Revenue is up for the town of Dillon. In its first quarter report, the town is $1.5 millon ahead of where it was in 2021. Bumps in revenue from sales, hotel and lodging taxes all played a part.
In particular, revenue is up from lodging tax just as the town plans to continue its discussion of a short-term rental tax. Through March of each year since 2018, revenue from lodging tax is as follows, according to the town’s finance reports:
- In 2018: $80,000.
- In 2019: $84,000.
- In 2020: $88,000.
- In 2021: $111,000.
- In 2022: $186,000.
The roughly $75,000 jump from 2021 to 2022 alone was an increase of 67%. Town Finance Director Carri McDonnell said this could be attributed to a sharp increase in the number of lodging applications. Since last September, short-term rental licenses in Dillon increased from 242 to 367, or about 52%.
In addition, the town also has a new hotel, the Homewood Suites by Hilton. Hotels made up 53% of lodging tax revenue, whereas short-term rentals made up 47%.
The jump in lodging applications has led the town to hire more staff, McDonnell said.
“We’ve definitely increased the staffing needs at town hall because we are processing so many more short-term rentals and doing more enforcement and more review,” she said.
She said licenses have been rising since this past fall, when the town first discussed regulating short-term rentals. She said she thinks renters are trying to get ahead of a hypothetical moratorium on short-term rentals. McDonnell added lodging licenses are renewed yearly, and renters would not necessarily be grandfathered into any limits put in place by the town.
The town plans on continuing its short-term rental conversation at its work session Tuesday, and it will look at findings from Frisco and Silverthorne. Frisco voters approved a 5% excise tax on short-term rentals in April on top of other taxes imposed on lodging, and in the same month Silverthorne voters approved a lodging tax increase from 2% to 6%.
Dillon has a few restrictions in place for its short-term rentals, but no excise tax. Renters can pay $250 a year to get a short-term rental license. In a memo last November, the town reported about a quarter of its housing units listed as short-term rentals.
Currently all lodging is subject to an 8.875% sales tax and 2% lodging tax. Sales tax is split between the state, county transit, housing 5A, county and town. Lodging tax is paid by the party staying at the condo, hotel or home for less than 30 days.
In the umbrella above lodging tax, town revenue was at almost $3.5 million in its first quarter, whereas 2021’s was at just under $2 million.
Sales tax received from hotel stays was up 126% for the month of February, and 73.6% for the year through February. The total revenue was over $160,000 for January and February, when at the same time last year it was just over $100,000.
Lodging tells a similar story. Sales tax from lodging was up 69.5% for February, and 60.8% for the year through February. Revenue topped $100,000 for January and February, whereas it was at $60,000 last year.
Restaurant sales tax rose for the first time since 2018. It dropped from just under $250,000 in 2018 to under $150,000 in 2021 and rose this year to over $150,000.
While revenue may be up, expenses have increased too, but revenue is currently outpacing expenses. Overall, expenses are up $282,270 or 20.6%.
All departments’ expenses are up due to increases in pay and associated benefits according to the quarterly report, a step McDonnell said was taken to keep the town’s jobs attractive and retain workers.