Whitefish backs resort-tax population bill

The Daily Inter Lake

The city of Whitefish is working with local legislators to support a proposed state law that would raise the population threshold for resort-tax communities, ensuring that Whitefish remains below the population cutoff.

The current population limit for resort communities imposing local-option taxes is 5,500; Whitefish's current estimated population is 8,083, Whitefish City Manager Chuck Stearns said. The proposed bill would raise the threshold to a population of 10,000.

As the law is written now, Whitefish couldn't seek another extension of its resort tax because it already has surpassed the 5,500 population threshold, Stearns said.

Sen. Ryan Zinke, R-Whitefish, and Rep. Bill Beck, R-Whitefish, are working on the bill draft.

"Originally we were going to have a bill draft created and then sit on the draft until we saw how the Montana League of Cities and Towns' tourist-tax bill fared," Stearns said. "We did not want to complicate consideration of their bill."

But Beck felt strongly that the bill should be introduced early and passed prior to consideration of the tourist-tax bill. The league for some time has pushed for a 4 percent tax that would be imposed on goods and services connected to the tourism economy.

Whitefish successfully lobbied for legislation 14 years ago to allow the city to qualify for a resort tax. Voters then approved a 2 percent tax that began in February 1996. Since then the city has collected more than $15 million for street reconstruction and property-tax relief.

The tax structure mandates that 65 percent of the revenue be used for street reconstruction. Twenty-five percent is set aside for property-tax relief and 5 percent goes to park and trail projects. The remaining 5 percent is retained by merchants to offset costs they incur in collecting the tax.

A couple of years ago voters approved a ballot measure extending the 2-percent tax another nine years, from a sunset date of 2016 to 2025.