What can the resort district tax?
Parsing the legalese from club dues to glasses of milk
Over the last year, the Big Sky Resort Area District has been challenged to make sure it’s not missing out on revenue by declining to tax certain things, like dues paid by members of the Yellowstone Club, Moonlight Basin and Spanish Peaks.
“We are responding to the suggestion that we were leaving tax dollars on the table,” said Ginna Hermann during a Jan. 8 subcommittee meeting of the resort area district board. Hermann, the board secretary, and Mike Scholz, the board chair, met with resort area district staffers Whitney Brunner and Kristin Drain to discuss a variety of suggested changes to Big Sky’s resort tax ordinance.
Also gathered were representatives from Lone Mountain Land Company and the Yellowstone Club, who showed up to voice concerns about the board rewriting the local ordinance in ways that would allow the district to tax membership dues to the community’s three residential private clubs.
Hans Williamson, vice president and general manager at the Yellowstone Club, said the resort tax is intended to target retail sales made by tourists—“the greater masses coming in”—that put demands on local infrastructure, not dues-paying club members. He said when you join one of the private clubs in Big Sky, the dues are tied contractually to membership and ownership. “If you are member, you have to pay them,” said Williamson.
“Retail sales are way different than contractual obligations to pay dues,” added Steve Johnson, a Big Sky resident who is running for a seat on the resort tax board this year. He attended the subcommittee meeting and offered public comments, suggesting it’s inappropriate for the tax board to target memberships that are not available for purchase by the general public.
“I think we should stick to our knitting,” said Johnson, supporting the position that the local resort tax was intended to extract 3 percent from retail transactions, not charges contractually required of homeowners living in a private club.
Currently, club members are not hit with the resort tax when they pay dues, but anyone who buys golf tees or ski goggles at a pro shop inside one of the clubs does pay a tax on that transaction.
Hermann noted some fees for using ski and golf facilities are voluntary at the Yellowstone Club, but whether or not that makes these items a taxable purchase remains up for debate.
During public comment, Alex Iskenderian with Lone Mountain Land Company took issue with adding the resort tax to charges paid exclusively by club members.
“It just flies in the face of the intention of this tax,” said Iskenderian. “It’s not a retail sale.”
“It is not black and white or we wouldn’t be debating this,” offered Hermann. “I think it’s time for the board to look at it and study it.”
The other members of the resort area district board include Kevin Germain, Heather Budd and James Kabisch. They will receive copies of the resort tax ordinance with potential revisions suggested by the subcommittee added in. These include a possible tax exemption for the sale of water and milk in an open container or by the drink because both might be considered “necessities of life” and not taxable luxuries.
Summing up why the board has dedicated so much time to revising the resort tax ordinance, Scholz said, “We need to better define certain things and understand what we think is taxable. It’s not about just taxing the tourists.”
The end goal is to provide resort area district staffers Brunner and Drain with clear directions so they can effectively collect all taxes owed to the district.
The subcommittee decided to schedule further discussion on proposed ordinance revisions for the February board meeting.