The Crested Butte News Serving the Gunnison Valley since 1999
Exploring alternatives with short-term rental fees
By Kendra Walker
The Mt. Crested Butte council has recently held several work sessions regarding a potential ballot measure to raise the town’s excise lodging tax on short-term rental (STR) guests as a way to increase financial opportunities in the town’s community housing fund. While the council is interested in exploring the potential ballot measure, they still have some reservations regarding an excise tax increase versus alternative approaches, such as implementing an STR impact fee.
Mt. Crested Butte voters had previously approved a raise to the town’s lodging excise tax from 2.9% to 4.9%, which took effect in January 2025. Combined with sales and other local, regional and state taxes, STR guests pay a total tax of 18.8% on vacation rentals and hotel stays in Mt. CB.
Council member Steve Morris noted that the previous increase passed by 74%, suggesting the town could have proposed a higher percentage and voters may approve another increase. “I’m not getting an overwhelming pushback from anybody I’ve talked to yet,” he said. He emphasized that the town’s housing fund is depleted and will likely remain so until 2028 due to paying off direct loans related to the Homestead affordable housing project.
In 2025, the town’s excise tax collected $2,509,000 for the housing fund. If voters approved an increase to 6.9%, the town estimates collecting approximately $5 million in 2027. A 9% increase would collect approximately $6 million. Town clerk Tiffany O’Connell said that Mt. Crested Butte’s excise tax is on the lower end compared to others in the state. However, if the town’s excise tax increased to 9.9%, then Mt. Crested Butte would have the second highest STR sales tax in the state at a total of 23.8%.
“I think there’s also a gap in being able to find ways to help people with these dramatic cost of living increases. So for me, if this did go on the ballot, I would like to see the funds allocated in two separate channels,” said Morris, suggesting a possible community fund in addition to the town’s housing fund. “That could create funds that could be available for cost-of-living subsidies for individuals.”
But Morris also wondered if a higher excise tax would impact tourism. “My concern is hitting a tipping point where we lose retention of guests coming back for a second visit. I’ve been digging and there isn’t anything tangible that I can find that shows these declines associated with tourism taxes, lodging tax increases, resort fees,” said Morris.
Council member Bruce Nation expressed interest in Aspen’s model, which charges 5% for owner-occupied STRs and 10% for non-owner-occupied units, along with a lodge exemption.
“I’m more interested in how we limit this to things outside of the DDA (Downtown Development Authority),” he said. “Whether or not we choose to raise the excise tax, I will still be down to explore removing the excise tax or lowering it for places that are in the DDA or places that are lodges.”
There are currently 743 active short-term rental licenses in the town of Mt. CB. The DDA includes 986 short-term rental (STR) units and hotel rooms, with 469 STR units, 228 units at the Grand Lodge and 262 units at the Elevation Hotel. However, O’Connell said some of those Grand Lodge and Elevation units may currently be leased as long-term rentals. The Elevation is also undergoing renovations as part of its Beckwith rebrand and is expected to have 188 condominium and hotel room units upon completion. She suggested the town revisit its licensing exemptions for traditional lodges like the Grand Lodge, now that so many of the units are managed independently and no longer required to short-term rent.
“That might be the right place to draw the line, because if you’re required to short-term rent then maybe you have a lower excise tax,” said Nation. “I don’t like connecting the hotels when we’re trying to fix a problem that’s caused by short-term rentals.”
The council also recognized that it may be difficult to get support for a lodging tax raise given the community had just seen a similar ballot measure. “I’m just concerned about doing it a little bit too soon. I just think right now to try to push this for this November, it’s a really tough environment to do that,” said council member Bobbie Sferra, noting rising gas prices and other taxes weighing on people. “But I also feel we need to do more to help people get affordable housing for the workforce.”
Other ideas to generate housing funding
Council members also discussed the idea of a tiered STR licensing fee system, separate from excise tax, based on factors such as unit size, bedroom count and owner occupancy. They also suggested capping the number of STRs that one person/entity can own.
They also expressed interest in pursuing a short-term rental impact study and resulting STR impact fee, similar to what the town of Telluride has implemented. Telluride based its STR impact fee on a study of the economic impacts between STR guest spending and the number of jobs and employee households supported in the local economy by that spending.
Additionally, the council weighed the option of a second home tax on non-primary residences, a ballot measure the town of Crested Butte considered in the past and has recently revisited as a potential avenue to support revenue shortfalls, as recently reported in the Crested Butte News. The council recognized extensive research and community input was needed if they were to consider that ballot measure.
“I’d like to learn more,” said council member Valeda Scribner. “Is it realistic to actually have multiple towns work together on a certain specific initiative if we want to accomplish the same objectives and ease the burden of development and research? I’d love to talk to the town and see what’s evolving for them given the fact that they have been talking about this for years and maybe we can understand from other communities that are exploring this.”
“I think if we want to put this on the ballot, we should really try to work with the town of CB to make them as similar as they possibly can so that it’s not confusing anybody,” said Nation.
The council requested a work session specifically to discuss a second home tax, and asked staff for more info on a potential impact study including number estimates comparing the potential excise tax increase versus the potential revenue from an impact fee.
“I’m not a super fan of increasing the excise tax when I feel there’s other levers more directly related to the outcome,” said Scribner.
To place a measure on the November ballot, the council must approve final ballot language by early September.
