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City looks to put teeth into resort tax collections

| November 16, 2022 6:35 AM

By CHRIS PETERSON

Hungry Horse News

The City of Columbia Falls will look to put some teeth into its resort tax after several businesses apparently did not pay the tax, almost a year later.

The city council last week directed staff to move forward with a law that would institute penalties to businesses that don’t pay the tax, and as a last resort, criminal penalties as well.

The city will likely base its law on a similar ordinance out of Red Lodge. Failure to pay the tax in that community is subject to an 18% per annum penalty in addition to a $250 penalty and failure to report of $250. Red Lodge also has a criminal penalty for not paying the tax which includes a $1,000 fine and/or 6 months imprisonment for failing to report and remit resort taxes after a 30 day grace period as well as a civil remedy of the revocation of the business license.

Whitefish has the same criminal penalty as well as the civil penalty of 10% per annum on delinquent payments, city manager Susan Nicosia told council.

Red Lodge staff reported almost no delinquencies after the $250 fee was added to the 18% per annum penalty, Nicosia noted.

As of a few weeks ago, the city had 31 delinquent businesses, several of whom had not yet paid for the first quarter ending December 2021.

The city sent out letters to the businesses and all but 12 had paid, but there is additional concern about vacation rentals and other businesses simply ignoring the tax altogether.

The initial resort tax law, passed by voters, did not include any penalties for non-payment, as the city was trying to be a “kinder gentler” entity.

But the number of scofflaws has been alarming.

The bulk of the 3% sales tax on certain goods goes toward paying for public services, like firefighters and additional police officers.

Twenty-five percent of the tax goes toward a property tax reduction, which shows up on city taxpayer statements this current bill.

The good news, Nicosia noted, was that the city budgeted about $800,000 in resort tax revenue in its first full year and it collected that amount.

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