Housing shortage spurs short-term rental tax proposals

Colorado, Hawaii and Washington are eyeing tax tweaks.
A person stands in front of the Pacific Ocean at The Cliffs at Princeville resort on Kauai, Friday, March 5, 2021, in Princeville, Hawaii. (AP Photo/Caleb Jones)

Under pressure to address housing shortages in vacation towns, Democratic lawmakers in several states proposed bills this year that would raise taxes on short-term rentals or use the tax code to nudge short-term rental owners to take on long-term tenants.

Legislators in states such as Colorado, Hawaii and Washington are eyeing tax tweaks as they try to balance the tourism-boosting benefits of short-term rentals with the costs to resort communities, such as increased emergency calls and pressure on limited local housing stock.

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