Epic sales tax revenues will go where skiers go
Among the myriad details to be sorted out following Vail Resorts’ acquisition of Park City Mountain Resort last week is who will receive the sales tax revenues generated by the new owner’s multi-ski area Epic Pass.
The answer? It’s complicated.
According to Vail Resorts Director of Mountain Public Affairs Kristin Kenney Williams, regardless of where the passes are purchased, the sales tax revenues will go to the jurisdiction where the pass is used.
"Determining tax allocations is something we carry out at all of our resorts in Colorado, California, Minnesota, Michigan and Utah. The sales tax is calculated based upon where the pass product is used (and scanned), not where it is bought," she said in an email.
That dovetails with the Utah Tax Commission policy that applies to entertainment tickets, which covers ski passes.
According to tax commission spokesperson Charlie Roberts, "If the Epic pass is sold directly at the office, the full price of the pass is taxed and the revenue is remitted based upon the location of the activity."
As to online purchases, a particular area of concern to local taxing entities like Park City Municipal Corp. and Summit County’s Snyderville Basin Transit District, Roberts explained, "For passes sold online, the sales tax rate and the distribution of the sales tax are based on the location of the activity or event, regardless of where the ticket was purchased."
That should provide some comfort to Park City Municipal and Summit County, who may have worried that Epic Pass sales tax revenues would accrue to Broomfield, Colorado where Vail’s headquarters are located.
But slicing and dicing those sales tax revenues may become even more complicated if Vail succeeds in its plan to connect Canyons, which it manages for the Canada-based company Talisker Land Holdings LLC, and PCMR, which Vail now owns. What happens when a skier, or snowboarder, slides across that invisible taxing-entity border between Park City and Snyderville?
According to Williams, "Vail Resorts pays the sales tax ourselves in each locale, based on the initial scan and the rate in that destination."
The keywords here are "initial scan."
If a skier’s first lift of the day is at PCMR but he or she ends the day at Canyons via an as-yet-to-be-determined connection, Park City Municipal will get the sales tax credit.
Park City Manager Diane Foster says the issue runs even deeper. Utah is one of 23 states that abide by a Streamlined Sales Tax Use Agreement, she explains. That means, if a skier buys an Epic pass at the ticket window on PCMR’s plaza but ends up spending her first ski day at Canyons, the sales tax revenue from that pass will be credited to Snyderville, not Park City Municipal, even if she spends the rest of the winter skiing at PCMR.
"Will that kill us, force us to lay off people? No. Is it significant? Yes," Foster said.
That formula may be up for negotiation however.
Summit County’s Chief Civil Attorney David Thomas suggests that state statutes allow taxing entities to work out special agreements in certain circumstances.
"If a seller spans more than one jurisdiction, the taxing entities can flesh out an agreement with the tax commission to make sure there is an equitable distribution," Thomas said.
"Obviously this is a new series of events," Thomas said, adding the he anticipates the city, county, the tax commission and Vail will be meeting to discuss the issue. "There are certainly concerns, but those are not new to Vail. Vail has resorts all across the country and all have the same concerns about adequate distribution."
According to Foster, among all of the issues the city is juggling related to PCMR’s ownership change, the sales tax distribution issue is "our No. 1 priority."
How the matter is settled will have implications beyond Vail’s Epic pass as other Utah resorts begin selling multi-resort tickets. Ultimately, it could have a profound effect on resorts participating the proposed One Wasatch plan which would connect seven resorts on the Wasatch Front and Back.
Sales tax rates
- Park City – 7.95 percent
- Snyderville Basin Transit District – 6.35 percent
- Broomfield, Colo. – 8.15 percent
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