Epic Pass sales tax split remains the same despite resort merger
October 9, 2015
One of the thorniest issues when Vail Resorts purchased Park City Mountain Resort last year was how sales tax revenue for its multi-resort Epic Pass would be distributed between Park City and Summit County.
A solution was struck dictating that revenue would be spread based on where skiers and snowboarders were starting their days. If the first run of the day was at Park City Mountain Resort, that day’s percentage of the sales tax for the season would go to Park City. If it was at Canyons Resort, Summit County would reap the revenue.
In other words, the tax from a skier who spent seven days in a season at PCMR and three days at Canyons Resort would be split 70-30 between Park City and Summit County.
But now, with PCMR and Canyons Resort combined into one, it will be conceivable for a skier to take his or her first run in one taxing jurisdiction, hop on the gondola connecting the two base areas, then spend most of the day skiing in another entity.
Nate Rockwood, capital budget, debt and grants manager at City Hall, said that the sales tax formula will remain the same, however, despite the merger of the resorts. In fact, a possible connection was a large reason the city and county agreed to adopt the method in the first place.
At the time, the sides felt the formula was the most equitable solution in part because the sales tax revenue goes to infrastructure around the base areas, such as roads. And a skier whose first run is at the Park City Mountain base area would be using the city’s infrastructure rather than the county’s, even if he or she used the gondola to ski most of the day near the Canyons Village base area.
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"We haven’t talked about changing it up," Rockwood said. "And when we originally talked with Vail (Resorts), it was with both the city and the county at the same time. The arrangement was what we felt was the most equitable, being that the services you use at the base — the streets and roads and that sort of stuff — if you split that by use, that would be most fair. We were all comfortable with that, and I don’t see any reason why we would change any of that right now."
Diane Foster, Park City Manager, said the formula makes much more sense than an alternative where the tax revenue for the entire season would simply go wherever the pass was used on the first day.
"It’s a whole lot more fair than that," she said.
She added that there will be no jostling between the city and county to reap the tax revenue by incentivizing skiers to start their days at a certain base area.
"The city and county have a great relationship," she said. "We’re going to let it play out however it plays out. The reality of a methodology that says, ‘Where did you start your day?’ it’s probably going to come out in a wash anyway. In other words, it will be a fair and equitable distribution of sales tax revenue."
Rockwood said that he sees no reason the agreement will change in future seasons, barring new state or federal legislation regulating sales tax. He did mention one concern the public may have with the formula, however: How do we know Vail Resorts is tracking and reporting skier usage data correctly?
But he said there’s no reason to worry. The company is meticulous about tracking where its customers are skiing, Rockwood said.
"What we got from Vail (Resorts) itself is that they don’t combine all of their resorts — they have each resort being managed itself and have individual reporting," he said. "They’re tracking those numbers because they want to know how each one of their individual resorts is doing."
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