First-annual taxation of private club dues credited

By Sarah Gianelli EBS Senior Editor

BIG SKY – Annual resort tax collections have been steadily on the rise since 1999, with the exception of a couple of years that were flat or saw minimal decline during the Great Recession, according to annual resort tax collections data published on the Big Sky Resort Area District website.

But beginning in 2013, annual collections started increasing by numbers in the hundreds of thousands—a reflection of the growth and health of the Big Sky business community—until finally exceeding an annual increase of more than $1 million between fiscal years 2017 and 2018.

Fiscal year 2017 concluded with total annual collections of $5,165,082. Fiscal year 2018, which ended June 30, raked in a record-breaking $6,809,242, a total increase of approximately $1.6 million.

According to Whitney Brunner, Big Sky Resort Area District operations manager, this significant leap is in part attributed to the first bi-annual remittance of taxable membership dues allocable to ski and golf activities at Yellowstone Club, Spanish Peaks Mountain Club and Moonlight Basin, received by the district last spring.

May of fiscal year 2017 brought in $56,482 in resort tax, while that number leapt to $302,291 for May 2018. Moving forward, taxation of club membership dues allocable to ski and golf activities will be collected twice annually, in the spring and the fall.

With present membership rates and number of memberships, the increase in annual resort tax collection is conservatively estimated at $275,000 by the district.

For years the resort tax board had been fielding inquiries from the public about how resort tax is applied to the sale of some of the services provided by Big Sky’s private clubs. Although they had been routinely paying the correct resort tax on all food service, catering, lodging, retail sales, and other items and services that qualified as “luxury goods,” the board has been working on the appropriate taxation of membership dues for many years.

Despite a June 2015 ordinance to include taxation of “discretionary or voluntary ski and golf fees and dues,” questions still remained about its correct interpretation regarding the taxability of membership dues and how the portion of membership dues allocable to ski and golf activities should be determined.

A resolution was finally reached and announced in June.

At the Yellowstone Club, the board determined that 39 percent of membership dues were attributable to ski and golf, and therefore subject to resort tax. At Spanish Peaks and Moonlight Basin, the board determined the golf valuation was the difference between golf and non-golf (i.e. social) membership dues and therefore subject to resort tax.

The Big Sky Resort Area District tax board does not disclose specific remittance data without business approval; and club representatives either did not respond to EBS by press time on Nov. 7 or declined to provide additional information. A June press release about the new club dues taxation policy stated that “all three clubs are some of the largest collectors of resort tax in the district.”

Brunner added that of the 1,300 or so district businesses, including short term rentals, registered with resort tax, 20 of those businesses remit 80 percent of annual resort tax collections.