Bighorn River Resort Tax

Every year, our property taxes increase, as does the cost of living. Community members in the areas around Fort Smith and the Bighorn River have been looking into the pros and cons of imposing a sales tax on tourism activities. When the Montana legislature created the Resort Tax in 1985, the rationale was to provide us with a funding source to offset the effects of tourism on our small communities. For example, tourists use our roads, our utilities, our infrastructure, police force, fire and rescue, and these things are paid for with our property taxes. There are thousands of tourists that visit the Bighorn Reiver and Reservoir. These tourists do not pay property taxes but still get to use our resources.

 

In order to collect a Resort Tax, a Resort Area District (RAD) must be created and approved by voters within the District (there are currently 13 RADs in the state). A vote to approve the district will be held this November. At the same time, we will vote to approve the amount of the tax to be collected. A tax of 4% is the maximum allowed by the state broken down into two categories: 3% for general projects and services, and 1% for an infrastructure project. This tax would be collected against tourism goods and services within the RAD. The residents of the RAD will most likely not pay this tax because many of us do not purchase any of the tourism goods and services sold here.

 

The resort tax is a sales tax that would be collected by restaurants, lodges, short term rental properties, fly-fishing shops, transportation services, and other establishments on goods and services purchased by tourists. The money collected will be submitted to a locally appointed Board of Directors, who all must live within the RAD. The Board will be responsible for administration of the District to include, but not be limited to: tax administration, compliance of entities required to collect the tax, and disbursement of funds. These funds can ONLY be used within the RAD. Potential uses for the resort tax will benefit residents within the RAD and include but are not limited to:

• Fire protection

• Law enforcement

• Property Tax Relief

• Road repair and maintenance

• Emergency medical service

• Snow removal

• Street lighting

• Bighorn river access site expansion

• Recycling, waste and garbage service

• Water quality monitoring

• Reduction of the balance of the Fort Smith sewer project

• Chamber of Commerce

• Community center implementation; Meeting facility, gymnasium, classes, exercises, etc.

 

The Resort Tax is an excellent way for us to collect revenue to be used within our Resort District so that we don’t have to pay out of pocket for the impacts of tourism to our area.