When Tom Yerkey and myself met with Greg Ralph, John Engelbrecht and Don Jackson last September, we came to an agreement. All three said $2.00 was better for them, but $2.50 was fine. If fact, between city council meetings and private meetings, the city has met with the lodging group close to 20 times. In fact, the city council has never approved a tax of higher than $2.50 for 2009. I’d say not only good faith, but as Greg, Don and John said, we can do that, in fact we will agree to publicly support that number. Obviously that didn’t happen.
The attitude this tax was somehow illegal was only shared by a few lodgers and their lawyer. The city attorney, county attorney, the Colorado Department of Revenue and the state supreme court all said that this tax was legal. It has never been in conflict of the CCVB tax.
Now, the latest difference here is the tax has somehow changed. This is not true. Since the beginning it has been an occupational lodging tax. Billed if there is a customer in the room, the lodge owner does not pay anything on an empty room, therefore passed onto a customer. The lodge has legal authority to bill the customer for this tax in the exact same way as the CCVB tax and the local sales tax. Three separate line items. All three are recognized as taxes and therefore are not part of the room rate or the franchise fee. There are some who wish to distort these facts. I cannot respond to every claim or every misrepresentation.
I have chosen not to speak out until now in an effort to see all sides of the debate. I’m a man of my word. I agreed to lower the voter approved $4.82 tax to $2.50. I have consistently voted for that. As of today, the tax is still $2.50. Further, this tax has not started yet, so the claim the lodging industry is down because of this tax hardly warrants discussion.
The lodgers have been asked to join the recreation commission to have a direct say in how money is spent, but have given no response. Money will go to, at minimum, the pool, baseball, football, softball, soccer, tennis, dog park, senior recreation activities, youth recreation activities, the arts and trails. Nearly all citizens and all tourists clearly benefit and it’s good for business.
We have asked the voters if they want to tax visitors to help fund these things. They said yes. It doesn’t really matter by how many votes. We live in a country where majority rules. If you disagree with 2B, I hope that you too would say, “I agree to disagree with you, but I’m not going treat you differently.” The people of Salida need to work together, not fracture one another. If a majority of people believe something, then we all need to get on with making that the best it can be.
Scott Damman,
Salida City Council
Thank you Scott Damman. The people of Chaffee County have spoken with their votes. This should have ended with the results last November. As someone who travels extensively and uses hotels all the time through out or country, I have never balked at the numerous local taxes hotels add on. Actually, I expect it. Furthermore, $2.50 is nothing these days, especially when adding up travel expenses. I also agree with Mr. Damman that this tax will make our area more desirable a place to live and or visit.
Thanks, Scott, for sharing your point of view. The people spoke, by whatever margin, and that should be that. I also agree with Tim Brown’s comments above. We need funding to improve the facilities that draw tourists to our area. I travel frequently, and often end up paying $10 or more above the quoted room rate for various taxes. It seems to be the way of the world and it never prevented me or anyone I know from staying where we wanted to stay. That being said, these small “don’t mean much” taxes have run amok. The following list has made its way around the internet for years, but I think it bears repeating here, only partially tongue in cheek.
Tax his land,
Tax his bed,
Tax the table
At which he’s fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries, then
Tax his tears.
Tax his car,
Tax his gas,
Find other ways
To tax his a**
Tax all he has
Then let him know;
That you won’t be done
Till he has no dough.
When he screams and hollers,
Then tax him some more,
Tax him till
He’s good and sore.
Then tax his coffin ,
Tax his grave,
Tax the sod in
Which he’s laid.
Put these words
upon his tomb,
‘Taxes drove me to my doom…’
When he’s gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (42 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Sales Tax
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Non-recurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax
It is said that none of these taxes existed 100 years ago.
I have to disagree. I think the voters thought they were passing a lodging tax, not an occupational tax. There is a huge difference but it has been obscured by the resemblance between the terms “occupational tax” and “occupancy tax” (another term for lodging tax). An occupational tax, choosing a specific occupation (in this case, that of renting accommodations) and singling that vocation out for a unique tax, is difficult to justify and thus rarely implemented. Unless one can pin the community impacts of an occupation solely and squarely on that occupation, and then come up with a solution to those impacts that requires funding, it is an unfair and discriminatory form of taxation. An example of where such a tax might be warranted would be to tax liquor store owners adjacent to an Indian reservation and then use the resulting revenue for a treatment center. In the case of lodging in Salida, whatever negative impacts there might be are far outweighed by the positive economic contribution realized. There is no rationale for singling them out for an occupational tax.
