ERIE, Colo. — The town of Erie is considering a new lodging tax that would apply to hotels and short-term rentals, with town leaders eyeing a November ballot measure as the Sundance Film Festival prepares to come to Boulder in 2027.

Town leaders say the tax would be funded by visitors, with revenue directed toward community improvements.

▶️ WATCH: Denver7's Boulder County reporter Colin Riley gets more details from Erie town leaders

Erie considers lodging tax ahead of Sundance Film Festival

According to the town's website, the tax would apply to any stays in hotels or short-term rentals where the visitor stays less than 30 days, with taxes being added to the visitor's bill.

Erie currently has no hotels, though one is in the planning stages, according to Erie Communications Director Gabi Rae.

Rae confirmed that hotel will not be ready in time for the 2027 festival. Still, the town is moving forward with plans to capture lodging tax revenue, particularly as surrounding cities begin filling up with bookings.

"What we're trying to do is narrow in on what ballot language could look like," Rae said.

Erie is collecting public feedback on the proposed tax as it works toward a potential ballot measure this fall.

"Getting a ballot measure on the ballot this fall is kind of a step one," Rae said.

Alongside the lodging tax, Erie is also working to establish short-term rental regulations before visitors arrive for Sundance.

"The town of Erie currently does not have regulations in our code for short-term rentals at all, so that is the second part of the conversation we need to have, and we'll be having this fall," Rae said.

Denver7's Colin Riley also spoke with local real estate agent Bri Ugalde with Ed Prather Real Estate, who said short-term rentals could offer homeowners more than just a way to cash in on tourism — they could provide a financial lifeline for those who bought at a high price.

"A short-term rental could give homeowners another option to generate income and hold on to their properties, which then they would benefit from future appreciation rather than feeling pressured to sell," Ugalde said.

Still, Erie's new regulations will need to strike a balance between the short-term rental market and keeping housing accessible to buyers.

"I wouldn't be shocked if they do put some permitting and licensing restrictions around it," Ugalde said.

If voters approve the tax and short-term rental rules are finalized, collection could begin Jan. 1, 2027 — just as Sundance visitors begin arriving in Boulder County.

"It's possible we missed the first iteration of Sundance, but the goal is to have it all in place in time for Sundance to be here," Rae said.