A taxing question Taxation for tourists? - Coeur d'Alene Press: Political

A taxing question Taxation for tourists?

Coeur d'Alene officials consider resort tax, local option sales tax

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Posted: Wednesday, January 11, 2012 12:15 am | Updated: 10:37 am, Fri Nov 16, 2012.

COEUR d'ALENE - Either or, the Lake City is on board.

The city of Coeur d'Alene is supporting a pair of possible law changes that would give cities the authority to collect additional taxes.

But before calling the support a flat out tax increase, officials said either avenue could reduce the tax burden for locals.

Either avenue could also allow Coeur d'Alene to implement a resort tax - a tax on hotels, motels and other tourist targets that some smaller Idaho cities use as a way to collect revenues from visitors.

"I don't want to impede tourism, that's not the point," said Mike Kennedy, city councilman. "It would allow us to ask the voters if they would support a bed tax to have tourism pay for itself in ways it hasn't previously."

One option to do that is to remove the size limit currently in place on the resort tax.

That law, which should be a discussion point in Boise this legislative session, allows towns with populations below 10,000 - like Kellogg and Ketchum - to add a sales tax on top of the state's 6 percent rate. With voter approval, those towns can add sales tax increases on tourism targeted items.

Removing the cap would allow Coeur d'Alene, population 46,000, to put similar options before its voters.

The other route allows cities a local option sales tax.

That option, like bonds, would allow cities to increase sales taxes across the board to pay for specific projects or to go directly to property tax relief, closing after a specific time frame. Unlike bonds, however, revenues from the sales taxes would come from anyone who spends money inside the city, not just city residents, as bonds target.

Ketchum, for example, adds a 1 percent sales tax on top of the state's 6 percent.

If either option becomes law this year, a specific ballot would have to be crafted at the city level should municipalities want to bump a tax, and voters would have the ultimate say.

The city agreed to support both measures last week as a way to support local control.

"It's OK with me if people vote to raise their own taxes," said Dan Gookin, city councilman.

The Post Falls Chamber of Commerce supports both as well. The Coeur d'Alene Chamber of Commerce hasn't given its nod of approval on the sales tax option this year, although the Idaho Chamber Alliance, to which it belongs, has. In the past, the Coeur d'Alene chamber has supported the sales tax route because it's project specific and sunsets, as opposed to a bed tax, which typically stays on the books indefinitely.

The sales tax option could be headed for a ballot this November if proponents collect enough signatures to get it there. The idea has died at the Legislature - never making it out of committee for several years - so enough signatures could skip that step.

But some hotels feel that pinpointing tourism for extra money is an unfair burden for their industry. They say one business shouldn't be targeted to pay for citywide projects. It could also backfire, by driving away tourists, they said. Kellogg voters rejected a resort tax proposal in November.

"It's not right to tax any one industry," said Jerry Jaeger, president and co-owner of the Hagadone Hospitality Company, which oversees nearly 700 hotel rooms in North Idaho and hosts hundreds of conferences every year. "What we ought to be doing is figuring out a way to get more tourists to Coeur d'Alene, not punishing them for coming here."

Added to that, a 2 percent tax on the industry is already collected by the state for the Idaho Travel Council. Ten percent of that is used for administration costs, 45 percent goes to promote travel statewide and the remaining 45 percent goes to regional grants, he said.

Austin Skubi, manager of the Resort City Inn in Coeur d'Alene, said he sympathizes with both sides of the argument. In charge of running a motel, it does seem unfair to single out one industry, he said, but on the other hand travelers tend to be willing to spend a few extra dollars while on the road.

"You have to give a little to get a little," he said of the potential revenues aiding the city. "I'd rather have a nice city that people can enjoy than not have them come at all."

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  • JohnKane posted at 12:39 am on Sun, Sep 2, 2012.

    JohnKane Posts: 6

    I don't think that tourists would like to pay extra taxes when they are on vacation. They pay enough taxes as it is. Anyways, recently I have been on an animal tour and nobody asked me for any additional taxes so I suggest you consider this option carefully. It might chase people away from your location.

  • SheriffT posted at 4:39 am on Sat, Jul 14, 2012.

    SheriffT Posts: 13

    I was talking about this with a friend of mine from http://www.jimthompsonfestival.com/. Why would you want to add an extra tax in these times of economic uncertainty. How does the local council justify such a tax? Why should some business owners pay more tax than others?

  • jmowreader posted at 7:21 pm on Thu, Jan 12, 2012.

    jmowreader Posts: 1163

    Creating a room and meals tax isn't going to impede tourism because so many other communities have them already. For instance, Las Vegas charges a total 12 percent tax on rooms that are not near the Fremont Street Experience, and 13 percent tax on rooms in the Experience zone. Orlando charges 11 percent tax on rooms. And those are two of the biggest tourist destinations in the United States!

