Coalville City Approves Transient Room Tax

Jul 10, 2018

The Coalville City council voted 4-1 to set up their own Transient Room Tax of one percent. Most favored the levy as a new source of revenue for the city. They also agreed to earmark the taxes to enhance the tourism experience in town—to help the lodging businesses that would bear the burden of the TRT.

City council member Tyler Rowser presented the case for the tax. He said it would impact visitors to town, not residents. The monies can go into the city’s General Fund. Looking at what it could have generated for May of this year, Rowser figured the city would see around $942 a month.

A public hearing only drew two comments—on opposite sides of the question. Lyn Wood said she supported the tax, and said she got a great response after her family turned their old house into a vacation rental.

“We’ve got this commercial district, and we’ve got these old residences within them. How do we not impact businesses? We want business, we don’t want to deter that. What do we do with these homes? Vacation rentals are a really wonderful blend of the two, I think. I mean I think we really made some lemonade with our house in a commercial district.” Wood said of her rental.

“As somebody who fills these reservation requests frequently, I’ve not once, in the three years we’ve done this, had anybody say, ‘well what’s your tax?’.” Wood continued “It’s ‘What’s your nightly rate?’ ‘What’s your pet fee, what’s your cleaning fee?’ but never (about the tax)”

On the other hand, David Bell said that the overall room rate, including tax, is something that matters to many of his customers. Bell, who owns the 60-room Best Western Inn on the West side of I-80 said his business will likely generate the bulk of the tax revenue.

“The first concern I have, when we’re talking about any tax, there should be compelling reasons for implementing a tax or changing a tax.” Bell said “What I’m hearing is that right now, there are not compelling reasons. It’s just looked at as possibly a freebie that can be grabbed hold of and can be thrown into the city coffers, but not a specific reason to do so.”

Bell said that most of his customers aren’t coming there as a destination, but more of a convenience. Unlike his nearest competitors—Evanston to the East and the Park City area to the west—Coalville doesn’t offer as much in terms of restaurants, shops, or entertainment. To compete, Bell said he has to offer discount rates.

“While you may look at this as a tax that would be paid by somebody outside the community that’s traveling through. In reality, because of where we have to position ourselves in order to get that business to begin with. And the questions being asked by the customer coming through the door.” Bell said “We have to have a price that works in that mix. If this tax is imposed, we still have to make that price work in the mix. Which means it comes out of our pocket, out of our profits, and we end up paying that tax directly to the city of Coalville.”

Mayor Trevor Johnson didn’t cast a vote. He said the tax is attractive, but noted the council just recently declined to support the county’s new transit taxes. The reason for that, he said, is they don’t yet know the impacts of the transit sales taxes passed by voters in November of 2016. What tax, he asked, will be the final straw.

The council did decide to earmark the revenues to beautify the entry and exit ramps to town from Interstate 80. After that, the revenues could go to special events, or other tourism-related activity.

The dissenting vote against the tax was council member Rodney Robbins.

“Whether earmarked or not, is it still worth making only half the businesses in the town pay for it, through the tax?” Robbins said.

Council member Arlin Judd replied, “It’s a question of whether you want to collect it on transient people or you want to tax your local people. We’re talking here of taxing those who travel through and stay one night, or two nights or three.”

“But it could have a detrimental effect on a few businesses” Robbins replied.

Judd answered, “It could have a detrimental effect on the very businesses that we like to support here in town and need to support. But at the same time, it can benefit.”