Coalville enacts municipal transient-room tax
July 10, 2018
Coalville leaders decided on Monday to enact a 1 percent municipal transient-room tax as a way to raise additional revenue for the city without placing the burden on its residents.
City Council members approved, 4-1, the 1 percent rate after a public hearing. Councilors Adrianne Anson, Cody Blonquist, Arlin Judd and Tyler Rowser voted in favor of the increase, while Rodney Robbins cast the dissenting vote. Fewer than 10 people were at the meeting.
"We're always looking for options and sources of revenue out there," said Councilor Arlin Judd. "This is one of those that is available and a majority of it won't impact any of us. It comes from people who visit us."
Rowser first presented the option to the five-member panel at the June 25 meeting. Transient-room taxes are collected from overnight stays at locations such as hotels and nightly rentals.
The city's tax will be on top of Summit County's 3 percent transient-room tax rate. However, the revenues from the 1 percent tax will remain with the city.
City Councilors agreed 100 percent of the money generated would be earmarked for a beautification project at the entrance to the community. Once the project is complete, the revenues will support other special event and tourism-related projects.
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"I don't think we are out of line in collecting that 1 percent," Judd said. "It may not be a great lot and it may impact some businesses. But, we could certainly use it."
Lyn Wood, owner of a vacation rental home along Coalville's Main Street, supported the tax. She called it a "great solution to fix a problem."
"As someone who fields these requests frequently, I haven't once had anyone ask what the tax rate is," she said. "I don't see 1 percent as any kind of deterrent. I would really like to see the city benefit from this."
However, another business owner strongly opposed the increase. David Bell, owner of the Best Western Holiday Hills, asked elected officials to vote against the tax or examine its potential impact further. He said the tax primarily targets his business.
"We've got one hotel in the community," he said. "The customers that are coming into the door are very concerned about price and the total to them is not just the base rate. They want to know what the room is with taxes."
Bell said his hotel has to compete with similar businesses in Evanston, Wyoming, and Park City. He added, "The advantage here is we are a convenient stop." Bell said the tax will take money out of his pocket.
"We don't have the eating establishments and recreational offers that they can find in neighboring cities," he said. "Is this really the best thing to do at this point? If you are considering it or you aren't sure, table it for the time being. We've already had some good tax increases that we are looking at down the road. It's not a good fit at this point."
Robbins said he was not in favor of implementing a tax that affects only a few businesses in town.
"Earmarked or not, is it still worth it to make only half of the businesses pay for it?" Robbins said.
Coalville Mayor Trever Johnson was also hesitant to support the increase, but mainly because the county recently approved two new sales taxes to fund transportation-related projects. Voters also approved a sales tax hike in 2016.
"We haven't fully felt the impacts of the first tax, and we don't know what these other two will look like and how that will affect us," he said. "There are a lot of question marks there. Does this add one more question mark? I'm not saying this is not a good idea. I'm just asking you to consider that. I don't have the answer to any of those."
Coalville will now join Park City as the only municipalities in the county to have a transient-room tax. Park City enacted its rate in late 2017 and began collecting revenues in February.
Matt Leavitt, Summit County's finance officer, said the rate is similar to what other counties in the state have enacted.
"A lot of them have 4 or 4.25 percent rates," he said. "Coalville's rate will not be a whole lot different than what other areas already have in place."