Why is the Town of Gypsum considering a local lodging tax again?

The Town of Gypsum is considering asking voters to approve a municipal lodging tax that would replace the existing 4% Eagle County lodging tax collected on hotel rooms and other overnight accommodations within Gypsum. The goal is for tax dollars generated within Gypsum to be utilized and controlled locally rather than by the county. This allows lodging taxes to benefit Gypsum residents and businesses directly while helping offset the impacts of increased visitation by hotel and short-term rental guests.

Why is the Town considering this now?

A 124-room Echo Suites Hotel by Wyndham is currently under construction and is scheduled to open in 2027. Another 140-room Hampton Inn / Home2 Suites has recently received its building permit. Both hotels should be open and operating in Gypsum near Costco within the next two years. With both hotels opening, Gypsum’s lodging tax revenues are projected to increase significantly. Town Council and staff believe this presents an important opportunity to keep those revenues local and invest them in infrastructure projects and initiatives that will benefit Gypsum’s residents and businesses.

Would this create a new tax?

No. The proposal would replace the existing Eagle County lodging tax, which was increased to 4% in 2025, with a Town of Gypsum lodging tax at the same tax rate. Visitors would pay the same amount in lodging taxes—the difference is that the revenue generated in Gypsum would stay in Gypsum.

Who pays the lodging tax?

The lodging tax is paid by people staying overnight in hotels, motels, vacation rentals and other lodging. Gypsum residents would not pay the tax unless they choose to stay in local lodging accommodations.

Will STR users pay this tax?

Airbnb, VRBO and other short-term rentals (STRs) are supposed to pay the Eagle County lodging tax when rentals are less than 30 days. Those payments should be transferred to Gypsum if the Town’s ballot measure passes.

How is the current Eagle County lodging tax used?

Eagle County currently collects a 4% lodging tax in Gypsum. State law requires 10% of county lodging tax revenues to be used for tourism advertising and marketing. The remaining revenues are dedicated to purposes approved by county voters, including affordable housing, childcare and public safety.

Why doesn't the Town receive lodging tax revenues?

When Eagle County adopted its lodging tax, Gypsum did not have its own voter-approved lodging tax in place. Under state law, the county tax therefore applies within the Town. Several neighboring communities—including Vail, Avon, Eagle and Basalt—already had municipal lodging taxes and are not subject to the county lodging tax.

How would the Town of Gypsum use its lodging tax?

Since a municipal lodging tax is controlled locally by Town Council, revenues would be dedicated to priorities that directly benefit Gypsum, as outlined in the ballot measure approved by voters and guided by Council. The proposed ballot measure would allow investing new revenues on infrastructure and capital costs associated with Gypsum’s roads and parks and recreation facilities and for special events sponsored, funded or assisted by the Town.

How much money would the Gypsum’s 4% lodging tax generate annually?

Preliminary estimates show approximately $200,000 in lodging tax revenue once the first hotel opens and begins operations. As the hotel’s business grows and the second hotel begins operations, the revenue will continue to increase—allowing the Town to make more improvements and support more programming.

Why is the Town asking for a 4% tax rate on lodging?

Town staff recommended matching the existing county lodging tax rate since the future hotels have already built that tax rate into their operational plans.

Has Gypsum considered a lodging tax before?

Yes. In November 2024, Gypsum voters rejected a 3% municipal lodging tax. At this time, the county’s lodging tax was 2%, which was increased to 4% after a 2025 election. In talking with community members after the election, Gypsum residents did not understand why they were being asked to pass this tax since the Town did not have any hotels or significant lodging.

How is the lodging tax ballot question similar to Gypsum's 2020 tobacco tax election?

The current lodging tax ballot question proposal is similar to the Town’s 2020 tobacco tax election because it asks voters whether tax revenue generated within Gypsum should be collected and controlled locally rather than by the county.

In 2019, Eagle County voters approved a countywide sales tax on tobacco and nicotine products. Since Gypsum did not have its own voter-approved tobacco tax, the county’s tax was collected within Town limits.

In 2020, Gypsum voters approved a ballot measure that "repealed and replaced" Eagle County's tax within the Town. The tax rate did not increase; instead, the tobacco tax revenue generated in Gypsum was collected and administered by the Town, allowing Council to determine how those dollars would be spent to meet community priorities.

The lodging tax ballot question follows the same concept. Rather than sending future lodging taxes from Gypsum to the county, this proposed ballot question will allow tax revenue to be retained and managed locally for local priorities and impacts.