C-Falls resort tax collections higher than expected in first eight months

Just eight months in, the Columbia Falls resort tax has already raised more money for city coffers than expected.

The tax has grossed $515,000 through May 30, City Manager Susan Nicosia told City Council recently.

There’s still another month to go in the city’s fiscal year, so the amount collected will be even higher. The original estimate was the tax would raise about $450,000 in its first full year.

The 3% tax wasn’t implemented until October last year, due to the pandemic, so it really hasn’t even seen a full summer tourist season.

Funds from the tax are distributed with 5% returned to businesses to administer the tax.

At this point, about $128,000 is set to go to tax relief for homeowners. That currently amounts to 14.5 mills or about $40 for a house assessed at $200,000, Nicosia noted.

The greatest portion of the tax goes toward public safety, or at this point about $283,000. The city plans on using funds to hire additional firefighters in the coming months.

So far, bars and restaurants have accounted for about 46% of the revenue collected. Retail has been about 50% and just 4% has come from lodging.

Those numbers will likely shift a bit as the city sees the tax over a full summer tourist season.

Marijuana sales have also helped boost the tax, according to the city.

The tax does not apply to groceries, with the exception of candy and soda. It does not tax medicine, hardware supplies, auto parts, cars and trucks, motor oil, gasoline, newspapers, vehicles, furniture, dishes and the like.

It centers on the service industry, such as restaurant meals, alcohol, vacation rentals, hotels and motels, car and truck rentals and items known as “luxuries,” under the law, which was passed by voters in June 2020.

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