Wednesday, April 20, 2011

LOT receipts up, but there’s a caveat

Inclusion of Sun Valley Resort sales inflates winter totals


By TREVON MILLIARD
Express Staff Writer

A quick glance at local-option taxes would suggest that this winter was much more generous to Ketchum businesses than 2009-10, but that's not entirely the case.

LOT—commonly called the "tourist tax"—is charged monthly and applies to the resort town's main industries, making it a simple gauge for reading the economy. Ketchum charges a 2 percent sales tax on lodging and by-the-glass liquor sales, and a 1 percent tax on retail sales and building materials.

The city just released its LOT collections for the last full month of winter—February—and receipts were above and beyond February 2010 by 18 percent. Even better, LOT increased 21 percent for the bulk of the winter season, November through February. That makes it seem like spending increased in Ketchum's bars, stores, restaurants and hotels by an average of 21 percent. However, the lion's share of the increase is attributable not to more dollars flowing through town but the inclusion of the valley's largest private business, Sun Valley Resort, into LOT collections.

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Up until this winter, Sun Valley Co. never charged LOT for lift tickets and retail sales at the River Run base area, the resort's main skier access to Bald Mountain. However, it was included this year because the resort requested that the city annex the land—formally a part of the county—into the city so it could build its planned 138-acre ski base village there, which would include a 110-foot-tall hotel.

The city can't legally provide LOT numbers for a specific business, such as Sun Valley Resort. However, City Administrator Gary Marks said, evidence of Sun Valley Resort's effect lies in retail LOT.

For example, retail LOT increased an average of 24 percent this winter over last. In October (before the mountain opened to skiers), retail was up a mere 6 percent over October 2010. However, when the ski mountain opened in November, retail LOT totaled 25 percent more than November 2010. This peak remained constant through February.

Retail provides, on average, 60 percent of a month's LOT.

Despite the drastic jump in retail, the other sectors didn't experience correlating improvements. Hotels reported 2 percent less business, and building-material sales were down 9 percent. Short-term condo rentals—less than 30 days—posted a modest 6 percent increase. By-the-drink liquor sales increased 12 percent, but still a far cry from a 24 percent jump in retail.

Trevon Milliard: tmilliard@mtexpress.com




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