Using “the voters have spoken” as support for passing this measure is disingenuous. It ignores the fact that the voters were not asked the right question on the ballot. I find it difficult to fathom how this council feels so certain of its mandate when neither they, nor the voters, knew at the time of the election exactly what it was that was being proposed. I’m sorry if my insistence on a little rigor here seems offensive to some of my friends and countrymen. I do not hold our differences against them. Nor, however, will I be surprised when true division in our community erupts after passage of this ordinance. It is already in the cards. And it is the price we pay for unfairly singling out certain of our neighbors to carry the burden that rightfully belongs to all of us.
Greg Felt
I appreciate that the arguments above are cool, calm, objective and made without insult or rancor. It would seem that if discussions are kept to this level, compromise and agreement are not only possible, but probable. I am a frequent visitor to Salida, and often stay in one of the local motels. I do utilize the recreational facilities, particularly the pool and watching baseball. I travel quite a bit and consider local lodging taxes (called by many names, but never “vocational taxes”) and consider these costs of travel. I pay many dollars in state gasoline taxes in states in which I do not live, and don’t see these as occupational taxes on gasoline station operators. I do not smoke, but it is hard to say that tobaco taxes are occupational taxes on merchants who sell these items. I love visiting Salida and have met so many wonderful people in your town. Keep it friendly for your visitors and for each other.
In response to Mr. Damman’s letter – it is true that last fall the lodgers agreed not to oppose 2B. We agreed to this based on 2 things. First, we were provided with a memorandum dated 10/21/08 from Leavenworth & Karp (City attorney) to Mayor Rose and Mike Copp that discussed the effect of the occupational lodging tax. It stated, and this is a direct quote that I will be happy to provide anyone who cares to see it “the City’s proposed occupational lodging tax must be collected from the person to whom the accommodations are rented, not the owner.” This clarified to us a tax on the visitor.
We also came to an agreement with Council to set the tax to $2.50 with the expectation that its future escalation would be based on this quote in the 10/15/08 agreement “the city will use the average daily rate for lodging prepared by Smith Travel Research industry group for the previous year as well as consider the annual CPI Index for the Denver/Boulder metro area.”
Both of these things are no longer true. In the December ordinance it stated “the person to whom the accommodations are rented shall pay the tax.” Then in January it was changed to “it is a tax on persons and entities furnishing short-term accommodations.” It also states “with an automatic increase to $4.82 in calendar year 2010.” Obviously this tax “has somehow changed” per Mr. Damman’s words.
And one must question if the Council understood all along that it was a tax on the business owner how could they have voted on and approved the December ordinance that clearly lists the visitor paying the tax.
Yesterday the lodgers consulted with our attorney and a specialty tax attorney. Both have verified that in no way is this a pass-along tax. The City does not have the legal authority to authorize us to do so. Simple logic suggests that if I am responsible for the tax I cannot simply choose to pass it along to the visitor. The IRS and the Colorado Revenue Department will have something to say about that. It must be included in the rate, we must pay sales tax on it, and for some, perhaps pay franchise fees as well. This is not what we agreed to. Obviously we would not have supported such a tax. Would you on your occupation? And just your occupation?
For those who argue it is just semantics as to whether the visitor or the lodger pays the tax, I challenge you to research it to see for yourself.
I am saddened at the City’s bait and switch tactics. I really wanted to believe differently. I am deeply dismayed with 2B supporters for not showing more concern for your neighbor business owners during dramatic decreases in the economy. If this tax is collected, it will come directly from the pockets of lodging owners, both large and small. And these folks will not be spending that money at local businesses and for local services – it will go instead to the pool and trails, etc. I suppose time will reveal the truth of which is a misrepresentation Mr. Damman.
I speak as one of the majority who voted for 2B, who is now feeling growing disquiet as this process unfolds. There are a couple of things that I think all sides to this issue can agree on. The current state of the Hot Springs pool is an embarrassment, and it makes sense to come up with a way to get visitors to the city to contribute to its repair and upkeep.
Following conversations prior to the election with those involved, including the mayor and lodging owners, I voted for an occupancy tax. I am no attorney, but I now see the difference between an occupancy tax, and an occupation tax. [ I think ]. While it is easy to pass this off as mere semantics, the devil, as they say, is in the details. For example, as a realtor, I would support a tax on real estate transactions in the county to fund open space, but I would not be comfortable with a tax on realtors themselves to provide this. Tax the transaction, not the occupation. Clearly, what I voted for on Nov 4 is different to what the council is now considering.
