S’mass to pay guests’ tax bills
December 20, 2002
The Snowmass Village Marketing and Special Events Board on Thursday narrowly approved spending $160,000 in public funds to ensure that some visitors to the resort aren’t upset about a new town sales tax or a new lodging fee.
To qualify for what is essentially a town-sponsored tax rebate, visitors must have paid in full for their rental by Dec. 1, when a new townwide 2.5 percent sales tax took effect.
Winter rentals are typically paid in full 60 or 30 days out, and so most customers think their lodging bills are already settled. But under Colorado law, a sales tax on lodging is due upon occupancy. So the new tax applies, even on rentals fully paid before Dec. 1.
The 2.5 percent sales tax approved by voters in November is for marketing, special events and public relations.
Some Snowmass customers have only recently been told by their property management agent that the 2.5 sales tax is now due on top of their previously paid bill.
And some are, or were, complaining.
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While $3,000-a-night luxury-home rentals are not uncommon, the typical rental bill over Christmas and New Year’s is about $10,000, which means a potentially surprising $250 tax bill.
A group of property managers told the Town Council this week that it was not about the money – that their clients can afford to pay the new tax – but it is more that they are annoyed at the additional bill on top of something they thought was settled.
“A contract is a contract is a contract,” said Barbara Lucks, the general manager of the Woodrun V condos on Fanny Hill.
However, most lodging contracts do contain a clause that all taxes apply and are subject to change without notice. And some property managers in Snowmass informed their clients several months ago about the new tax proposal.
But others apparently have not stayed in close touch with their clients, at least about taxes, and are now fearing a scene at the checkout counter.
“I don’t think we want to educate our clients about our taxes,” said Mike George of the Snowmass Lodging Co. “They don’t want to hear it. They want to hear how good the skiing is.”
And, said Lucks, it would be much better for the guests to not even see the new tax increase.
“We would like a guest’s bill to reflect the amount they were quoted at the time of the reservation,” she said.
The marketing board agreed that property managers could pay the tax themselves so customers wouldn’t see it. Then, property managers could seek reimbursement from the town.
Complicating the issue is that there are two new taxes in Snowmass Village, one passed by town voters and the other passed by the Snowmass Village Resort Association board.
For some guests, if their rental is in the original West Village area near the Snowmass mall, their bill will include a new .9 percent increase in the “civic assessment” charged by SVRA, which is just like a sales tax.
That assessment is not a marketing tax, but instead is meant to offset a $7-per-person conference-center-user fee that the SVRA was having trouble collecting from lodges.
The typical additional tax on a condo rental in West Village after the .9 percent hike is estimated to be about $25.
“I don’t know of anybody [who] has a big problem with it,” said Mary Harris, the manager of several moderately priced lodges and a member of the marketing board.
But to make the SVRA’s new “tax” increase a non-issue for those who prepaid by Dec. 1, it could take up to $100,000, as there are close to 1,500 hotel rooms and condos in the West Village.
And that’s on top of the $60,000 need to give a “customer courtesy credit” to guests staying outside of the SVRA’s boundaries.
Despite hearing that only a “handful” of customers were upset, the marketing board saw the issue as one of both customer and public relations, and approved spending the town’s marketing sales tax revenues on the matter.
Marketing board chair Bob Purvis voted against the rebate plan, principally because he disagreed with the idea of paying to offset the SVRA’s fee increase. His fellow board member, Reed Lewis, also voted against it.
“Why should we give the money away?” Lewis asked. “I don’t agree with dealing with the SVRA side of it.”
But marketing board members Harris, Peter D. Moore and Kyle Sharp voted for it.
It was the first significant decision by the new board, which just approved its bylaws yesterday and has yet to hire a marketing director, create a marketing strategy or develop a budget for how it plans to spend the $2.5 million it hopes to collect each year.
After its meeting, Purvis as marketing board chair went to the Town Council for the necessary financial approval of their decision.
The marketing board got the approval it needed, but it may have been based more on the council’s prior commitment not to second-guess the marketing board’s decisions than on the soundness of their plan.
“We might just as well have written a check to the condo owners,” said Councilman Arnold Mordkin, who said he voted for the expenditure “with extreme distress.”
He had earlier made the case that SVRA was an association made up of condo owners, and it was they who had just decided to tax their guests, not the town.
And that now the town was being asked to cover the costs of the SVRA tax hike so the resort’s guests didn’t have to see it.
“This is just not right,” Mordkin said. “This is absolutely not right.”