So Who Will Get Screwed out of Vail Sales Tax Revenue? Park City or Summit County.

You, me, and half of Park City are buying our Epic Passes right now.  If the rain we’ve seen recently continues into Winter, it’s going to be a hell of a ski year.  It might also be a hell of a year for our local governments to figure out whether they received the proper sales tax dollars from Vail.

When you buy your Epic Pass, Vail has to remit a portion of the sale (the sales tax) to Utah since they have operations here.  The state then keeps 4.7% of that and sends the rest to the locality where the operations are. The city or county gets then gets their portion of the money.  Sales tax makes localities very happy. 😉

Well, not always.  Last year there was an issue where some businesses outside of Park City city limits (i.e. in Kimball Junction) had incorrectly said they were in Park City. Their sales tax dollars went to the Park City instead of Summit County.  As dumb luck would have it, a Park City Municipal employee was eating lunch in Kimball Junction and got charged the Park City rate and said “uh, this doesn’t look right”.  Summit County filed some paperwork and received about a million dollars in tax revenue they were owed.  What we learned out of that process is that the tax collection process is hard… and it’s about to get harder.

This brings us back to the Epic Pass, PCMR, Canyons, Park City, and Summit County.  When you buy your Epic Pass, you never see the taxes. They are baked into the price, but they are there.  4.7% of the purchase price goes to Utah.  The rest goes to the locality, either Park City or Summit County.  The tricky issue is that Vail has operations in both Park City and Summit County. It gets harder yet because the tax rates are different.  Park City has a 7.95% base rate.  Summit County has a 6.05% base rate.  Let’s make it even trickier, since Park City has the right (as a city) to charge resort taxes.  That is an extra 6.35% tax owed to them.  So you buy your Epic Pass, where and how much taxes are going to who? Great question.

If you go to Jan’s and buy skis for $600, you are charged the Park City rate (7.95%), they add $48 to your bill, and that money goes to Park City.  Now you are buying the full Epic Pass online for $750, where the tax is some portion of that $750, with operations in two separate localities, where you never see the tax or tax rate, and Vail is going to remit some money to someone.

From a pure business standpoint Vail would be better off trying to run that all through the Canyons, since they would pay less tax. They are charging a flat $569 for the Epic Local Pass and I’m sure they would rather remit less money out of that to Summit County than remit more money to Park City, since Park City taxes are higher. That being said Vail is very good and this isn’t their first rodeo. Perhaps they have it all figured out.

I hope Summit County and Park City are just as good and ensure that the way Vail has it figured matches their figures.  If not, somebody is going to get screwed.

h/t to JLM for this idea