July 1 will bring 1 percent increase in lodging tax
Just as competition heats up around the gateway to Yellowstone
Sales and use tax for accommodations and campgrounds will be increased July 1 by 1 percent via Senate Bill 338. This will bring the statewide lodging tax to eight percent. The bill created the Montana Museums Act of 2020, so a portion of the revenue collected from the increased lodging tax will help fund the construction of and provide funding for the Montana Heritage Center in Helena until December 30, 2024.
“Beginning July 1, we will now be at 11 percent here in Big Sky and if we do the up to 1 percent [increase], we will be up to 12 percent,” Big Sky Chamber President Candace Carr Strauss told the board at the recent Big Sky Resort Area District Tax Board meeting before explaining that this would mean Big Sky would hold the distinction of having one of the highest state levied [lodging] taxes.
Big Sky Resort Area District Tax Board Vice Chair Steve Johnson asked if funding from the increase will go to the general fund or if the percent will go to the Department of Commerce.
Strauss explained that it was actually a complicated political compromise.
“The revenue will fund capital improvements to the Montana Historical Society [building] across from the capitol for the next five years,” she said. “After that sunsets – a portion being allocated for their future expanded operations and then those monies will revert back to the state and region and will go towards the bureaus for marketing and promotion, but not for five years. It’s a very complex bill.”
“There is no immediate derivative benefit to our community through this tax?” Steve Johnson asked.
“No,” Strauss said.
Big Sky Resort Area District Tax Board Treasurer Sarah Blechta asked if in five years the visitors bureau will see additional funding.
“Maybe,” Strauss replied. “We’ve got two legislative sessions before that. I won’t say anything until this transpires.”
The immediate point is there’s an impact on businesses around here. The derivative point is we might see some of that [funding] later,” Johnson said.
This lodging tax increase comes at an interesting – and increasingly competitive – time in the gateway to Yellowstone market. West Yellowstone is at par with Big Sky as far as the tax rates go, but has an additional 300 units coming on-line with their water/sewer moratorium being lifted, Strauss said.
While West Yellowstone is at the same rate, Bozeman and Belgrade are not.
“With the Yellowstone Airport Plaza and hotels coming… competition is becoming fierce and price points will begin to weigh into visitors making a decision on where they choose to stay when going to Yellowstone. So, it’s just something we’re watching,” she said.
The 1 percent bed tax increase has been decided, but the community decides about any potential increase to the resort tax.
“I think it’s important that the community know it’s their decision [for the 1 percent resort tax],” board secretary, Buz Davis, said.