Dorotik v. Town of Breckenridge.
2026 COA 20. No. 25CA0030. Taxation—Taxpayer’s Bill of Rights—Municipal Law—Regulatory Police Power—Regulatory Fees.
March 26, 2026
The Town of Breckenridge passed Ordinance No. 35, which enacted an annual charge applicable to short-term rental (STR) owners obtaining or renewing a license for an STR in Breckenridge (the charge). Breckenridge arrived at the charge of $756 per STR bedroom, to defray the STR impact on the local housing market, based on a consultant’s study that found a reasonable relationship between guest spending from Breckenridge’s STRs and the demand for affordable housing for the local workforce. Ordinance No. 35 refers to the charge as a “regulatory fee” necessary to defray costs for the local workforce who are essential to the tourism economy that benefits STR licensees. Dorotik owns a townhome in Breckenridge subject to the STR regulatory fee. He filed a complaint challenging the fee, asserting that the charge is a tax that violates the Taxpayer’s Bill of Rights (TABOR) and thus requires a vote, because the activity subject to the charge allegedly generates more revenue than the amount of the claimed expense. Breckenridge moved to dismiss the complaint. The trial court ruled that the charge’s primary purpose is to defray the costs of administering Breckenridge’s regulatory scheme rather than to raise revenue for general government expenses, so the charge is a fee and not a tax. The court held that Ordinance No. 35 does not purport to levy a tax because it labels the charges as a fee, and it serves to protect the public’s health, safety, and welfare.
On appeal, Dorotik argued that the trial court erred in concluding that Ordinance No. 35 imposes a fee rather than a tax. He asserted that the “fee” directly generates more revenue for Breckenridge than the cited expense, so the charge is a tax and not a fee. Under Colorado Union of Taxpayers Foundation v. City of Aspen, 2018 CO 36, when reviewing a charge involving a regulatory program, the court must first determine whether the government is exercising its legislative taxation power or its regulatory police power. If the charge’s primary purpose is to raise revenue for general government expenses, it is a tax. But if the charge is imposed as part of a comprehensive regulatory scheme to defray the reasonable costs of providing a service or regulating an activity under that scheme, the charge is not raising revenue for the government’s general expenses. The court of appeals concluded that Ordinance No. 35 does not facially purport to impose a tax. Further, each permissible use for the funds raised by Ordinance No. 35 is tied to the regulatory program’s purpose or expenses. The court held that a government can impose a regulatory fee even if the activities subject to the fee also generate revenue under the government’s general taxation scheme. Here, the charge is based on a reasonable relationship between guest spending from STRs in Breckenridge and the demand for affordable housing; it is a regulatory fee, not a tax requiring a vote under TABOR. Accordingly, Ordinance No. 35 did not violate TABOR. Dorotik thus failed to state a claim for relief, and the trial court did not err by dismissing his complaint.
The judgment was affirmed.