Tourism tax emerges from Missoula citizen survey, but industry urges caution

Posted at 8:40 AM, Apr 13, 2018
and last updated 2018-04-13 10:40:33-04

MISSOULA – A new survey shows Missoula residents would support the idea of a tourism tax if the city could use the money to ease their own property tax burden. However, tourism industry leaders say the idea isn’t as simple as that. 

The City of Missoula’s first "Citizens Survey" in seven years discovered residents are generally satisfied with their quality of life. But they are complaining about taxes. And a question asking whether people would support a local option sales tax on tourist services to ease the local tax bill getting traction.

"29-percent of people who said that they were neutral about the tax said that they would not be more supportive if it went to property taxes. But 71% of these folks who said that they were neutral to start with said that ‘yes’ they would be more supportive if knew a significant portion of that went to property taxes," said Jessica Miller the Citizen’s Service Manager for the City of Missoula.

But beyond the numbers, the local sales tax option is more complex. For one thing, Montana still caps the option for towns smaller than 5,500 people and Mayor John Engen says it will take Legislative action to change that. New members of the council said the concept seems good, but they’re not sure if Missoula gets enough tourists to make a local tax difference.

"Because I know some of these cities that have it, like Whitefish, a lot of their services, police, fire, infrastructure are used heavily by tourists in the winter time. We don’t really have any huge draws in a particular season and from what I’ve read that we don’t actually have as much demand for tourism as some of these other communities do," Missoula City Councilman Jesse Ramos said.

However, tourism industry leaders advise the council to use caution. Destination Missoula Executive Director Barb Neilan, says tourism already contributes more than $275 million per year to Missoula’s economy, with $15 million going to state and local taxes, cutting each family’s tax bill by more than $400.

Neilan also warned that it wouldn’t just be tourists paying the tax.

"My concern is that we keep going back to the same well, and asking the same people to continue to have the burden on their shoulders when it’s a full industry and it’s not being looked at that," Neilan told MTN News.

"Because if you start telling people we’re going to tax what you’re eating, if you go out to a restaurant you’re going to pay the tax just the same as a visitor. Then it doesn’t become a visitor activity tax anymore," she added.

Neilan is offering to brief the new council more fully on the tourism tax option as the city begins developing next year’s budget.