City council OKs resort tax language; what will and won't be taxed listed

The Columbia Falls City Council Monday night approved a draft version of a 3 percent resort tax that will go in front of voters later this spring.

Fifty-five percent of the funds raised by the tax are slated for public safety, 25 percent toward a property tax rebate for city landowners, 14 percent toward public infrastructure, 5 percent back to businesses for the cost of collecting the tax, and 1 percent toward city administration.

Council had a lengthy discussion on the tax Monday night. Resident and Columbia Falls businessman Dave Petersen, who was on the committee that worked on the tax, made the case for a 30 percent rebate for property owners, claiming that it would make it easier to pass. He noted the recent school bond passed by a slim margin and he was worried that taxpayers might not go for the resort tax.

But in the end, council noted the rebate for city property owners was just that — a rebate. It wasn’t designed to be property tax relief, it was meant to offset the cost of the tax to city property owners.

If approved, the tax would be in effect for 20 years.

Conservative estimates are the tax will raise about $450,000 initially. The city is looking at having to hire at least two full-time firefighters in the near future, as it continues to grow, and its volunteer ranks are strained by the sheer number of calls.

Mayor Don Barnhart noted that the current city budget simply doesn’t have the funds to pay for a fire department. The other option would be to float a public safety levy to voters. But to raise the same amount of money would cost city homeowners more than $200 a year.

The resort tax is seen as a way to capture tourist and visitor revenue without the tax burden on property owners. During the tourist season, the fire and police departments are very busy. The fire department alone responded to more than 300 calls last year — an all time high.

The tax is notable in what it does and doesn’t tax. The tax does not apply to groceries, with the exception of candy and soda. It does not tax medicine, hardware supplies, auto parts, motor oil, gasoline, newspapers, furniture, dishes and the like (see accompanying lists in the newspaper).

It really centers on the service industry, alcohol, vacation rentals and the like, known as luxuries, under the proposed law.

To wit:

“Luxuries shall mean any gift item, luxury item or other item normally sold to the public or to transient visitors or tourists; but the term does not include food purchased unprepared or unserved, medicine, medical supplies and services, appliances, hardware supplies and tools or any necessities of life.”

For example, if a person eats at a restaurant, the meal is taxed, or rents a car or ATV, the rental is taxed.

“We really tried to focus (the tax) on people driving through town,” said councilwoman Jenny Lovering.

Luxuries also include super market “non-food” items (though there are some exceptions, like diapers), cigarettes and other tobacco products, including vaping products.

A public hearing on the measure is 7 p.m. Jan. 21 at city hall.

After the hearing, council will likely approve the final language for the tax, much of which is already dictated by state law.

It is important to note that only city residents will have a vote on the proposed tax.

Here’s what qualifies to be taxed under the proposed resort tax:

Hotels, Motels And Other Lodging Or Camping Facilities:

- All goods and services sold

- Conference, convention or event room or space rentals Lodging based on rental periods of less than 30 days lodging for which the state bed tax is payable.

- Bed and breakfasts

- Campgrounds and RV parks

- Condominium rentals

- Hotels and motels

Attractions:

- Bowling alleys – limited to liquor/food/concerts

Golf courses:

- Cart rentals

- Green fees/memberships/merchandise sales

- Movie and live theaters

- Rodeos

Rentals:

- Automobiles, trucks, trailers, RVs, jeeps, etc. conference, convention or event room or space rentals; golf, ski and sports equipment; motorcycles, bicycles, ATVs, etc. snowmobiles, boats, jet skis, etc.

Retail sales of goods (excluding sales for resale) of:

- New and used books of local interest

- Cameras and supplies

- Candles

- Clothing limited to logo wear, recreational clothing, gear and accessories that have been screen printed, embroidered, or otherwise imprinted with designs depicting or containing words such as, 51 Montana, Columbia Falls, Flathead County/Valley, Glacier Park or any combination thereof.

- Finished craft items, including those sold at arts and crafts fairs, other than those that are household furnishings

- Jewelry and art including decorative dishes and dishwares not used for meals

- Mail order and catalog sales

- Motorcycles, snowmobiles, jet skis, etc.

