Mountain Village amends business license ordinance

11 Apr Mountain Village amends business license ordinance

[click “Play”, Kevin Swain explains the new ordinance and the reasons for it.]
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Telluride’s sister city, the Mountain Village is amending its business license ordinance to close lodging tax loopholes. Why all the fuss and bother? Dodgers – and we don’t mean the baseball team. Nonpayment of sales taxes and business license fees creates an unfair advantage for property owners avoiding payment. Their malfeasance also affects the town’s ability to operate and support marketing efforts that benefit all Mountain Village taxpayers and business owners.

Like many Colorado municipalities, the Town of Mountain Village collects a business license fee and lodging tax on short-term rental properties. Faced with a tsunami of vacation rental by owner websites, however, the task of collecting appropriate fees and revenues from short-term property rentals has become challenging. In addition to sales tax, the town collects a 4% lodging tax. Of that 4%, half is invested in marketing the region with many of the initiatives undertaken by Marketing Telluride, Inc. The other 50% is contributed to the Airline Guarantee Program, administered by the Telluride Montrose Regional Air Organization. Of the proceeds derived from business license fees, 6% is retained by the town for administrative costs with the remaining balance used for visitor services and marketing.

Last month, Town Council received a report from staff outlining the issue and their recommendation for best approaching and managing the avoidable shortfall expeditiously.

The Mountain Village is in the midst of making some significant changes to its business license legislation, enforcement policies and collection practices. In addition, the town’s Finance Department is taking specific actions to stiffen penalties and sanctions for non-compliance. These actions level the playing field for competing businesses that do comply with the laws of the land, and also generate much needed data useful in the planning process.

 As part of this amendment process, Council approved a first reading of changes and additions to the town’s Business License Ordinance at its March 18 meeting. The Town Council will once again review this ordinance at its Tuesday, April 20 meeting on second hearing. If approved, the ordinance and all the laws contained therein go into effect 30 days after approval.

Major ordinance changes to date include newly added business license compliance terms for short-term residential property rentals; the elimination of the 15-day rental exception in order to be consistent with the Town of Telluride; the need for a business license before a person is able to advertise their short-term rental; and the requirement to file an annual report for short-term rentals.

To review a draft of the complete ordinance, visit www.townofmountainvillage.com/businessordinance.

For further information, click the “play” button and listen to Mountain Village Finance Director Kevin Swain’s podcast.