asked to extend
Local Option Tax
Express Staff Writer
Valley voters on their election ballot Nov. 5 will be asked whether they
want the city to adopt Ordinance No. 337, a measure that would extend
the city’s ability to levy a 3-percent Local Option Tax through 2010.
essence, voter support of the ordinance would allow the city to collect
a 3-percent tax on the sales price of hotel and motel room charges,
short-term vacation rental charges, by-the-drink liquor sales and most
retail sales transactions except for those involving building materials
and ski lift tickets.
Valley City Council members in August unanimously endorsed the
ordinance, but the measure must receive approval from a majority of
local voters to be enacted.
ordinance is endorsed by voters, it will replace the city’s existing
LOT ordinance. The existing ordinance was approved by voters in 1998 for
a five-year term that is set to expire at the end of 2003.
officials decided to bring the eight-year extension before voters a full
year before the existing ordinance expires because state law requires a
12-month intermission between votes if the electorate turns down the
of conducting the early vote have maintained that LOT revenues are too
critical to the city budget to risk losing them for any period of time.
Thus, the city determined it was prudent to ask voters to approve the
extension a year in advance to help ensure LOTs could be collected
beyond the expiration of the current term.
effect, the new eight-year LOT term would supersede the final year of
the five-year term allowed under the existing ordinance.
were rejected, the city would still collect the tax through 2003 under
the existing ordinance and would likely propose another extension of the
LOT in November 2003.
Idaho State Sales Tax Act, certain resort cities such as Sun Valley that
have a tourist-based economy and a population of less than 10,000 can
exercise LOTs to supplement the city budget.
No. 337 specifically notes that "as a resort city, the City of Sun
Valley derives a major portion of its economic well being from
businesses catering to recreational needs and meeting the needs of
people traveling to the City of Sun Valley as a destination city for an
extended period of time."
Valley in recent years has derived approximately 40 percent of its
General Fund budget revenue from the collection of LOTs.
2000-2001 fiscal year, the city brought in just over $1.3 million from
the taxes. LOT revenues were down approximately 10 percent in the
2001-2002 fiscal year, and are expected to be down the same amount in
the 2002-2003 fiscal year.
entire budget for the 2002-2003 fiscal year is approximately $5.2
million, a significant part of which will go to providing services for
the many tourists who visit the city.
A vote in
favor of Ordinance No. 337 will in effect extend the city’s existing
LOT taxes through 2010, with revenues slated to go toward a specific set
of city expenses.
against the ordinance would be a vote against the extension of the LOTs,
likely prompting the city to bring the matter back before voters in the
November 2003 election. Any eventual interruption or stoppage in the
collection of LOTS would result in a significant loss of city revenue.