Pictures and picture frames, posters, prints, handcrafted cards

- Secondhand stores and antiques

- Souvenir, imprinted and gift items with logos

- Sporting goods including sold as used or on consignment, except when sold at a garage sale

- Bicycles except stationary fitness or exercise bicycles

- Supermarket nonfood items:

Tobacco and tobacco products and nicotine delivery systems (aka vaping)

Services:

- Guides and outfitters including hunting, fishing, rafting, horseback rides, etc.

- Recreational services and labor

Restaurants, fast food and other food service establishments:

- All goods and services sold, including delivery charges, but not tips

- Foodstuffs intended for immediate human consumption

- Fraternal organizations which provide food and beverages or rent their facilities to the public and nonmembers

- Soda pop, gum and candy, including individual, bulk, and packaged candy quantities

- Vending machines

Taverns, bars, nightclubs, lounges and other public establishments serving beer, wine, liquor or other alcoholic beverages by the drink:

- All alcoholic beverages, including beer and wine, sold by the drink or at retail All goods and services sold

- Private liquor stores

What won’t be taxed

Appliances:

- Computers and computer supplies including webcams

- Electronic communication and entertainment devices

- Kitchen counter devices (mixers, toasters, etc.)

- Stoves, refrigerators, freezers, washers, dryers, dishwashers, trash compactors, telephone equipment

- Vacuum cleaners

Food purchased unprepared or unserved:

- Food items eligible for purchase with food stamps (except soda pop or candy)

- Food items not purchased for immediate consumption; including a loaf of bread, non-carbonated drinks, fitness drinks for later consumption

- Vitamins

Hardware Supplies And Tools:

- Implements and supplies used in the construction, improvement, maintenance or repair of buildings and their furnishings

- Lawn and garden equipment and supplies

Hotels, Motels And Other Lodging Or Camping Facilities:

- Lodging based on rental periods in excess of 30 days

Medicine, Medical Supplies And Services:

- Doctors, dentists, chiropractors, opticians

- Medical supplies, items sold to be used for curative, prosthetic or medical maintenance purposes including exercise or fitness bicycles, fitness balls

- Medicine, substances sold for curative or remedial properties, including nonprescription drugs psychologists, counselors, social workers

- Therapeutic massage

Necessities Of Life:

- Funeral directors

Supermarket nonfood items:

- Baby and child care products: Disposable diapers, powder, lotion, etc.

- Cleaning supplies

- Deodorant

- Laundry detergent and bleach

- Paper products

- Personal hygiene products

- Combs, brushes, sunblock, lip balm Dietary supplements

- Feminine hygiene: Kotex, tampax, douche Soap and shampoo, lotions

- Toilet paper

- Toothpaste and mouthwash Vitamins

Utilities:

- Public and private including propane, heating oil, garbage, power, telephone, internet and cell phones

Other Items And Services:

- Auto mechanical parts

- Automotive accessories

- Building contractors and tradesmen:

- Plumbers, electricians, carpenters, roofers, drywallers, painters, masons, pest control, paving, excavating, HVAC, well drillers

- Charcoal

- Computer services

- Contractor and homeowner equipment including vacuums and floor cleaners

- Craft items and supplies including posterboard

- Dishes and dishwares used for meals or cooking

- Furniture and home furnishings including lawn and patio furniture and used furniture Gambling revenues

- Gasoline

- Housewares and sundries

- Lawn, garden, landscaping supplies and compost

- Light bulbs

- Motor oil

- New and used car and truck sales

- Newspapers

Nonprofit and charitable events:

- Fraternal organizations which provide food and services only to members

- Nonprofit fundraisers

- School sports events

Other business and professional services:

- Appliance repair

- Auto repair and related services

- Bank charges and interest

- Car wash, towing

- Hair salons and barbers

- Health clubs

- House cleaning and janitorial services

Insurance agents:

- Health, life, auto, bonds

- Interior decorators