Wednesday, March 20, 2013

Ketchum says ‘better pay up’ on LOT

Mayor breaks tie to add ‘teeth’ to tax enforcement

Express Staff Writer

Ketchum Mayor Randy Hall has nudged a split City Council toward paying the Idaho Tax Commission $192,800 per year to administer and enforce the city’s local option tax, or LOT. Hall said increased revenue from enforcing the LOT would cover that cost, and then some.

Hall cast his tie-breaking vote at a council meeting Monday, saying that even though contracting the commission to enforce the tax will be expensive, it’s the most efficient option for collecting money currently being “left on the table.” Cherise McLain, an attorney for the city, said the city could collect up to $500,000 more per year in local option tax revenue by hiring the commission to enforce the tax.

“The state has better tools than we do to collect this tax,” Hall said.

The city charges a sales tax of 1 percent on retail sales and 2 percent on building materials, liquor and lodging.

Hall said an audit on the tax, conducted in 2011 by Kalispell, Mont.,-based accounting firm Denning, Downey & Associates, found that almost 59 percent of “high-risk” businesses were not properly collecting or paying the tax. A report on the audit’s findings defines high-risk businesses as those with a large amount of cash or Internet sales, those in the construction industry or those in the vacation rental industry.

The audit also states that nearly 63 percent of contractors then working in the city were not registered with the city to collect and pay the tax. Hall has said at several previous council meetings that people renting homes or condos to visitors are also failing to collect and pay the tax.

“People are either not paying us or short-paying us based on what they’re collecting,” he said at the meeting Monday.

Councilman Baird Gourlay, co-owner of PK’s Ski and Sports in Ketchum, said it comes down to an issue of fairness. He said that as a business owner in the city, it makes him mad that people are cheating on the tax. He and Councilman Michael David voted to hire the commission to give enforcement of the tax more “teeth.”

Council members Nina Jonas and Jim Slanetz voted against hiring the commission.

“I’m concerned we’re not going to collect [enough to cover the cost],” Jonas said. “I don’t share confidence in the numbers.”

Slanetz said committing to pay that much money every year is “kind of frightening,” even if it yields increased revenue.

City Administrator Gary Marks said a contract with the commission would last only three years and would serve as a test. He said the city could opt out of the contract before it expires. He also said hiring the commission would be the most efficient, “toothiest” option and would yield at least a 10 percent increase in LOT revenue, and possibly a lot more.

The city’s fiscal 2013 budget predicts LOT revenue to be about $2,086,000.

The state would also benefit from more stringent enforcement of Ketchum’s local option tax, as it charges a 6 percent sales tax on all transactions that take place in Idaho.

Brennan Rego:


About Comments

Comments with content that seeks to incite or inflame may be removed.

Comments that are in ALL CAPS may be removed.

Comments that are off-topic or that include profanity or personal attacks, libelous or other inappropriate material may be removed from the site. Entries that are unsigned or contain signatures by someone other than the actual author may be removed. We will take steps to block users who violate any of our posting standards, terms of use or any other policies governing this site. Use of this system denotes full acceptance of these conditions. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.

The comments below are from the readers of and in no way represent the views of Express Publishing, Inc.

You may flag individual comments. You may also report an inappropriate or offensive comment by clicking here.

Flagging Comments: Flagging a comment tells a site administrator that a comment is inappropriate. You can find the flag option by pointing the mouse over the comment and clicking the 'Flag' link.

Flagging a comment is only counted once per person, and you won't need to do it multiple times.

Proper Flagging Guidelines: Every site has a different commenting policy - be sure to review the policy for this site before flagging comments. In general these types of comments should be flagged:

  • Spam
  • Ones violating this site's commenting policy
  • Clearly unrelated
  • Personal attacks on others
Comments should not be flagged for:
  • Disagreeing with the content
  • Being in a dispute with the commenter

Popular Comment Threads

 Local Weather 
Search archives:

Copyright © 2020 Express Publishing Inc.   Terms of Use   Privacy Policy
All Rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Express Publishing Inc. is prohibited. 

The Idaho Mountain Express is distributed free to residents and guests throughout the Sun Valley, Idaho resort area community. Subscribers to the Idaho Mountain Express will read these stories and others in this week's issue.