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Home My WebLink About07. Revised Lodging Tax Increase Proposal 07.11.2017Coversheet https://vail.novusagenda.com/agendapublic/CoverSheet.aspx?ItemID=7264&MeetingID=698[7/11/2017 4:03:46 PM] VAIL TOWN COUNCIL AGENDA MEMO ITEM/TOPIC: Revised Lodging Tax Increase Proposal PRESENTER(S): Susie Tjossem, Executive Director, Colorado Snowsport and Hall of Fame Museum ACTION REQUESTED OF COUNCIL: Seeking feedback on proposal. BACKGROUND: Executive Director of the Colorado Snowsport Museum will make a proposal to increase the lodging tax from 1.4% to 2.8% and to include as recipients of this tax all Vail based non-profts which provide cultural and educational programming. An earlier proposal to increase the tax was made at the last town council meeting. Questions 1. What documentation is the council going to require as proof the majority of the lodging community supports this proposal? 2. If the required proof and ballot language is produced during July could this proposal be considered for frst and second reading in August? 3. If it was approved on second reading on August 22nd would it meet the time frame required for ballot questions?4. If we run out of time this year when is the next earliest opportunity a tax increase proposal could be placed on the Town of Vail ballot? ATTACHMENTS: Description Lodging Tax Increase materials VAIL LODGING TAX INCREASE PROPOSAL PROPOSAL Ask Vail voters to double the Vail Lodging Tax from 1.4% to 2.8%, which would generate an estimated $3,080,000 in annual proceeds to be directed to support the annual operational expenses of the non-profit organizations, with headquarters in Vail, that provide cultural and educational programming to Vail visitors. WHY A LODGING TAX? To put and keep “heads in beds” a community must provide exceptional experiences. Vail enjoys iconic and diverse cultural and educational facilities and programming, provided by non-profit organizations, which meet those demands. The lodging community benefits the most from the non-profit organization’s having financial stability. Vail’s current lodging tax of 1.4% is one of the lowest in Colorado and in mountain resort communities. Even with doubling the lodging tax to 2.8% Vail’s lodging tax would be lower than 50% of the competition. JUSTIFICATION Successful cultural/education non-profits across the state receive substantial operational support from a dedicated tax. This form of tax has been successfully implemented by many other Colorado communities including Aspen, Breckenridge, Telluride, Frisco, Denver Metro Area, Boulder, Loveland, and Longmont etc. QUALIFYING ORGANIZATIONS Non-profit organizations headquartered in Vail that have a cultural/educational facility or provide cultural/educational programing in Vail for Vail lodging guests. OVERSIGHT An Advisory Committee, appointed by the Vail Town Council, would oversee an evaluation system with “heads in beds” performance criteria and make recommendations of revenue distribution on an annual basis. Criteria could include, but not be limited to, having a permanent year-round facility, quality and quantity of programming, number of lodging guests impacted, marketing impressions, and/or annual operational budget. June 28, 2017 VAIL LODGING TAX INCREASE PROPOSAL FUNDING TIERS Denver Scientific and Cultural Facilities District Vail Local Marketing District Tier I institutions have solid reputations for regional and national excellence. In addition to drawing attendees from the seven-county metro-area and greater Colorado, Tier I organizations generate considerable out-of- state tourism. Tier Institutions share 65.5% of the funds. Tier I institutions have solid reputations for regional and national excellence and provide diverse cultural and educational programing that attracts and keeps "heads in beds". Tier 1 institutions operate a year-round facility in Vail, are headquartered in Vail, and provide at least 60% of their cultural and educational programing in Vail. Tier I institutions share 60% of the funds. By statute, Tier I is comprised of the five major regional institutions: Denver Art Museum, Denver Botanic Gardens, Denver Museum of Nature and Science, the Denver Zoo, and The Denver Center for the Performing Arts. By statute, Tier I is comprised of XXXXXXX, XXXXXXX, XXXXX Tier II organizations include regional organizations offering excellence in science and culture. By statute, Tier II organizations receive funding based equally on two factors: 1) qualifying annual income, and 2) the organization's paid attendance. Tier II organizations receive 21% of SCFD funds. Tier II organizations include Vail organizations offering excellence in cultural and educational programing in Vail. By statute, Tier II organizations receive funding based equally on three factors: 1) year-round programing 2) diversified programing for multiple demographics 