Vail suspends sales tax collections due to steep drop in tourism business
Town is deferring payment of millions in sales taxes
The Vail Town Council on Tuesday agreed to suspend sales tax collections for what looks like the next few months. Businesses still have to file the necessary paperwork, but don’t need to pay. The suspension is effective immediately.
Council members agreed to the suspension — which is millions in tax collections — as part of a lengthy discussion about the town’s budget in the coming months. The town’s revenue is expected to decline significantly due to the loss of tax collections.
Councilmember Jenn Bruno, the co-owner of the Luca Bruno clothing shops, suggested the suspension. She said the temporary relief will give businesses a “chance to survive” the loss of revenue from some of Vail’s prime revenue months.
Bruno noted that one of the reasons the town has substantial reserves is because of the business community.
“Their hard work generated what the town has,” Bruno said. Immediate help is needed, she said, because “the business community is probably going to struggle more than they ever have before.”
During the suspension of collections, businesses will have to file regular paperwork. Bruno said that will allow town officials to know what to expect when payments resume.
Council members didn’t set a date for resumption of payments, but Bruno suggested it could be as late as July.
Vail Finance Director Kathleen Halloran said her current projections — which were several days old as of March 17 — showed a drop of at least 50% in sales tax collections for March and April.
Bruno said the drop will almost certainly be more severe than that, especially in light of the closure of Vail Mountain and a state-ordered shutdown of restaurants and bars.
The suspension of sales tax collections is just one part of what’s going to be some extensive budgetary juggling in Vail.
The town has ended paid parking and closed its buildings to the public, including Town Hall and the community development building just to the west, the library, the public works building and the town’s welcome centers in the Vail Village and Lionshead parking structures. The town’s police front desk is open limited hours, and the fire stations are fully staffed, but closed to the public. The town’s municipal court is closed until further notice. Virtually everything can be handled via phone or online.
Vail Town Manager Scott Robson said the town will support its employees, too, adjusting sick time rules and working to ensure seasonal employees return next winter.
While the town has millions in reserve, “We’re going to be highly conservative on moving forward with projects,” Robson said, adding that staff will be expanded only in “key areas to address the current crisis.”
Robson said the town is looking to state and federal officials for small business support.
The council is also likely to meet more frequently, at least for a while. A special meeting will probably be called next week.
While the town is looking at ways to pull back, officials are also looking to the days when businesses reopen and guests start returning to town.
Robson noted that the town won’t be able to host any special events for the next eight weeks or so. But he added, the way to bounce back is by helping events return. Robson said the preference is to postpone, not cancel events set for this year.
“We’re making sure the town doesn’t stay quiet,” Robson said. “There are financial decisions related to that, too.”
Vail Daily Business Editor Scott Miller can be reached at firstname.lastname@example.org or 970-748-2930.