    A little closer to home, the sales tax on a room in Spokane County is close to nine percent.

    Let's throw out a number: three percent. If there was a three percent room tax added to the six percent Idaho sales tax, you're looking at a total tax of nine percent--which is still a lot lower than either Vegas or Orlando. The tax by itself isn't going to crimp Mr. Jaeger's convention business.

    The real problem we've got with destination tourism (the kind where the family says "let's go on a vacation to (fill in an area)") is we simply don't have enough activities to keep the family occupied for more than, say, two days--and that assumes the family goes to Silverwood for one of those days. We're a great place for "en route tourism" which probably isn't an official term, but it basically means you stop here, do the CdA thing for a day and go to the place you're going to spend most of your vacation. And no, turning the park between the Library and the Resort into a park is not going to change this.

  • Cody Wiench posted at 10:26 am on Thu, Jan 12, 2012.

    Cody Wiench Posts: 349

    I recall reading a lovely "letter to the editor" about improving US 95...and I also recall that almost everyone was in support of such a project. Well, a local option sales tax is literally the only way such a project would move forward in any respectable period of time. And now people are vehemently against it?!

  • wheels1 posted at 7:01 am on Thu, Jan 12, 2012.

    wheels1 Posts: 403

    This idea will not survive a public vote and will die accordingly.Neither would a vote on the McEuen Plan as curently proposed pass......BUT will continue regardless.Seem right?Stand up people,NOW is your time.

  • COG777 posted at 1:43 am on Thu, Jan 12, 2012.

    COG777 Posts: 338

    Tax and spend.....Spend and tax! If more money is needed stop spending and look at where you can cut. LCDC is also receiving money that would be going to pay for services.

    To even bring up any type of tax increase before the public while wanting to spend so much money on a park during these hard economic times truly shows how out of touch these people are.

  • Gary Ingram posted at 4:13 pm on Wed, Jan 11, 2012.

    Gary Ingram Posts: 90

    The sub title to this story says such an additional tax would increase revenue and relieve property taxes. I see nothing in the proposal to relieve property taxes. On the contrary, it is just another scheme to increase overall city spending by going after more revenue from one segment of our economy but with no offset to property tax payers. Local control is an overused cliche. What's so sacred about local control? Control is control. Very poor public policy.

  • babydriver posted at 4:09 pm on Wed, Jan 11, 2012.

    babydriver Posts: 1393

    All BS

  • Ziggy posted at 2:56 pm on Wed, Jan 11, 2012.

    Ziggy Posts: 1119

    We should definitely tax tourists. We have to construct more sewers, put in extra waterlines, keep our streets passable all for the use of tourists. Canada charges around $20 tax per room. Does that keep us from going there? Not at all. We love to visit Canada and think they have a perfect right to tax out of towners for the services they use.

  • I Carry posted at 9:22 am on Wed, Jan 11, 2012.

    I Carry Posts: 418

    How interesting----Mr. Kennedy states "It would allow us to ask the voters is they would support a bed tax."
    What?????? The council is thinking about ASKING VOTERS about a money issue? Weren't the voters just informed that they (we) elected the council do do as they (the council) pleased? How thoughtful of Mr. Kennedy to think of the minnions.
    Maybe Mr. Kennedy could put the bed tax AND the proposed park on the same ballot.
    I saw a bumper sticker the other day that read "GO GREEN, RECYCLE CONGRESS." That goes for the city council as well.

  • aayupp posted at 8:47 am on Wed, Jan 11, 2012.

    aayupp Posts: 311

    "It's not right to tax any one industry," said Jerry Jaeger, president and co-owner of the Hagadone Hospitality Company, which oversees nearly 700 hotel rooms in North Idaho and hosts hundreds of conferences every year. "What we ought to be doing is figuring out a way to get more tourists to Coeur d'Alene, not punishing them for coming here."

    no sir- this use to be a blue collar working class city before tourism. anything that will help revert back to higher paying jobs industrial jobs is a win win. i have always been in favor of a higher bed tax and resort type income for the tourists esp during the ironmen and women event.

  • ancientemplar posted at 8:05 am on Wed, Jan 11, 2012.

    ancientemplar Posts: 1146

    Cut spending and do with less rather than raise taxes. Tax, tax, tax,. It should be up to the people. I'll vote "no".

  • mister d posted at 7:38 am on Wed, Jan 11, 2012.

    mister d Posts: 1531

    I would vote for the higher resort tax. When i visit other cities, I pay them and it does not deter me from my visit as they amount to very little compared to the total trip. This would also save the locals who are struggling and can't even think about going on a vacation or staying in a hotel..

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