Hayden The town of Hayden tested its legs as a home rule municipality Thursday when council members approved the first reading of two possible new taxes.
The Town Council, formerly the Town Board of Trustees, approved the first reading of taxes on accommodations and car rentals. If council members OK the ordinances on second reading Aug. 6, Hayden residents will see the taxes on the November ballot. Under the Colorado Taxpayer's Bill of Rights, new taxes require voter approval.
One proposal would add a 3.5 percent sales tax to accommodations, and the other would add a 3.5 percent sales tax to car rentals. That would increase the sales tax on both from 7.9 percent to 11.4 percent.
"We would collect this ourselves," Town Manager Russ Martin said. "We would collect it directly. They would write a check to the town of Hayden."
Voters elected Tuesday to switch from statutory to home rule by approving a town charter.
Council members approved the first readings unanimously. Council member Bill Hayden suggested that the town tweak the proposals to increase the penalties for businesses that don't pay up. As written, the proposals require vendors to pay the taxes and 1 percent interest per month.
That's not enough to cover costs, Bill Hayden said. An increase to 5 percent interest makes sense "just to make it pay for itself," council member Tim Redmond said. "I agree with that."
At the ordinances' second reading, the council will look at those revisions. If members approve the proposals, they'll go before voters Nov. 3.
The ordinances suggest but don't require ways to spend the money, such as putting accommodations money toward marketing for the town. Flexibility on that front allows the council to decide how to spend the tax income if voters approve it, Martin said.
The taxes would go into effect Jan. 1.
Hayden is home to few taxable accommodations. A few units at the Redstone Motel qualify, Martin said. Those taxes usually apply to units that rent to people for fewer than 30 days at a time. An additional 3.5 percent accommodations tax would be expected to bring in only $1,200 in 2010.
New accommodations built in town would increase that income.
A car rental tax would be expected to bring in $143,500 for the town in 2010. Those would come mostly from services at Yampa Valley Regional Airport in Hayden.
Martin offered numbers from other communities for comparison. Car rental taxes in Grand Junction are 12.1 percent, in Colorado Springs they're 12.3 percent, and in Aspen they're 9.7 percent.
Martin also noted that similar taxes in Chicago and Houston are 20 percent and 17 percent, respectively. He mentioned those because people from those communities fly to YVRA.
"I feel like we're not trying to gouge anybody here," Martin said. "I feel like it's commensurate with the type of activity we have up there."
The ordinances will be posted at http://townofhayden.org, at Hayden Town Hall and possibly at Hayden Public Library.