3) overall participation. Tier II organizations receive 30% of VLMD funds. Tier III recipients include an astonishing array of small organizations with cultural and scientific missions. Tier III organizations benefit our neighborhoods and provide outlets for the most personal cultural interests. Many provide opportunities for members of the community to be involved as performers and educators. Tier III organizations receive 13.5% of the SCFD funds. Tier III recipients include an astonishing array of organizations, located in Eagle County, with cultural and educational missions. Tier III organizations benefit our Vail neighborhoods and provide outlets for the most personal cultural interests. Many provide opportunities for members of the community to be involved as performers and educators. Tier III organizations receive 10% of the funds. June 28, 2017 VAIL LODGING TAX INCREASE PROPOSAL Market Comparison Marketing District/Lodging/Accommodation Tax Current Resort/Town % Note Snowmass 12.80% Denver 10.75% Lake Tahoe East Shore 10.00% Fraser 9.70% Winter Park 8.90% Lake Tahoe West Shore 8.00% Avon 4.00% Breckenridge 3.40% Eagle 2.66% ($4 per day. Avg room $150) Frisco 2.35% Aspen 2.00% Vail 1.40% Steamboat 1.00% Beaver Creek 0.96% Park City 0.50% Proposed Resort/Town % Note Snowmass 12.80% Denver 10.75% Lake Tahoe East Shore 10.00% Fraser 9.70% Winter Park 8.90% Lake Tahoe West Shore 8.00% Avon 4.00% Breckenridge 3.40% Vail 2.80% Eagle 2.66% ($4 per day. Avg room $150) Frisco 2.35% Aspen 2.00% Steamboat 1.00% Beaver Creek 0.96% Park City 0.50% June 28, 2017 2008 Colorado Community Tax Rate Comparison as of October 31, 2008 Steamboat Aspen Breckenridge Durango Vail Telluride Denver Local Sales Tax 4.75%2.20%2.50%3.00%4.00%4.50%3.62% County Sales Tax 1.00%3.50%2.875%2.00%1.50%1.00% State Sales Tax 2.90%2.90%2.90%2.90%2.90%2.90%2.90% Other Tax (if applicable)0.40%1.20% Total Gen. Sales Tax 8.650%9.000%8.275%7.900%8.400%8.400%7.720% Lodging Tax 1.00%2.00%2.40%2.00%1.40%2.00%7.13% LMD Tax 2.25% Total Tax 11.900%11.000%10.675%9.900%9.800%10.400%14.850% Other Tax (if applicable) .38% F&B and Liquor 2% LMD funds air program. .25% increase in sales tax Nov 11 to support air. Summer mrktg funded by former 3.3% vendor collection fee. 1% lodging tax funds summer marketing, split with transportatio n. Nov. 2009 Ballot Issue: 1% LMD increasing lodging total tax to 2%. .4% tax is Transit County tax includes a .75% Mass Transit Tax. Mrktg is funded by 3.3% of sales tax, .4% of 1% of the 2.4% lodging tax and BOLT tax (Business & Occupation License Tax) Mrktg is funded by 2% lodging tax (less 2% for city & 1.9% for county) County tax includes a .5% Mass Transit Tax. Local Marketing District tax at 1.4% funds summer marketing efforts. Nov. 2009 Ballot Issue: .6% sales tax increase for CARE Tax- Community Supports, Arts, Recreation & Events. Total Gen. Sales Tax would be 9% updated 2013 x National Sales Tax Average = 8.573% National Lodging Tax Average = 13.7% 2008 Colorado Community Tax Rate Comparison as of October 31, 2008 Boulder Crested Butte Mt.Crested Butte Estes Park Glenwood Springs Snowmass Village Winter Park 3.41%4.00%4.50%4.00%3.70%3.50%5.00% 0.65%1.00%1.00%0.80%1.00%3.50%1.00% 2.90%2.90%2.90%2.90%2.90%2.90%2.90% 1.20%0.60%0.60%0.60% 8.160%8.500%9.000%7.700%8.200%9.900%8.900% 2.34%2.00%2.50%2.40% 4.00%4.00% 10.500%12.500%13.000%9.700%10.700%12.300%8.900% 0.15% Food Service 4% admission tax .6% tax is Rural Transportation Authority. Year round mrktg is funded by 4% LMD tax ($825,000) 0.6% sales tax in the resort communities and 0.03% sales tax in the Town of Gunnison tax is Rural Transportation Authority. Year round mrktg is funded by 4% LMD tax ($825,000) + 4% admission tax ($250,000) on jeep rentals, ski school, lift tickets, ski rentals, concerts 08 Nov. ballot issue- LMD at 2% tax for marketing. Marketing is a city department and general sales tax funded currently, but at the discretion Town Board .6% tax is Rural Transportation Authority. Mrktg funded by 2.5% lodging tax (less 20% taken out for non-profits, infrastructure, events etc Local sales tax= 2.5% Mrktg & Special Evnts+ 1% General Fund. 2.4% lodging= Group Sales. County tax includes .5% Mass Transit Tax 5% Municipal Sales Tax.1% of lodging goes to marketing plus 3.3% vendor collection fee. 2008 Colorado Community Tax Rate Comparison as of October 31, 2008 Beaver Creek Avon CopperMtn 5.35%4.00%0.125% 1.50%1.50%2.75% 2.90%2.90%2.90% 9.750%8.400%5.775% 0.96%4.00%6.00% 10.710%12.400%11.775% 5% Activity Assessment 5.35% General Assessment, .96% Lodging Assessment and 5% Recreation Assessment on lessons & rentals- NOT A TAX (assessments are taxable)- County tax includes a .5% Mass Transit Tax County tax includes a .5% Mass Transit Tax County tax includes a .75% Mass Transit Tax. .125% local sales tax funds Housing Authority. 6% is a general Resort Surcharge (lodging, rentals, retail)