City scales back resort tax penalties

Hungry Horse News

The City of Columbia Falls is still looking at a new law that would implement penalties to businesses that are chronically late paying resort taxes, but it won’t look to implement criminal penalties for non-payment like some municipalities do.

Last week the city council directed city manager Susan Nicosia and city attorney Justin Breck to draft a law that would add a 10% interest annual percentage rate penalty as well as a $100 penalty for accounts that are more than 30 days past due and add another $100 penalty for accounts that are 60 days past due.

The law will also add language that will allow the city to take chronically late accounts into judgment, which could put a lien on the business.

The moves come after the city’s first year of implementing its 3% resort tax, which imposes a sales tax on select goods and services, like alcohol, candy and restaurant meals.

Earlier this fall, the city had 31 delinquent businesses, several of whom had not yet paid for the first quarter ending December 2021.

After sending out notices of non-payment, all but 12 had paid, but city manager Susan Nicosia told council at its meeting last week that one rather large business that pays the tax simply told the city it would have to wait — it didn’t have the funds to pay the three quarters of back taxes it owed.

Despite the businesses that haven’t paid, the tax has brought in the revenue the city had expected in its first year — about $800,000.

The tax is primarily used to pay for emergency services like police and firefighters and it also gives city property owners a property tax break.

The final language of the law will be available at the council’s next meeting on Dec. 5. A public hearing on the law will commence 7 p.m.