Colorado Short-Term Rental Tax Overview
Colorado imposes state income tax at rates up to 4.4% on net rental income, combined with Lodging Tax + Sales Tax at 7.44%+ on gross rental receipts. 2.9% state sales tax + 4.54% state lodging tax, plus local taxes. The total tax burden for Airbnb hosts in Colorado varies by location, ranging from approximately 18.19% in Denver to 11.44% in Estes Park. Understanding the layered structure of federal, state, and local taxes is essential for compliance and accurate pricing.
This guide covers the 2026 tax year. Tax rates and rules change frequently — always verify current rates with the Colorado Department of Revenue and consult a qualified tax professional for advice specific to your situation. Federal tax obligations (Schedule E, Form 1099-K, the 14-day rule) apply in addition to all state and local taxes described below. See IRS Publication 527 for federal rental income rules.
Income Tax on Rental Income
Rate: 4.4%
Flat 4.4% state income tax rate (reduced from 4.55% in 2024)
- Net STR income (after expenses) reported on the Colorado state income tax return
- Federal Schedule E (or Schedule C if substantial services provided) is required regardless of state tax
- The 14-day rule: if you rent your primary residence 14 days or fewer per year, federal rental income is tax-free (IRS Publication 527)
- Self-employment tax may apply if you provide hotel-like services (daily cleaning, meals, concierge)
Lodging Tax + Sales Tax
Rate: 7.44%+
2.9% state sales tax + 4.54% state lodging tax, plus local taxes
What Airbnb Collects Automatically
- State sales tax (2.9%)
- State lodging tax (4.54%)
- Some county and city taxes in participating jurisdictions
What Hosts Must Collect and Remit
- City lodging tax (varies, 1.5-10.75%)
- County lodging tax where applicable
- Special district taxes (metro district, RTD, etc.)
Local Tax Rates by City in Colorado
Combined estimated occupancy/lodging tax rates including state + local components (income tax not included):
| City / Area | Local Tax Rate | Combined Rate | Registration Required? |
|---|---|---|---|
| Denver | 10.75% city lodging tax | 18.19% | Yes — STR license required |
| Colorado Springs | 2% city lodging tax | 11.44% | Yes |
| Breckenridge | 3.4% town + 2% county | 12.84% | Yes |
| Vail | 4.5% town + 1.3% county | 12.74% | Yes |
| Aspen | 2.4% city + 2% county | 11.84% | Yes |
| Boulder | 5.98% city | 12.92% | Yes — STR license required |
| Estes Park | 2% town + 2% county | 11.44% | Yes |
Deductions for Colorado Airbnb Hosts
Colorado conforms to the Internal Revenue Code as of a specific date and generally allows the same depreciation methods as federal. Colorado does allow bonus depreciation. The flat 4.4% rate means every $1,000 in deductions saves $44 in state tax. Colorado also has a partial property tax exemption for residential property that does not apply to STR investment properties. Hosts should be aware that Colorado's complex multi-jurisdictional tax system means that some local jurisdictions are "home rule" cities that self-administer their own taxes, separate from the state system.
Common Deductible Expenses
- Depreciation — Building cost over 27.5 years (IRS Publication 946); often the largest single deduction
- Mortgage interest — Deductible in proportion to rental use percentage
- Property taxes — Proportional to rental use days vs. personal use days
- Insurance — STR-specific or landlord insurance premiums
- Cleaning and maintenance — All turnover cleaning fees, repairs, and upkeep
- Supplies — Linens, toiletries, coffee, kitchen supplies for guests
- Platform fees — Airbnb host service fees (typically 3%) are fully deductible
- Utilities — Electricity, internet, water, gas proportional to rental use
- Professional fees — CPA, tax preparer, attorney fees related to the rental business
Filing Requirements and Deadlines
Registration
Required: Sales Tax License + Lodging Tax Account
Cost: $16 state sales tax license; local licenses vary
Register at: Colorado Department of Revenue
Filing Schedule
Monthly or quarterly for sales/lodging tax; annually for income tax
Key Resources
Common Colorado Tax Mistakes for Airbnb Hosts
Mistake #1
Not understanding Colorado's "home rule" tax system — Denver, Boulder, Aurora, and other home rule cities administer their own sales and lodging taxes separately from the state. You may need to register with BOTH the state and the city.
Mistake #2
Missing the 4.54% state lodging tax — this is separate from the 2.9% state sales tax and applies specifically to lodging. Many hosts only account for sales tax and miss this additional state-level tax.
Mistake #3
Not registering with mountain resort towns — Breckenridge, Vail, Aspen, and other ski towns have strict STR licensing requirements and additional local taxes. Operating without registration in these towns can result in fines and license revocation.
Colorado Short-Term Rental Regulations Beyond Tax
Colorado passed HB 1137 in 2023 requiring STR operators to register with the state and obtain a license. Many municipalities have their own STR ordinances. Denver requires an STR license ($25/year) and limits STR listings to a host's primary residence for whole-home rentals. Boulder requires an STR license and limits the total number of STR licenses city-wide. Mountain communities like Breckenridge and Vail have varying rules about STR density, noise, parking, and occupancy. Colorado is generally STR-friendly at the state level but allows significant local control.
Calculate Your Colorado Airbnb Tax
Enter your income, expenses, and select Colorado to get an instant federal + state estimate.
Frequently Asked Questions
Does Colorado tax Airbnb income?
Yes. Colorado imposes a flat 4.4% state income tax on net rental income plus a combined 7.44% in state-level occupancy taxes (2.9% sales tax + 4.54% lodging tax). Local taxes add 1.5-10.75% more depending on your city. The total occupancy tax burden can exceed 18% in Denver. Mountain resort towns like Vail and Breckenridge also have high combined rates. See the Colorado Department of Revenue and IRS Publication 527.
Does Airbnb collect Colorado taxes?
Airbnb collects and remits the 2.9% state sales tax and 4.54% state lodging tax statewide. For local taxes, coverage depends on the jurisdiction. Airbnb collects some county taxes but many "home rule" cities (Denver, Boulder, Aurora, etc.) self-administer their taxes, and hosts may need to register and remit city taxes separately. Always verify with your specific city's tax office.
What is Colorado's lodging tax?
Colorado's 4.54% state lodging tax applies specifically to rooms, lodging, and accommodations rented for less than 30 consecutive days. This is in addition to the 2.9% state sales tax. Together, the state-level burden is 7.44% before any local taxes are added. The lodging tax is collected by the Colorado Department of Revenue and is separate from any city or county lodging taxes.
Do I need an STR license in Colorado?
Colorado requires statewide STR registration under HB 1137 (2023). Additionally, many cities require their own STR licenses: Denver ($25/year, primary residence required for whole-home), Boulder (limited licenses available), and mountain resort towns each have their own requirements. You also need a Colorado Sales Tax License ($16) from the Department of Revenue. Register at tax.colorado.gov.
Why is Colorado STR tax so complicated?
Colorado's complexity comes from its "home rule" system, where over 70 cities self-administer their own sales and lodging taxes independently from the state. This means a host in Denver might need to file with the state AND the city separately. Additionally, special district taxes (RTD, Scientific & Cultural, Football District) layer on top of state and city rates. The result is one of the most fragmented tax systems in the country for STR hosts.