Rutland Herald
By Patrick McArdle
STAFF WRITER | May 29,2015
STAFF WRITER | May 29,2015
Town Manager John O’Keefe said the town recently received the results of the local option tax collection for the first quarter of 2015.
For the rooms, meals and alcohol tax, the town collected about $76,500, an increase of about $6,400 or 9.1 percent over the same quarter in 2014, when about $70,100 was collected.
For the sales tax, the town collected about $175,100, an increase of about $14,300, or 8.9 percent over the same quarter in 2014, when about $161,000 was collected.
The local option tax is a 1 percent tax that communities known as “sending towns” or “gold towns” can impose on retail sales, lodging, or meals and alcohol sold in restaurants.
Aside from the option tax, Vermont municipalities don’t have the authority to impose any tax except property taxes.
Manchester, the first town to impose the tax, uses all three of the taxes. They are collected by the state and, after the state subtracts its fee, returned to the town in payments made every three months.
Other towns have seen gains this quarter, including Stratton and Middlebury, which both collect all three taxes.
Stratton collected about $216,100 in the first quarter of 2015, almost $1,500 or 0.7 percent more than the $214,600 collected in 2014.
Middlebury collected about $203,920 for the first quarter of 2015, almost $15,000 or 7.9 percent more than the $189,050 collected in 2014.
Killington saw a slight decrease in sales tax but its highest ever returns for the rooms, meals and alcohol taxes, according to Town Manager Seth Webb.
Killington collected about $265,400 in retail sales tax for the first quarter of 2015, down about $9,000 or 3.4 percent from the $274,560 collected in 2014.
But Killington collected about $218,220 in rooms, meals and alcohol taxes for the first quarter of 2015, about $2,200 or about 1 percent more than the $216,000 collected in 2014.
Webb pointed out that overall, local option taxes were down less than $7,000 from 2014 which had been Killington’s best year ever.
Webb said he also believed the improvement to the rooms, meals and alcohol taxes was a good sign for Killington’s tourist economy.
Other towns showed mixed results with some, like Brattleboro and Wilmington seeing some improvement while others, like Winhall and Stowe, seeing a small decline, according to figures from the state Department of Taxes.
O’Keefe said the news was good for Manchester. The first quarter of 2015 was the highest quarter since 2006 and the highest since Vermont became part of the Streamlined Sales Tax Agreement.
The SSTA, under which clothing is not taxed, hurt Manchester’s returns on the local option taxes because the town is home to a large number of retail outlet stores that sell clothing.
“There’s definitely a buzz,” O’Keefe said. “We’re even seeing more businesses coming to town. I think investors and entrepreneurs feel that there’s still room left in the Manchester economy.”
Another hopeful sign in Manchester is that several hotels are in various stages of planning or construction which is also likely to boost the town’s local option tax numbers.
While different towns use their local option tax money in different ways, Manchester has always used it to keep the municipal tax rate as low as possible.
O’Keefe said after the recent economic downturn, during which the town put money directly into keeping the tax rate low, the Select Board is planning to decrease its use of local option tax money to build up the reserves.
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