Estes Park poised to impose first-ever lodging tax

ESTES PARK – Estes Park is about to take the first steps toward forming a local marketing district to collect a lodging tax for the first time. But tourists shouldn’t worry about the tax raising room rates anytime soon.

Senate Bill 07-111, sponsored by Sen. Steve Johnson, R-Fort Collins, and Rep. Don Marostica, R-Loveland, was signed by Gov. Bill Ritter on April 19. It allows the lodging tax imposed by a local marketing district to be exempt from the 6.9 percent total sales tax limit for statutory municipalities and counties, just like for home-rule cities such as Denver and Fort Collins.

What that means to Estes Park, according to Mayor John Baudek, is that the town can finally form a marketing district that would be allowed to collect a lodging tax higher than the current sales tax cap.

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“We could have a marketing district today, that’s not a problem,” Baudek said. “But right now we’re at a cap, and we need to exceed that cap.”

Estes Park officials have proposed a lodging tax of 9.7 percent.

Before the first penny can be collected, however, 50 percent of the property owners within the proposed district must petition the town to place the question on the ballot. It would be up to the town’s voters to approve formation of the district, which would be responsible for collecting the tax.

Proceeds from the tax would be used for promotional and marketing programs that Baudek predicts would encompass the entire Estes Valley, not just the town of Estes Park.

Talks about increasing the total sales tax cap have been ongoing for what Baudek said is almost six years, back when then-Sen. Stan Matsunaka and Rep. Tim Fritz sponsored a bill vetoed by former Gov. Bill Owens in 2001.

No deterrent to tourists

One major hotel in the area isn’t worried about the proposed lodging tax deterring overnight visitors.

Scott Holm, director of sales and marketing of the Stanley Hotel, Estes Park’s most notable destination, said the tax would have “zero effect on people staying here.”

Holm is actually surprised that Estes Park doesn’t already have a lodging tax and a higher total sales tax. While the proposed lodging tax rate would reach nearly 10 percent, that is still less than Holm has seen in other parts of the country. Other states, such as Florida, Holm said, have a 10 percent tax rate, with cities imposing additional percentages on lodging.

Colorado’s sales tax rate is 2.9 percent, and Estes Park’s city rate of 4 percent brings the local sales tax to the 6.9 percent cap for municipalities not covered by home rule charters. As a home rule city, Fort Collins imposes a 3 percent lodging tax in addition to the 3 percent city sales tax, 2.9 percent state sales tax and 0.8 percent Larimer County tax – resulting in a 9.7 percent tax on lodging, equal to that proposed for Estes Park.

Estes Park is the only place Holm has worked where there hasn’t been a lodging tax, and “it’s something we (the town of Estes Park) have to have,” he said.