Major Tourism Destination Wrestles With Timeshare Tax
Study indicates property taxes and short term lodging fees could be a solution.
Over the last year, the COVID Pandemic has brought widespread hardship and not just with timeshare owners, but also in some timeshare resort areas like in Steamboat Springs, Colorado. City leaders there are trying to figure out how they will operate in an unpredictable environment and produce a budget that can provide beyond the city’s basic services for residents and visitors alike.
Steamboat Springs relies almost completely on a 4% sales tax, which up until recently has supported the city’s budget due to the area being a top skiing and tourism destination. But here is the problem.
“Sales tax is not stable enough, it’s too volatile”, says city manager Gary Suiter.
A timeshare tax would make the system more equitable according to a recent city report. It states that many timeshare users do not pay taxes on their timeshare lodging. The city council also believes that the monies collected may best be placed with the Steamboat Springs Chamber for its destination marketing efforts and that the cost of that marketing should not be placed on the shoulders of residents as it is now. Some members of the council however are concerned about a timeshare tax. Timeshare companies have powerful lobbyists and a developer association that is constantly in tax fights around the country and beyond.
Lisel Petis is a council member and told the Steamboat City Pilot, “If we go forward with a timeshare tax, we will likely be seen around the world for it, so we want to be prepared.”
While more information is being gathered, nothing has been finalized yet. These types of municipal transient tax proposals have been met in the past with fierce opposition by the timeshare industry. Steamboat Springs is not the only major tourism area facing budget problems. Earlier this month, an appeals court held that the United States Virgin Islands could collect a flat fee of $25 per day as part of timeshare tax model introduced by the government to offset budget losses. Those fees amount to nearly 20 million annually for the tax coffers and have likely attracted the attention of other tax collectors.
At Finn Law Group, we study the timeshare marketplace and educate our clients on just about everything timeshare. Check out our blog and contact us for more information if you feel you may need legal representation with a timeshare matter.