Charter group weighs local option taxes
BENNINGTON — Charter Review Committee members voiced support Wednesday for a local option tax but made no decisions on what specific format they might recommend to the Select Board.
Supporters of the idea consider the option a method of reducing the burden on property taxpayers while raising at least a portion of revenues from visitors to the area.
Whether to propose a 1 percent tax on sales and/or meals and rooms is one of the key issues to be considered by the committee, which was appointed to study the current charter for possible revisions. The Select Board will then accept, reject or revise those recommendations for submission to the voters in March.
Reviewing the tax section in the charter, some committee members indicated they favor adding the local option to the sales tax, while others indicated support for including the rooms and meals tax as well.
With a charter change, 1 percent local tax can be added to the state's 6 percent sales tax, and/or the 9 percent rooms and meals tax and 10 percent alcoholic beverages tax.
After the taxes are collected by the state, 70 percent of the local option portion would be returned to the municipality.
The idea of a local option is an attractive one, Robert Ebert said, in that it shifts some of the burden from property taxpayers and from residents when non-residents are paying it.
However, he added, "I think that meals and rooms should be excluded," saying he believes that tax is high without adding another 1 percent.
Daniel Malmborg, said he believes meals and rooms taxes might more often be payed by non-residents, while townspeople are likely to be affected by a hike in the sales tax.
Jonathan Cohen and P. Lynn Green expressed reservations about the effects on restaurants and motels if the meals and rooms tax is increased.
Lynn, owner of the Four Chimneys Inn, said that from discussions with people in the business she believes owners would be less likely to oppose a meals and rooms tax if some of the funding could be earmarked for tourism promotion.
Cohen recommended seeking the support of business owners by designating a portion of the new revenue toward promotion of the area. At any rate, he said, the committee should seek more input from the public on the tax issue.
Ebert contended that voters are more likely to support additional funding for street repairs or similar needs than for ads or videos to lure tourists to Bennington.
Green said she also has heard that owners of lower to medium priced motels fear losing business to other towns if the rooms tax rises from 9 to 10 percent.
Committee members asked Town Manager Stuart Hurd to research information on what formats other Vermont communities that have adopted a local option tax have instituted.
He said the local revenue option was allowed after passage of Act 60 for so-called "gold towns," or those that send more in taxes to the state than they receive for their schools. They can adopt a local tax through a town meeting vote.
For so-called "receiving" towns like Bennington, the option tax now can only be adopted, but only through a change in the governmental charter.
Among communities that have recently adopted local option taxes are Montpelier and Brandon in 2016, Colchester in 2015, and Wilmington in July 2012.
Manchester is among county towns with a local tax on sales, adopting that in 2008, and adopting a local sales tax in 1999. Winhall adopted local option taxes in 2010, Dover in 2007 and Stratton in 2004.
Those with a local rooms and meals tax include Brattleboro, adopted in 2007.
The charter group also said Wednesday that a forum on the charter review process set for tonight at 5:30 p.m. will be rescheduled because of a potential conflict with the Act 46 merger informational meeting, scheduled for 7 p.m. at Mt. Anthony Union High School.
More information on local option taxes is available at http://tax.vermont.gov/business-and-corp/sales-and-use-tax/local-option-tax
Jim Therrien writes for New England Newspapers in Southern Vermont and VTDigger.org. @BB_therrien on Twitter.
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