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White sh Resort Tax Surges with New Lodging Accommodations
Twenty years after White sh implemented its resort tax, city has funneled $30 million to public works projects and property tax relief
TBY TRISTAN SCOTT OF THE BEACON
WO DECADES AFTER THE implementation of White sh’s resort tax — and more than a year
after voters bumped the once-controver- sial tax up from 2 percent to 3 percent — collections are surging just as the com- munity adds a glut of hotel rooms to its inventory.
Montana is one of ve states without a statewide sales tax, alongside Alaska, New Hampshire, Delaware and Oregon. Resort taxes, or local option sales taxes on luxury items and lodging, help tour- ist-dense communities like White sh balance the burden of paying for rising infrastructure needs.
The idea is that seasonal in uxes of visitors place a higher degree of pressure on streets and public spaces, and local taxpayers shouldn’t have to bear all the nancial responsibility.
In April 2015, White sh voters approved an increase from 2 percent to 3 percent in the resort tax, which applies to three economic sectors — lodging, restau- rant food and drinks, and retail items.
Overall, with the additional 1 percent- age point included, collections were up by 70.53 percent, or $145,428, this June compared to June of last year, when the 2 percent tax was in place.
The percentage point increase, which took e ect in July last year, accounts for much of the increase, but this year’s addi- tion of a new Hampton Inn also prompted collections on lodging to increase dra- matically — from $39,483 in June of last year to $55,835 for June of this year, or a leap of 41 percent.
Downtown White sh. BEACON FILE PHOTO
“That tells a pretty big story right
there,” White sh City Manager Chuck Stearns said. “That’s a signi cant increase. And the one tangible change is the opening of the Hampton Inn and Suites, which didn’t exist last year.”
Prior to that development, there were already about 1,200 guest rooms in White sh, according to White sh Con- vention and Visitors Bureau Executive Director Dylan Boyle, not counting per- sonal rentals such as Airbnb or VRBO.
Combined with the recent opening of the Firebrand Hotel, 161 rooms have been added to the local inventory this year, an increase of 13 percent in lodging accom- modations, while the White sh City Council’s recent approval of a Marriott TownePlace Suites o U.S. Highway 93
South will add another 81 rooms.
Ever since the recession destabilized the valley’s economy, tourism has taken over as the largest basic industry in the Flathead, accounting for 19 percent of earnings in the county from 2012 to 2014, according to the Bureau of Business and Economic Research at the University of Montana. Nonresident travel is expected to grow about 3 percent per year from
2015 to 2018.
With that upward trend in visita-
tion, Stearns said resort tax collections on lodging will continue to surge in the busy summer months, and the lag in outside visitation typical of the shoulder seasons is beginning to diminish, mean- ing demand for those rooms should keep climbing.
The biggest factor for the uptick in resort tax collections was the addition of a 1 percentage point resort tax increase, from 2 percent to 3 percent, which vot- ers overwhelmingly approved last year to help nance the purchase of a conserva- tion easement in Haskill Basin.
On an equivalent basis of the 2 percent resort tax this year compared to last year, resort tax collections in June were up by 13.7 percent, or $28,221. For the year-to- date, the comparative 2 percent resort tax was up 2.12 percent, or $46,777.
Since White sh began collecting resort taxes two decades ago, a total of nearly $1.6 billion in taxable sales has yielded nearly $31.9 million in collected revenues, with $1.6 million returned to vendors as an administrative fee. A total of $30.3 million is considered the “public portion.”
In White sh, tax revenues have paid for new roads, bike and pedestrian paths, park renovations, and various other community projects, including bleach- ers at the White sh ice rink and recon- struction of the Grouse Mountain tennis courts.
To date, $17.2 million has gone into street repair. Another $7.9 million has been rebated to White sh property own- ers, while $1.1 million has been used for park improvements.
Of the three economic sectors sub- ject to resort taxation, lodging makes up 18 percent of resort tax collections, bars and restaurants 37 percent, and retail 45 percent.
In all, it has funded 41 public works projects to date.
Results are visible throughout
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AUGUST 24, 2016 // FLATHEADBEACON.COM