By Bay Stephens EBS LOCAL EDITOR
BIG SKY – In their Aug. 14 meeting, the
Big Sky Resort Area District board made clear their intent to subject alcohol
and tobacco to resort tax, reasoning they are not “necessities of life” that
are exempt from the tax, but rather fall under the umbrella of “luxuries”
designed to be taxed in a resort tax area to provide relief for the local
population.
“We’re trying to be equitable and fair,”
said Sarah Blechta, BSRAD treasurer. “I personally do not believe that alcohol
is a necessity of life, I believe it’s a luxury. I also believe that tourists
buy it and locals buy it.”
Frank Kern, owner of the Hungry Moose
Market and Deli, and Renae Schumacher of the Big Sky Conoco Travel Shoppe
presented a petition signed—at both their businesses, as well as at the Big Sky
Exxon and The Cave Spirits and Gifts—by 652 private individuals who didn’t want
alcohol sold at grocery and convenience stores to be taxed. Big Sky residents
comprised 376 signees, with the remaining 190 residing outside of Big Sky or in
another state.
Currently, the 3 percent resort tax is
only levied on booze sales at establishments where alcohol is formally served,
such as bars and restaurants.
“We are ending up taxing locals and we
are impacting local businesses and we are doing something we haven’t done for
27 years, maybe because of confusion, but we haven’t taxed,” Kern told the
board. “So we put up a petition asking people if alcohol and tobacco shouldn’t
be [taxed].”
Schumacher echoed Kern, telling EBS after
the meeting that she doesn’t think the change would bring in much more resort
tax because alcohol and tobacco operate on slim margins. Her concern is that
the shift misses the intended purpose of resort tax.
“This will hit locals and transient
workers who can’t live up here because there’s no housing and they can’t afford
to live here,” Schumacher said. “They’re going after the wrong subset of
people.”
This discussion falls in the midst of the
board’s revision process of the ordinance that defines what should and
shouldn’t be taxed. The primary goal of the revision process is provide clarity
about what is subject to tax, for the sake of businesses that remit the tax and
for compliance.
The draft ordinance includes a new
section outlining the purpose of resort tax, the cornerstone of the rest of the
document, according to the board, and they intend to align any other items in
the ordinance with this section, including alcohol and tobacco.
At this point, the board has determined
that the purpose of resort tax is to tax goods and services sold to tourists
and transient visitors, but which locals and other members of the general
public may also purchase, luxury items, exempting any necessities of life.
“This is clarification,” board chair
Kevin Germain said of the move toward taxing the goods. “I do think there was
intention and we’re just trying to clean it up. The tobacco [is] new because
tobacco and alcohol go hand in hand when you’re talking about these things. If
you’re taxing alcohol, how can you argue not to tax tobacco?”
The board also pointed out that, though
alcohol sold for off-premise consumption has not been taxed, it should have
been starting in 2015 when the last ordinance revision to that aspect took
place, stating that “all alcoholic beverages” are subject to resort tax.
“I helped write this, so I can tell you
what the intent was and what I still believe it says,” board director Mike
Scholz said. “It says, ‘all alcohol.’”
Depending on interpretation, review of
the past ordinances indicate that all alcohol sold in the district should have
been taxed beginning as far back as 2002, potentially leaving 17 years-worth of
resort tax on alcohol sold in grocery and conveniences stores uncollected.
The board said part of this oversight is
likely because of an eight-year period prior to 2011 when they conducted no
audits. According to the board, the 2015 ordinance change was supposed to make
the wording clear enough to remit tax on all alcoholic beverages in the
district, but a 2017 audit revealed that the change was universally
disregarded, leading to the current attempts to clarify, and enforce, the
ordinance as it relates to taxation of alcohol.
Scholz also pointed out that the tax is
designed to hit the contract workers commuting into Big Sky, helping to pay for
the emergency and law enforcement services.
“That little extra on their tallboy or
whatever, is the little bit they pay for that protection, and that was one of
the reasons we were able to get [resort tax] through the legislature,” Scholz
said.
“We’re only applying to you the same
criteria we apply to everything else,” Sholz told Kern and Schumacher. “Do
tourists buy it? And if they buy it, we think it should be taxed. It was quoted
in the [Lone Peak Lookout] as a sin tax. It’s not a sin tax. It’s a tourist
tax.”
The board added that it’s time alcohol
and tobacco pull their weight for the community in financial terms, considering
numerous issues the substances usher in for many in Big Sky.
“There are clearly impacts on our
community—public health and safety, law enforcement, whatever you want to say—resulting
from the use of alcohol and possibly tobacco as well,” BSRAD Vice Chair Steve
Johnson said. “And we have no compensation for that and that’s part of the
purpose of resort tax, is to tax things that have an impact on our community
that we can otherwise not fund.”
Although not happy with the board’s
stance, Schumacher and Kern expressed their support of resort tax and its
process.
“I’m just glad they’re at least giving us
a chance to voice our opinion,” Shumacher said. “And locals can speak up too if
they don’t want alcohol to be taxed. In the end we’ll collect and remit the tax
however they want to do it.”
In other news:
- The
board discussed adding an appeals process to the ordinance that would allow
businesses to ask BSRAD staff for clarification as to whether specific goods
and services should be taxed, and appeal to the board if they don’t like the
answer.
- The
board approved bonds allocated during the 2019/2020 allocations meeting in
June: $500,000 for the Big Sky Community Organization’s BASE Community Center
and $414,185 for Gallatin County 911’s radio network based on Lone Mountain.
- The
board is waiting on responses from a survey the Big Sky Chamber of Commerce has
distributed among its members as to how beneficial a “tax holiday,” a period in
which resort tax isn’t collected in the shoulder seasons, would be to area
businesses.
- The
board approved a request from the Big Sky Community Housing Trust to use a
portion of the funds allocated for the 2019/2020 fiscal year to pay off debt
from the first phase of the Meadowview Condominiums development, of which all
18 units are under contract for sale but have not closed because they are
awaiting Fannie Mae approval of the HOA.
The board will do an official first reading of the revised ordinance on Sept. 10. Visit resorttax.org for more information on how to get involved in the revision process.
