Colorado Hotel Property Tax Appeals

Intangible value: the question that decides hotel assessments

A hotel’s income pays for more than land and buildings. It pays for the brand, the management, the staff and systems that run the business, and the furniture and equipment. Only the land and buildings are valued on the real property account, so how much of the income belongs to the real estate decides most hotel assessments and appeals.

Colorado’s tribunals have sided with the Rushmore method, which removes management and franchise fees and a return on the furniture and equipment, then treats the rest of the income as real estate income. The Board of Assessment Appeals accepted it in the Gaylord Rockies appeal (Docket 78792, 2021), the Court of Appeals affirmed in an unpublished 2022 decision, and the Colorado Supreme Court declined review in 2023. Because that decision is unpublished, it does not bind other cases, and each hotel’s appeal is decided on its own evidence.

In SVA’s view, business value is still inside the share Rushmore leaves as real estate income: the going concern, the assembled workforce and brand goodwill beyond the franchise fee. The fight is rarely over the method. It is over the levels: market management and franchise fees, the reserve for replacement, and the return on the furniture and equipment. The Colorado guide works the numbers.

Five places a hotel appeal finds value

• The Rushmore levels. Management and franchise fees at market, the reserve for replacement, and a return on the furniture and equipment, each taken from the hotel’s own agreements.
• Income that is not the hotel’s. Revenue booked through the hotel but earned elsewhere does not belong in the value. The Colorado Supreme Court held that rental-program income from separately owned condominium units could not be attributed to a lodge (Lodge Properties, Inc. v. Eagle County Board of Equalization, 2022 CO 9).
• Extended stays. The assessor’s manual treats rooms rented for 30 consecutive days or longer to the same person or business as residential use, assessed at about 7% instead of 25%. Corporate housing, crew contracts and relocation blocks all count, and the documentation is the case (ARL Vol. 2, Ch. 6 and Vol. 3, Ch. 7).
• Renovation and brand-mandated improvements. A deferred property improvement plan is a cost a buyer deducts before anything else, and renovation years depress the income behind the June 30 valuation date.
• The furniture and equipment account. Furniture and equipment are taxed separately on the business personal property declaration, at 26% in 2026 and 25% from 2027. The declaration and the real estate case should rest on the same numbers, so nothing the county counts on one account is counted again on the other.

Worked examples of the Rushmore deductions and the 30-day allocation are in the Colorado guide’s hotel section.

What Denver’s county board decided for hotels

Denver’s county board decided 46 hotel petitions in 2025, and 30.4% won a reduction, the highest rate of any commercial class in the city, with a median winning cut of 9.5%. Room revenue had flattened against assessments that extrapolated the recovery, and the income approach cannot ignore it. Across the Front Range, the strongest predictor of winning was whether anyone argued the case. The 2025 results, county by county.

A full-service hotel won on site

The largest hotel result of my career came from a walk through the building. The county’s value ran straight off a Denver-area full-service hotel’s income statement, and the prior consultant had never visited. On site, it was clear that a significant share of the food and beverage business was handled away from the property, income that does not belong in the capitalized stream. The savings came to $630,000 a year, four years running. That engagement was at a prior national firm; results from SVA engagements will be published with client consent.

The fee, per hotel, before you sign

The fee is a contingency share of the tax actually saved, set per property by its annual tax bill: 20% under $200,000 of tax, stepping down to 8% at $2 million and up, quoted in writing before anything is signed. There is no invoice unless the taxes go down.

A hotel with a $900,000 tax bill over-assessed by 10% recovers $90,000 a year. That bill sits in the 12% row, so the fee is $10,800 and the owner keeps $79,200, in each year of the cycle. The full fee schedule.