Sin tax for Big Sky?
Big Sky Resort Area District Tax Board considers taxing all alcohol and tobacco sales
Big Sky Resort Area District Tax Board (Resort Tax) is looking into amending the local ordinance regarding alcohol and tobacco sales. Currently, the 3 percent resort tax only applies to alcohol sold in restaurants, but, by the start of the 2019/2020 ski season, residents could expect a shift to all alcohol and tobacco sold. The board and its legal counsel will be conducting a major overhaul of the ordinance, “starting ASAP and working through the summer months,” Board chairperson, Kevin Germain, explained at the May 13 Resort Tax board meeting and further stated that language in the ordinance is currently ambiguous.
“We are talking about a laser focused amendment to the ordinance regarding tax of alcohol and tobacco,” Germain explained.
On one hand, it could mean a tremendous revenue stream for Resort Tax. In 2017, “Sin taxes” on tobacco and alcohol resulted in $13.8 billion in revenue from tobacco sales and $9.9 billion from the sale of alcoholic beverages on the federal level nationwide. All Big Sky businesses would be kept at equal footing; however, this move could potentially make area businesses slightly less competitive with establishments selling alcohol and tobacco in Bozeman.
A $20 bottle of wine, for example, would be subject to the 3 percent resort tax so anyone who purchased the wine in Big Sky would pay an additional 60 cents for the bottle.
A twelve-pack of Pacifico would see an additional 50 cents in tax.
Big Sky Conoco owner Renae Schumacher said she would take a closer look, but at cursory glance, she would not support a local tax on alcohol and tobacco.
Two public hearings – which will come in the form of the resort tax board meetings – are required to amend the ordinance so the public can provide comment, Whitney Brunner, assistant manager of Big Sky Resort Area District explained. The redline version of the amendment will be available in advance of the June 3 meeting, and will include the amendments and an addition for tobacco.
Board treasurer Sarah Blechta said she felt strongly about not putting the ordinance amendment into a subcommittee.
“I think we just sit down and start hashing it out as a group, section by section. Otherwise, there are so many changes and it becomes a waste of time for the board and the sub-committee,” she explained.
Steve Johnson, board vice chair, said he would be concerned with the productivity of including the entire board, cautioning against “wordsmithing weeds,” or defining decisions that should be left to legal counsel.
Johnson later discussed considerations with regard to the ordinance. For example, consumer disclosure – letting everyone know; record keeping, which he described as essential if they are ever going to do any auditing; and the option of tax waiver periods. The board could declare waiver periods – during shoulder seasons, for example – so the tax would not be impacting locals when less money is flowing in Big Sky.
“The law gives us leeway. The law uses luxuries. That becomes quite ambiguous. As we pointed-out before, each community looks at it differently. What can luxuries encompass? We need to have that discussion,” board director Mike Scholz said.
“The goal is to have the new ordinance in place by the opening of ski season,” Johnson said.
“It will be a robust [summer] season of legal documents,” Daniel Bierschwale, Resort Tax board district manager, said.