specific tax codes in effect. Home-rule cities collect their own sales taxes independently from the state, so Denver and Boulder each have their own portals, rates, and registration processes entirely separate from the Colorado DOR.

Beyond registration, remember that home-rule cities in Colorado handle their own tax accounts — Denver uses its own online tax portal at Denver.gov/business, separate from the state DOR. You may have three or four separate filing obligations depending on your market: state DOR, city, county, and any special district. Build a compliance calendar that tracks each one separately — their deadlines, portals, and account numbers are all distinct.

What Airbnb and Vrbo collect automatically in Colorado

Airbnb collects and remits Colorado state sales tax (2.9%) and has collection agreements with many Colorado jurisdictions including Denver, Boulder, and several resort counties. For Denver bookings, Airbnb collects both the city sales tax and the lodger's tax as well. Vrbo also collects in many Colorado markets — verify current specifics on Vrbo's tax collection help page. If you list on both Airbnb and Vrbo, check coverage on each platform separately — Colorado coverage can vary between them, and a jurisdiction covered by one may not be covered by the other.

Even where Airbnb collects all applicable taxes, you must still maintain your own Denver sales tax license (or whichever home-rule city you're in) — Denver requires hosts to hold an active license even when Airbnb is remitting on their behalf, and you may need to file zero-liability returns with the city. Denver's STR ordinance also requires the STR license number to be listed on all Airbnb and Vrbo listings — the platform requires this for Denver listings to remain active. Direct bookings are fully your responsibility for all tax layers.

Filing schedule and where to file

Colorado state sales tax (DR-0100): file monthly if state tax exceeds $300/month, quarterly or annually for lower-volume operators. File through the Colorado DOR's Revenue Online portal at colorado.gov/revenueonline. Denver city tax must be filed separately with Denver's Office of Finance — Denver uses its own online portal at Denver.gov/business, and most active STR hosts file monthly. Each county and local jurisdiction in Colorado has its own filing process and frequency — most require monthly or quarterly remittance. There is no unified Colorado STR filing portal.

Colorado income tax (DR-0104) is annual, due April 15. Rental income from Schedule E flows to Colorado Form DR-0104. STR license renewal is annual in most Colorado cities — Denver typically renews in January. Build a calendar that tracks separate due dates for state DOR, city, and any county filings — they don't share deadlines, and missing one doesn't give you any notice from the others.

Penalties for non-compliance

Colorado state sales tax non-payment: penalty of 10% of unpaid tax (per DR-0100 penalty schedule); interest at approximately 9% per year (subject to change — verify current rate with the DOR). Unlicensed operation in Denver and other cities: fines can reach $999 per day in Denver. Airbnb removes non-compliant Denver listings that lack valid STR license numbers from the platform, making enforcement more automatic than in many other markets. Resort-market jurisdictions — Summit County, Vail, and others — actively investigate and fine unlicensed operations, particularly given the housing affordability concerns that have made STR enforcement politically popular in those communities.

Home-rule city tax non-remittance penalties generally mirror the state structure: approximately 10% of unpaid tax plus interest. If you discover a past compliance gap — an unregistered period, unreported income — contact the relevant authorities proactively. Most Colorado jurisdictions have voluntary disclosure programs that reduce penalties for hosts who come forward rather than waiting to be audited.

Recent rule changes — 2024–2026

SB 23-213 (2023) — Land Use bill: While primarily focused on housing density, this bill touched on local governments' land use authority and has had downstream effects on how some Colorado municipalities approach STR zoning and neighborhood-level restrictions. Denver STR license enforcement tightened (2023–2024): Denver's Community Planning and Development office increased enforcement, resulting in removal of non-compliant listings from platforms. Denver also strengthened its data-sharing and license verification agreement with Airbnb in 2024. Mountain community tightening: Breckenridge, Frisco, and Vail-area communities added or tightened STR regulations — including primary-residency requirements and permit caps — in response to housing shortages that have made STR regulation politically popular in resort communities.

Colorado income tax rate change: Colorado reduced its flat income tax rate from 4.55% to 4.4% effective for tax year 2023 under SB22-234. This was an across-the-board reduction that benefits STR investors with profitable operations. The change is now fully in effect but is worth noting for hosts who calculated projections under the prior rate. Mountain-market regulation is expected to continue tightening through 2026 as housing affordability remains a dominant political issue in resort communities.

Frequently asked questions