Business owners see red over Resort Tax Revision

Photo by Eleanor Guerrero

Shoppers enjoy a day

in Red Lodge.

The ever-confusing issue of the Resort Tax came to the surface again prior to the Red Lodge City Council meeting, Nov. 12, when a proposed Resort Tax Ordinance Revision was put to the sword by 40 plus frustrated store owners and employees. Members of the Resort Tax Committee who were present were puzzled why so few of their recommendations had been added to the Revision. The puzzlement and the frustration were so evident that the Council canceled the 1st reading for another date. Jeff Schmidt, Red Lodge Mountain, was on the Resort Tax Committee, and told the council he looked at Ordinance (Revision) 901 and saw “a lot of things we never talked about.” “We never talked about clothing and pet food,” he said, yet they were on the list as taxable luxury items. To further reiterate the confusion of the Ordinance he pointed out that under golf courses it lists movies and live theatre and rodeo. “The format makes no sense to me. I recommend the whole thing be revisited,” said Schmidt. “Where did clothing come from?” said Doug Bailey. “Does anyone know?” It still remained a mystery at the meeting’s end. Rod Bastian, Beartooth Market, said that one thing that was obvious was the two committees didn’t meet and “came to very different conclusions.” A point reiterated earlier by Corey Thompson who said this problem “might have been defused, if the Resort Tax Admin Committee had met with the Resort Tax Committee” so they could explain their rationale to each other. Gary Robson, Red Lodge Books and Tea, served on the Resort Tax Committee for five years, said he hoped to see “clarity, simplicity and consistency” from the Ordinance. “It is frustrating dealing with two different lists, taxed and not taxed and then having to say what about puzzles or games not on either list, or flags, calendars, purses.” He also warned of people shopping away from town if the City keeps taxing the basic necessities of life. Bastian also felt that the City needs to “be very careful not to add to the perception that everything is cheaper in Billings and everything is taxed in Red Lodge.” He recalled that when the Resort Tax was created in 1997 it was to be a “new revenue source for infrastructure, and take the burden off residents and provide property tax relief.” “The original ordinance was drafted from West Yellowstone’s ordinance. They are not a viable local economy; they are a tourist town. They are more successful with their Resort Tax because of the volume of tourists and they tax everything. But their businesses are seasonal, and employment not available year round,” he said. Tamara Upton chipped in and wanted to know where the Resort Tax money went. “Show us in some more physical form when our tires get blown out by pot holes all over town,” she said. Susan Foisey, a volunteer cashier at Kids Corner, said that Ordinance 901 incorporates almost none of the committee’s recommendations. “Even worse, the proposed Ordinance introduces far more confusion regarding which items should be taxed by including lengthy lists of exempt and non-exempt items using language from the Resort Tax of the City of Whitefish. These lists are poorly organized and redundant,” she said. Polly Richter, also on the Resort Tax Committee, was confused as the Committee reviewed Ordinance 879 but noticed a reference to Ord. 95-15, 12-18-1995, from Whitefish. “So I don’t know which Ordinance you reviewed. We were tasked to review Ordinance 879,” she said. Beth Steen, Village Shoppe, also queried how Ordinance 879 became 901. Amber Enos, owner of Sagebrush Sirens, complained about taxing on-line sales. “You cannot tax anyone say from Boston ordering from Red Lodge. I can’t double tax them; they’re already taxed in the state they live in. I don’t want to raise our rates. Don’t penalize stores that have stayed open through the construction and kept a smiling face through the whole debacle, and through the (Beartooth) Pass closing two weeks early. We’ve been hit hard enough. We can’t afford to be taxed any more on our items,” she said. Perhaps the most scathing comments came from Sam Hoffman, Sam’s Tap Room, who suggested that if the City wanted more money, perhaps they should cut some posts. “A quick Google search suggests that most communities in the US with 1,725 have 5.6 police officers, we’ve got 7 here. Do we need them? Seems a lot of them spend their time writing tickets for petty traffic violations like parking too close to the corner or too far away from the curb. We have almost no new development here and we have two city planners. Do we really need that?” said Hoffman. “It makes me shake my head at the stuff coming from the City. It seems constantly trying to make it hard to live and work in this town, and own a business in this town. Last year I paid $15,500 in Resort tax, my business property is almost $14,000. My 900 sq foot home has taxes that are 72 percent higher than 10 years ago. My water rates are 26 percent higher,” he said. “This is a tough town to make it and to heap on more taxes… According to the Montana Code, 76-1503, the tax is supposed to be strictly on luxury items and how is clothing is a luxury item? You’ll either freeze to death or the cops will tazer you for walking down the street. It just doesn’t make any sense. You’re sucking the dollars out of Red Lodge.” Acutely summing up the shopper’s dilemma was Wayne Stevenson, who was “surprised by the ordinance.” “I bought this shirt, this vest and pants at Beth’s Village Shoppe and was shocked to learn these beat up jeans are now considered a luxury item. It doesn’t make any sense. I also learned I can buy an IPod in Red Lodge and it is not considered a luxury item and I can download a book and read it on this iPod. But if I go to Gary’s store and buy a book and hold it in my hands that becomes a luxury item,” said Stevenson. With further revisions being made to the revision, a new version should be available this week. Council member, and mayor elect, Ed Williams offered to hand deliver the new revision to every store.