City could send DOR after resort tax scofflaws

The city of Columbia Falls could soon sic the Montana Department of Revenue’s Collection Bureau on a few businesses that are not paying the city’s 3% resort tax.

The matter was discussed, but not formally voted on, in the city council’s first meeting of the year last week.

City attorney Justin Breck outlined the city’s options for the apparent scofflaws, noting the city could file suit in civil court in an attempt to collect the funds or use a private collection agency, but he also noted that the city could ask the Department of Revenue for assistance as well. The DOR’s collection bureau can also help, he found in his research. They would take a portion of the proceeds for their work, but they also could put a tax lien on a property if a business or entity refuses to pay.

Plus, a letter from the DOR would likely have more persuasive power over delinquent accounts than one from the city or a collection agency, Breck surmised.

The number of businesses that haven’t paid the tax is small, noted city manager Mark Shrives ­— two or three—but the funds are adding up.

The city will do a budget amendment in February to adjust this year’s budget after about $83,413 were collected in arrears from last year. All told, the city has been collecting about $1.5 million annually in the past couple of years from the 3% tax, which is largely geared toward tourists.

The tax isn’t a tax on a business, it was noted, it’s a tax on goods sold that fall under the parameters of the resort tax. Some businesses simply haven’t paid, ever.

In other news:

Shrives told council they would go ahead and have new microphones and a better sound system installed in city hall. 

People in the audience have complained they can’t hear and people who listen in on Zoom have also raised the same issues.