Resort Tax Increase Clears Initial State Senate Vote
A proposal to add an additional 1 percent to the resort tax that nine Montana towns are allowed to levy got initial approval Monday.
The 1 percent optional resort tax increase passed its first vote in the Senate 33-16. The tax would fund infrastructure projects in tourism-impacted towns.
The policy would apply only to towns where tourism drives the economy and the population is under 5,500.
When Senate Bill 241 got its first committee hearing in February, West Yellowstone Town Manager Dan Sabolsky told lawmakers that locals have a difficult time funding infrastructure that’s stressed by tourists.
"We’re about 1,300 people. During the summer we hit anywhere between 12 [thousand] to 14,000 people a night. So about 1.4 million visitors go through the town.”
Ten towns in the state, including West Yellowstone, already levy a 3 percent resort tax on the sale of goods and services like hotel rooms, restaurants, bars, and destination outdoor recreation, like ski lift tickets.
The new tax outlined in Senate Bill 241 would tax those same kinds of items.
The additional 1 percent tax must also get the go-ahead from voters, but the approval includes what the money will specifically fund, like a new sewer or bridge. And once that project is paid for the tax is removed.
The bill is carried by Senator Jeff Welborn, a Republican from Dillon, and his district extends into the Big Sky area. He says locals should capture more the state’s growing tourism economy.
"Whether you like it or not, it’s a big part of our new economy. Big Sky is my Colstrip."
Conservative Republican critics of the proposal say resort communities already have a 3 percent tax to help them offset tourists impacts, and a larger share of that money could be put toward infrastructure needs. Critics also point out that these taxes cost Montanans who visit other parts of the state.
According to a study from the Institute for Tourism and Recreation Research at the University of Montana, nonresident visitors to Montana spent $3.36 billion in 2017, and Montana ranks second to Wyoming in visitor spending per capita in western states.