Hailey AirBnB

In October 2020, short-term rental sales generated around 6.5 percent of Hailey’s total local-option tax revenue. In October 2019, they generated 4.4 percent of LOT revenue.

The city of Hailey collected $522,822 in local-option tax revenue stemming from sales activity in fiscal 2020, marking a 24 percent drop compared to fiscal 2019.

Fiscal 2020 spanned from October 2019 to September 2020. The city collects the monthly local-option tax—or LOT—the following month. September sales activity, for example, is reflected in October LOT totals.

Hailey currently levies a 3 percent local-option tax on car rentals, hotel rooms and short-term rentals; a 2 percent tax on alcohol by the drink; and a 1 percent tax on restaurant food.

From Oct.1, 2019 to Sept. 30, 2020, the city generated $228,502 in tax revenue from hotel room sales and rental car sales, down by about 22 percent from the $294,646 collected in fiscal 2019. Alcoholic beverage sales in fiscal 2020 generated $41,764 for the city, a 36 percent decrease from fiscal 2019’s $65,310.

Hailey’s 1 percent tax levied on restaurant sales this past fiscal year fell from $166,210 in fiscal 2019 to $144,675 this past fiscal year, a 13 percent decrease.

The city’s short-term rental tax category saw the greatest fluctuations in fiscal 2020. Stifled by the COVID-19 pandemic, revenue from short-term rentals took a nosedive from $559 in March to a mere $19 in April—a 97 percent decrease in one month. Similarly, tax revenue generated from lodging and rental cars dropped from $14,646 in March 2020 to $5,472 in April 2020.

Local-option taxes generated from short-term rentals, however, made a giant comeback this past summer, increasing from only $89 in May to $2,560 in June—a 2,776 percent increase. In July, the city brought in a healthy $4,004 from short-term rentals.

Local-option tax revenue from short-term rentals continued to hold steady in August and September at $2,527 and $2,946, respectively, marking a 5 percent decrease from the $5,737 generated in August and September 2019.

In October 2020, the city’s revenue from short-term rentals—$2,789—actually eclipsed the $1,797 generated in October 2019, a 55 percent jump year-over-year. That piece translates to 6.5 percent of Hailey’s total LOT revenue in October, versus 4.4 percent in October 2019.

Around 2 percent of Hailey’s housing stock is dedicated to short-term rentals, according to Community Development Director Lisa Horowitz. A quick search of AirBnB on Monday turned up 54 short-term rentals listed within the city limits.

Mayor Martha Burke and City Council members will continue to discuss short-term rental and accessory dwelling unit regulations in January.

“I feel very strongly that we should spend a substantial amount of time looking at short-term rental [regulations] and putting rules in place that will stand up if challenged,” Burke said in a Nov. 30 council meeting.

Since its implementation 13 years ago, the city’s LOT, also known as a “tourist tax,” has brought in some $6 million in revenue. It continues to support street maintenance and downtown beautification projects, according to tax receipts sent to the Express on Friday.

Email the writer: ejones@mtexpress.com

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