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Tax board to conduct compliance audits



By Amy Smit, Contributor

Big Sky’s local 3% resort tax helps fund
several programs and services in our
community. Despite this, some businesses
may not be applying, collecting,
or paying the tax correctly, while other
business have over- collected, or undercollected.
Big Sky was designated a “resort area”
by the Montana Department of Commerce
in 1992 and the local electorate
approved a 3 percent sales tax on certain
goods and services.
This money is used to support tourism
development, the post office, fire
department, search and rescue, police
department, community library, public
transportation, parks and trails, water
monitoring, music performances, forest
health, community counseling, and
other programs that enrich the quality
of life inside the Big Sky Resort Area
District (BSRAD).
Each month, local businesses report
the amount of resort tax they collected.
Of the 3 percent, they can keep
5 percent as an administrative fee. Tax
collectors then remit this money to the
District. The BSRAD Board of Directors
oversees the tax management and
appropriation on behalf of the Big Sky
The BSRAD also performs periodic
“compliance audits” on Big Sky businesses.
The idea is to ensure that businesses
are applying the tax correctly,
and that the correct amounts are being
reported to the District. Dellinger &
Gallagher, a CPA firm from Manhattan,
performs these procedures. This firm
has done similar resort tax compliance
audits in West Yellowstone for many
In 2011, the Board split the tax collectors
into two groups according to
annual revenue, and five businesses
from each group were examined. Some
businesses were specifically chosen,
but most were randomly selected.
The names of these businesses are not
public record.
Of the 10 selected, four were in compliance
with the District ordinance.
Two had underreported sales in the
combined amount of $14,816, and
three over-reported sales in the total
amount of $20,734. One didn’t provide
adequate information. The auditors
also found a large discrepancy between
sales, and sales reported to the District.
The BSRAD Board of Directors
received the report in early October;
it will examine the findings and take
appropriate action.
If you have a question about the taxability
of an item, or any other aspect of
resort tax, contact the BSRAD office.
Office hours are Monday–Thursday,
9 a.m. to 2 p.m., and by appointment.
The new office is on the second floor of
the RJS building in the Big Sky Town

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