lodging tax

The Lodging Tax Fund summary as it appears in San Miguel County’s 2021 adopted budget. (Courtesy photo)

Telluride Town Council set the wheels in motion at its Tuesday meeting to pose to town voters the potential of opting out of the San Miguel County 2 percent lodging tax and instead levy its own tax. Should voters approve the measure, which still needs to be articulated before the September filing deadline for questions on the November ballot, the town may find itself more able to determine how the tax collected could be spent. The tax is currently designated solely for promotional marketing and advertising.

Currently, the county’s Lodging Tax Panel (a three-person panel appointed from the local tourism industry) passes the majority of the money collected in unincorporated San Miguel County and Telluride, directly to the Telluride Tourism Board with the balance directed to the Norwood Chamber of Commerce. Approximately 95 percent of the funds collected come from the Town of Telluride. Mayor DeLanie Young stressed that the discussion was about a possible change in how the tax would be collected, and was not a move to eliminate marketing altogether or even how the money could be conceivably spent.

“This is the discussion of how the current lodging tax is being collected and distributed, and how the Town of Telluride, would like to be more in line with how our neighboring community (specifically) Mountain Village and how other neighboring like communities are also doing this,” Young said. “This is simply about how that lodging tax is currently being collected and distributed and how the town may want to see it happen in the future, not who is funded, not what it's going for exactly in this very moment, but the mechanism. We may get into the what and where it goes later, but this right now, this is simply about how it’s currently happening and how we would like to see it potentially happen in the future.”

Council, guided by town attorney Kevin Geiger, explored the town’s greater freedom, as a home rule municipality, in distributing its own tax. As outlined in his memo to council, Geiger wrote, “the Town does not have to limit consideration of a tax question on nightly accommodations to an ‘accommodations tax’ or a ‘lodging tax’ and may propose to structure any new tax as an excise tax on nightly accommodations. For instance, the citizen initiated and voter approved 2019 Affordable Housing Short-Term Rental Tax was structured as an excise tax with a stated purpose of ‘funding affordable housing and affordable housing programs.’ As a Colorado home rule municipality, the Town would achieve the greatest flexibility as to the use or purpose to be advanced by structuring any new tax as an excise tax, assuming voter approval … ”

In other words, there can be uses for the money other than tourism marketing.

Some on the well-attended Zoom call, leery of the possibility of defunding or even terminating services with the tourism board, defended its role in a healthy economy. Local realtor George Harvey quoted Mark Twain in his comments, arguing that marketing shouldn’t end up under governmental purview.

“‘It ain't what you don't know that gets you into trouble. It’s what you know for sure that just ain't so.’ And I think what ain't so is that we don't need tourism to maintain our economy. It's 80 percent of our economy,” Harvey said. “I have seen seven recessions, and it is 100 percent certain that we will again see stores boarded up and people losing their jobs. The experience that we've had in the last couple years, largely brought on by people escaping from COVID is not going to continue on and our economy is not going to continue to perform the way it has performed in the past. We are certainly headed for another recession, we are certainly headed for jobs loss and the Telluride tourism bureau is in the best position to dial up and dial down tourism as needed. If a portion of this tax is dedicated to marketing, do it in an effective manner.”

Council member Geneva Shaunette stressed that no one on council supported ceasing marketing efforts for the town.

“I don't think myself or anyone is suggesting that the Town of Telluride be the organization conducting the marketing,” she said. “I think we would contract with experts in the marketing and tourism field just like every single other organization and municipality have that relationship. So I just think that rather than having all of that money go in a lump sum to an organization that (it be one) we get to review the services and contract out those services.”

Council has two regular meetings one its schedule before the September deadline to file ballot measures with the county clerk. In those meeting, it will hammer out how the question will read. Geiger gave them a number of suggestions for council’s consideration, including both repealing the county lodging tax and approving a new town tax in the same ballot, whether the tax should be designated a lodging, accommodations or excise tax, the taxes trigger (it is currently charged on room rentals of 30 days or less), what the rate of taxation should be, and other considerations. Council agreed that for the time being, the tax should remain at 2 percent.

And, in Geiger’s memo, he asked council to consider the purpose of the tax.

“Direction should be provided on the … intended use of the tax proceeds,” the memo read. “For instance, although not required, many municipal lodging taxes include a limited stated purpose of ‘marketing’ or ‘promotion of tourism.’ An excise tax can include broader elements of what the tax revenue should be used to fund or support.”

Town Council’s next meeting is Aug. 3. For more information, to review meeting packets and more, visit telluride-co.gov.