The city of Aspen has hired a Virginia firm to search the Internet for locals who offer their homes as vacation rentals but are not paying lodging and sales taxes.
So far, VR Compliance has identified 40 or 50 local properties that are being rented but do not appear to be registered with the city, Aspen finance director Don Taylor said.
In March 2012, City Council changed the rules regarding vacation rentals. Prior to the change, homeowners in most Aspen neighborhoods were only allowed two short-term rentals a year, defined as rentals of less than 30 days, but the limit was never enforced. So council allowed everyone unlimited vacation rentals, as long as property owners got a business license, paid sales and lodging taxes on short-term rental revenues, and designated a local representative who could respond to problems with trash, parking and unruly guests. Sales and lodging taxes come to just over 11 percent on tourist accommodations, with many luxury homes in Aspen going for thousands of dollars a night.
Since the change, only about 10 new business licenses have been handed out for short-term rentals, Taylor said.
But in February the city and VR Compliance of Leesburg, Va. agreed to a contract that has VR Compliance search the web for Aspen vacation rental properties, and cross check those rental addresses with city tax records.
The city is paying VR Compliance $100 a month for its efforts, plus $100 per property it finds that is not paying taxes, according to the contract.
The city will follow up on the potential non-compliance hits, Taylor said. In some cases, the non-compliant properties identified may actually be in compliance, but came up because of a discrepancy in the name on the property record or the city tax record.
“There may be an explanation for a few of them,” Taylor said.
Last year, Taylor estimated that the city may be losing out on as much as $100,000 a year in lost revenue from short-term rentals that don’t pay taxes.