Town considers eliminating partial business sales tax refund

Will there be pushback over $61,000?

By Mark Reaman

The Crested Butte Town Council will consider a recommendation by town finance director Rob Zillioux for the town to stop refunding a portion of town sales tax known as the vendor fee to businesses that collect the money.

Currently, the town allows local businesses to keep 1.5 percent of the sum of the sales tax it collects on behalf of the town.

“In light of integrated software systems, and the trend away from offering vendor fees, staff recommends eliminating the vendor fee for Crested Butte,” Zillioux wrote the council in a memo. He said that as other municipalities have begun eliminating similar vendor fees, “There has been little to no backlash from the business community. With today’s point of sale systems, and tax collections systems, the burden on the business is very little. Staff does not believe Crested Butte businesses, generally speaking, would take exception to this change.”

But one councilman argued otherwise. Chris Haver suggested the fee refund acted as a good incentive to get businesses to file their sales tax in a timely manner.

Zillioux said there is less work for a business to collect the tax compared to when the refund was implemented to help defray such costs. He said the town gives back about $61,500 annually for the fee.

“I’m looking for ways to balance the budget,” Zillioux told the council, “and not dip into reserves. This is one way to close the gap and use the money for other things.”

Haver said the state and county both have a similar vendor fee refund to businesses that file on time, but at a 3.3 percent level. If the sales tax is not submitted to the state or the county within a month of being due, a hefty fine is imposed.

“Also consider that the majority of business transactions these days are done by credit card, and credit cards come with their own fees,” Haver said. “Those fees are on top of the taxes. There are a lot of ways to spend that $60,000 but there are also a lot of ways for small businesses to reinvest in their business and end up collecting more tax for the town.”

Councilman Will Dujardin told Haver he could “hear your concerns, but I would like to hear the public weigh in on it as well.”

The council agreed to set a public hearing on the issue for the April 1 meeting.