The Council is to be applauded for thinking outside the box to find solutions to maintaining and enhancing the City’s infrastructure and attractions. But I think we all have to admit that the handling of this issue has been fraught with error. It is too easy for those of us who voted for the measure to sweep these differences under the mat and get on with life, but now is the time for this issue to be dealt with.
Lodging owners are an integral part of our local economy and community. Small towns like ourselves need to have a united vision for the future if we are to survive and thrive. I would urge all parties to face up to this issue now while it is relatively minor.
As a former member of Salida’s lodging community, I must say that I, myself was confused about this issue at the time I cast my vote. I had 2 understandings which lead me to voting “Yes” on this issue:
1. Ballot Item 2B was a tax that would be collected by the lodging properties, but paid for by the visitor (as is the case with the current City, County & State Sales tax, as well as the County Lodging tax).
2. The Lodging Community and the City had reached an agreement on the tax amount deemed reasonable so as not to represent an undue burden or hardship on the party paying the tax (ie the visitor). It appeared care was being taken to avoid placing the City of Salida’s lodging industry at a competitive disadvantage relative to lodging-related taxes.
If at any time I thought a “Yes” vote on this ballot issue would have put me in the position of encumbering another business owner with a paying a premium, fee, or tax simply because they happened to be in a particular industry segment, I would have cast a “No” vote.
Our lodging partners should not be left to solve the financial circumstances of any City or County owned & operated facility, park, trail or otherwise. Yes, tourism is a leading economic component of Salida & Chaffee County. However, lodging property owners are not the only businesses who benefit from the visitor; in fact I would suggest ALL businesses are beneficiaries. The list is long of other business partners & stakeholders that contribute to the visitor’s experience not the least of which are restaurants, galleries, shops, outfitters, gas stations, convenience stores, grocery stores … you get the idea. Then apply the “trickle down” effect of dollars earned by any tourism-related business (owners and their employees) in this community and you soon realize what keeps this town’s economy flowing.
Tax the visitor if you must, but don’t carve out a single industry to pay a premium just because they sell a hotel room, a plate of food, a gallon of gas, or a boat trip down the Arkansas.
We should all be doing everything we can in today’s economic environment to make certain we have guests still arriving, spending their hard earned dollars, having a great experience and at the same time supporting this community.
Passions are running high on all sides of this issue, but let’s not take our eye off the ball: we can only succeed and survive if our common goal is in fact for our fellow business owners and community members to succeed and survive.
For those concerned about the details of 2B, Chuck Rose explained things pretty clearly at the most recent council meeting.
Salida is a statutory city. As such, according to Chuck, it cannot levy a lodging or occupancy tax as they are traditionally defined. Therefore, 2B has been written as an occupational tax, but it is to be calculated in the same manner as a lodging tax. Lodgers will owe $2.50 per occupied room per night.
In light of the above, the city is taxing the occupation because it cannot legally tax the transaction.
Broad characterizations of the city council as unfriendly towards business tend to ignore the repeal of property taxes, which benefits many businesses in the city, including lodgers.
We’ve set up a forum for the continuing discussion of 2B in the forums section of the site.
Hugh Young responds to criticism and further clarifies the issue in a letter posted today.
Sharon Rowe captures what I and the many other individuals I’ve talked to believe we voted for:
“1. Ballot Item 2B was a tax that would be collected by the lodging properties, but paid for by the visitor (as is the case with the current City, County & State Sales tax, as well as the County Lodging tax).”
And this is exactly how the tax works. The visitor will receive a bill with room rate (assume $79)and the $2.50 OLT listed along with other taxes. The visitor pays the bill, the hotel operator forwards that money to the City.
The Lodger’s Tax or Occupancy tax versions, which the City can’t legally use because we are hobbled by statutory status, would have worked as follows: The visitor receives a bill with room rate and the Lodgers Tax rate listed (the state average is 3.3% so let’s use that as an example). On the bill the visitor sees $79 + $2.60 (3.3% of $79) listed along with other taxes. The visitor pays the bill, the hotel operator forwards the $2.60 tax to the City.
What is the difference? The hotel owner is clearly just an intermediary here.
I find it difficult to comprehend how hotel owners thought this might have worked differently. How would the City have collected the tax directly from a visitor?