Receipts from local-option taxes were down 5.45 percent in the city of Ketchum for fiscal year 2020, with some categories showing gains and others showing losses.
During the fiscal year—which ran from Oct. 1, 2019, to Sept. 30, 2020—the city collected $2,515,292 in local-option taxes, down from $2,660,209 in fiscal year 2019.
The city collects a 3 percent LOT on room sales (including both hotel rooms and short-term rentals), a 3 percent LOT on by-the-drink liquor sales, and a 2 percent LOT on general retail sales and building materials (but excluding groceries). The city is authorized by the state to collect the taxes through a law that allows certain resort cities to tax specific sales categories to offset in their budgets the impacts of hosting large numbers of visitors.
“The LOT money remains in Ketchum and is invested in a wide range of city services and economic development initiatives that benefit local residents and businesses,” the city states on its website.
The city also collects an additional 1 percent LOT in the same sales sectors through a voter-approved initiative to support commercial air service in the Wood River Valley. Those tax funds are set aside and transferred monthly to the Sun Valley Air Service Board, which allocates the funding to subsidize and market commercial air service into Friedman Memorial Airport in Hailey.
In fiscal year 2020, the city collected $2,186,248 through the additional “1 Percent for Air” tax, down just over 4 percent from the previous fiscal year, when it collected $2,277,713 in separate funds allocated to the Air Service Board.
In August of this year, city LOTs brought in $261,574, down just over 9 percent from August 2019. Receipts from August were collected by the city in September and were included in the fiscal 2020 budget, before it ended on Sept. 30.
In July 2020, city LOTs brought in $278,485, down just over 14 percent from the previous fiscal year.
Tax receipts in the specific collection categories could offer some insight into how the coronavirus pandemic affected business in the city. (The following figures do not include collections from the additional 1 percent to support air service.)
In the retail sales category, businesses in the city collected $152,057 in August, down from $167,006 in August 2019—a drop of about 9 percent. Retail LOT receipts were down about 12 percent in July, but were up more than 17 percent in June. March and April—after the onset of the pandemic and the early closure of Sun Valley’s ski mountains—were hit hard, down approximately 31 percent and 48 percent, respectively.
LOT receipts in the city from hotel-room bills were down sharply over the summer. From August receipts, the city brought in $21,159, down almost 47 percent from the previous year. In June and July, receipts were down approximately 55 percent and 37 percent, respectively. Hotel receipts were also down sharply in March, April and May. For the fiscal year, the category was down 20.53 percent.
Contrarily, receipts from condominium rentals were up approximately 4 percent for fiscal year 2020. The figures were up nearly 25 percent in August. Although there were significant declines in March, April and May, they were offset by significant increases in most other months.
The liquor-by-the-drink sales category was hit hard after the pandemic took hold. It brought in $237,298 during the fiscal year, down about 18 percent from the previous year. From March through August, decreases in collections were approximately 47 percent, 91 percent, 47 percent, 40 percent, 30 percent and 17 percent, respectively.
Collections from sales of building materials were up 10 percent for the fiscal year, from $306,627 in fiscal 2019 to $337,345 in fiscal 2020. Receipts were up in all months of the fiscal year except April, May and June.
Grant Gager, the city’s director of finance and internal services, said the city has been adjusting to the fluctuations in LOT receipts.
“The city continuously monitors the budget adopted by the City Council and the [fiscal year 2021] budget anticipated less revenue,” he wrote in an email to the Idaho Mountain Express. “So, in that regard, [fiscal year 2021] is starting out as anticipated.”