Wednesday, September 20, 2000
Steamboat Springs This week's Colorado Supreme Court ruling upholding the town of Eagle's motel/hotel "occupation tax" doesn't have any implications for the city of Steamboat Springs' 1 point of accommodation sales tax. The two taxes are distinctly different.
"An accommodation tax is specifically provided by state law," Steamboat City Manager Paul Hughes said.
In addition to its regular 4.5 percent sales tax, Steamboat adds another percentage point as a line item on the bills of motels, hotels and condominium properties.
Eagle's tax is not a sales tax but a flat fee that does not appear on bills.
The court ruled Sept. 18 in favor of the town of Eagle in a lawsuit filed by the owners of a pair of area motels, the Best Western Eagle Lodge and Holiday Inn Express. They objected to the occupation tax, which requires them to pay $2 for every night a room is occupied.
Eagle Treasurer Marilene Miller said the $2 isn't collected from the motel guests in the same way that Steamboat's accommodation tax appears on the hotel bill. The Eagle tax is a flat tax it's $2 per room night, no matter what the room rate is. The motel owners are responsible for turning in the money, but they don't collect it from their guests, at least not as a tax.
"If the room isn't rented, no tax is due," Miller said.
The occupation tax was passed by Eagle voters in 1996. But the owners of the two motels argued the tax was unconstitutional because it varies with the amount of business a hotel does, similarly to an income tax. A district court judge ruled the tax was constitutional, but attorneys for the plaintiffs took the case to the Colorado Court of Appeals in November 1997 and won a unanimous verdict.
The Supreme Court disagreed with the lower court. Chief Justice Mary Mullarkey ruled the Court of Appeals interpretation of case law was too narrow.
"Variation in the amount of tax paid during each taxing period caused by calculations based on factors other than income is not fatal to a valid occupation tax," Mullarkey wrote.
According to an article in the Vail Trail written by Tamara Miller, the town of Eagle has hired auditors to determine how much tax is owed by several hotels who have not consistently paid it while the court case was pending.
The Eagle occupation tax and the Steamboat accommodation tax have one similarity: Both are dedicated to single purposes. In Eagle, the approximately $160,000 generated annually by the occupation tax is used for the preservation of open space, Miller said. Recently, the town contributed $500,000 to the Brush Creek land purchase, a partnership with the state of Colorado.
Steamboat's accommodation tax is dedicated to capital improvement projects that benefit tourism. Currently, the entire tax is used to retire indebtedness on Haymaker Golf Course.
Accommodation tax in Steamboat totaled $560,134 in 1999. Thus far in 2000, $456,396 has been collected.
To reach Tom Ross call 871-4210 or e-mail email@example.com