The Sun Valley City Council on Dec. 5 unanimously passed an ordinance to implement a 1 percent increase to the local option tax to promote commercial air service for the Wood River Valley.
Voters in Sun Valley passed the “LOT for air” last year but the tax could not be implemented because the ordinance included a provision that Ketchum must also approve the special tax increase. The initiative failed on last year’s ballot in Ketchum but succeeded last month, allowing Sun Valley to implement its already-passed LOT ordinance.
During the meeting, City Council members voiced concerns over collecting LOT funds. Outgoing Councilman Bob Youngman said Sun Valley LOT receipts have declined by 4 percent over the past five years.
“We’ve been told visitors are up, but LOT receipts have gone down,” Youngman said. “We’ve talked about this with the Sun Valley Co., and this to me is an important activity to make sure everything is being accounted for and there are no misunderstandings.”
Councilwoman Michelle Griffith said the room rates Sun Valley Co. offers also play a big role in LOT receipts.
“The issue with the LOT is two-pronged,” Griffith said. “We could have more people staying at Sun Valley Co. hotels, but if they’ve elected to charge lower rates, you may see the LOT going down despite more people visiting.”
Sun Valley’s LOT for air service will be implemented on Jan. 1, 2014. It will boost the LOT by 1 percent. Sun Valley now imposes a 3 percent sales tax on lodging, by-the-glass liquor sales and event tickets. It also collects a 2 percent tax on most retail sales, and a 1 percent tax on lift tickets and season passes.