Mountain Village enforces newly amended Business License Ordinance

21 May Mountain Village enforces newly amended Business License Ordinance

[click “Play” to hear Kevin Swain discuss the ordinance]

Effective May 20, the Town of Mountain Village, Telluride’s sister city, will vigorously enforce its amended Business License Program Ordinance. The changes to this piece of legislation, approved unanimously by Town Council last month, specifically address homeowners renting their properties and not remitting lodging taxes collected from renters.

Over the past year, the growing popularity of vacation rental Web sites has made it challenging for the town to carry-out one of its basic functions – to collect the appropriate fees and taxes associated with doing business in Mountain Village, specifically for individuals or groups in the short-term rental accommodation business. Failure to capture this business sector is causing unnecessary revenue leakage for the town and its taxpayers.

As it stands, the town collects an annual business license fee and monthly lodging and sales tax on short-term rental accommodations. The fee is determined by the number of sleeping rooms in an accommodation unit. Of the proceeds derived from business license fees, 6% is retained by the town for administrative costs with the  balance, a whopping 94%, used for funding of visitor services and marketing. In addition, the property owner is required to collect a 4.5% sales tax and a 4% lodging tax from the renter. Of the sales and lodging taxes remitted to the town, 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.

Clearly failure to remit sales and lodging taxes and the failure to pay the business license fees by property owners directly affects the town’s ability to support marketing efforts benefiting all Mountain Village taxpayers and business owners. It also creates an unfair advantage for property owners who avoid collecting taxes and fail to obtain a business license.

To learn more, click the “play” button and listen to Mountain Village Finance Director Kevin Swain’s podcast.