Palisade questions bed and breakfasts’ lower tax revenue
Revenue from the 2 percent lodging tax the town of Palisade collects from its bed and breakfasts has been essentially flat for the third year in a row, and officials are not sure why.
They are hoping to open the lines of communication with the business owners who have paid the town’s lodging tax since 2009, and they are mulling the idea of sending out a letter to them about the situation.
“I think the (town’s Board of Trustees) would like to feel a little comfort level as far as, is everybody paying their fair share?” said Palisade Treasurer Joe Vlach.
“It’s basically reported to us on the honor system.”
Vlach said the town took in about $29,000 in lodging tax revenue in the first year of the tax, then saw that level drop off at $25,000 to $26,000 in both 2010 and 2011. He said the town is on pace to collect about that much this year.
Businesses in Palisade that charge customers for lodging fill out a report and send it to the town every month. The money goes into the town’s tourism fund.
Vlach said the town could audit the program, but Town Administrator Rich Sales told town trustees they could first send the businesses a letter “to let them know that we are noticing those revenues are down — and see if maybe that stimulates a discussion.”
Sales called it “a nice friendly way to at least broach the subject.”
If Palisade’s 2012 collections of the lodging tax end up flat again this year, that might buck a trend with other regional lodging taxes.
The 3 percent lodging tax that funds the Grand Junction Visitor and Convention Bureau and its promotional efforts is up 7.4 percent year to date through September of this year. Bureau officials think collections will be significantly higher over the past two down years.
Fruita’s 3 percent lodging tax is following a similar trend. After two years in which collections of the city lodging tax were well off the number from 2009, revenue looks on pace to meet the city’s 2012 budget amount, which is 4 percent higher than last year.