Colorado – Sales Tax on Home or Vacation Rentals

SALT Report 1638 – The Colorado Department of Revenue issued guidance regarding the sales tax collection requirements for home and vacation rentals.  If you rent a house or condominium to someone for less than 30 days then you are required to collect sales tax on that rental. These rentals may also be subject to county lodging taxes or local marketing district taxes.
Reselling Rooms
If you sell rooms to an out-of-state travel agency, sales tax is due from the local owner or manager even if the out-of-state travel agency is reselling some or all of the rooms to the user or another travel agency.
License and Deposit Requirements
Anyone wishing to rent their home or condominium is required to obtain a Colorado sales tax license and collect and remit sales tax.  In addition to the license fee, all Colorado sales tax license holders are required to pay a one-time $50 state sales tax deposit at the time they apply for the license.
The $50 deposit will be refunded after $50 in state sales tax is remitted to the Colorado Department of Revenue. The $50 deposit will be refunded automatically six to eight weeks after the total state sales tax paid reaches $50. You should not deduct the $50 deposit from any sales tax return filed. Doing so would result in non-filer status and deficiency notices.
If you stop renting your vacation home or close your sales tax account before you collect and remit $50 in state sales tax you may file a Claim for Refund (form DR 0137) with the Department for the remaining deposit amount.
Filing and Remittance Requirements
Once you have applied for your sales tax license the Department will send you a Combined Retail Sales Tax Return DR-0100 and a County Lodging Tax Return DR-1485.  In the event you do not receive these tax return forms it is your responsibility as the Taxpayer to contact the Department or download the forms from the Department’s website. Failure to receive these forms does not relieve you of your responsibility to pay the taxes.
If the amount of sales tax collected is under $300 each month you must file your tax return and remit any collected taxes on a quarterly basis. If the amount of sales tax collected is more than $300 each month then you are required to file your return and remit any taxes on a monthly basis.
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