Everyone wants their piece of the pie in Clear Creek County.
The problem is there’s just one slice and both Georgetown and the county say it’s theirs for the taking.
The standoff just up the hill from Denver comes in the form of a 2% lodging tax that Clear Creek County and the quaint mountain town of 1,100 residents, a short exit ramp off of Interstate 70, are each collecting from hotels, bed and breakfasts and short-term rentals.
Georgetown says the county needs to rein in its taxman following November’s election, when voters passed a lodging tax the town says is designed to replace Clear Creek’s levy starting on the first of the year. It points to a state statute that permits Colorado counties to collect taxes on visitor stays with the proviso that “no tax shall apply within any municipality levying a lodging tax.”
But Clear Creek County insists Georgetown voters didn’t pass a lodging tax per se, but an occupation tax on rooms or homes for rent, which it argues is distinct from the county’s tax and not an act of “double taxation.”
“The county tax remains in force and remains collectible, just as it has been since its adoption in 1990,” said county manager Brian Bosshardt. “It continues to be collected by the Department of Revenue; it remains on the Department of Revenue forms and has never been removed from those forms.”
A Department of Revenue spokesman told The Denver Post the agency has no comment “on an issue between two local governments.”
The as-yet-intractable deadlock has put folks like Jaime LaCrosse, owner of Rose Street Bed & Breakfast in Georgetown, in a tough spot. She is now charging a total 14.05% levy to customers, which accounts for various sales tax obligations to the state, county and town.
It also includes the 2% lodging tax — paid twice, once to Georgetown and once to Clear Creek County — even though an analysis accompanying the ballot assured voters that Georgetown’s tax “replaces the current 2% lodging tax that is currently collected by the county.”
“It’s frustrating for sure,” said LaCrosse, whose four-room bed and breakfast sits at the base of the road that winds and climbs more than 3,000 feet to Guanella Pass. “I don’t believe they should both be able to tax. Clear Creek County refuses to step back and the town refuses to step back. They both want the money.”
Rick Keuroglian, Georgetown’s town administrator, projects the town will take in around $225,000 annually from the lodging tax. There are around 100 licensed short-term rentals and a handful of hotels and bed and breakfasts in Georgetown.
“The county is refusing to stop collecting and it puts our vendors in a very awkward situation,” Keuroglian said.
In other Colorado cities and towns that have imposed their own lodging taxes, like Winter Park and Telluride, Grand and San Miguel counties respectively dropped their taxes, he said. Last year, Telluride residents voted to remove the countywide 2% lodging tax and replace it with a town tax on rooms rented for 29 days or less, according to reporting from the Telluride Daily Planet.
Georgetown is the only community left in the state that operates under a territorial charter — a governance structure that precedes the creation of Colorado as a state in 1876. That gives Georgetown home rule powers, Keuroglian said.
“Everybody is frustrated because the county will not stop collecting,” he said. “It’s a funky situation that we hope can get resolved before it goes to litigation.”
But if this week’s Georgetown Board of Selectmen meeting was any indication, a lawsuit could be on the horizon. Town leaders held a closed-door executive session Tuesday evening to “receive legal advice and instruct negotiators concerning pending litigation: lodging tax.”
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Colorado Municipal League Executive Director Kevin Bommer said he hasn’t seen a stalemate like the one currently playing out in Clear Creek County. But his sympathies lie with Georgetown.
“I think the statute is clear — if a municipality passes a lodging tax, the county is prohibited from passing theirs,” he said. “If it walks like a duck and talks like a duck…”
Sharon Rossino, a real estate broker who manages short-term rental properties in Georgetown, said the town — less than an hour from Denver — is attractive to families with tighter budgets who want to avoid the pricier proposition of vacationing in Summit or Eagle counties.
But layering tax upon tax is not going to help Georgetown accommodation owners pull motorists off of I-70 as they head up to the Eisenhower tunnel and over the Continental Divide, she said.
“Nobody wants this to drag on or become a legal battle,” Rossino said. “But many in the short-term rental community believe visitors are now being taxed twice and that’s unfair. Another increase in tax deters more and more people — it all adds up.”
