April is tax month, and during April a new lodging tax is being proposed for the Village of Questa. Questa has explored an occupancy tax on previous occasions, and as tourism and travel see a resurgence following two years of pandemic lock-down, the time is ideal for revisiting the implementation of a lodging tax to improve awareness about all Questa has to offer.
An occupancy tax would be assessed on all licensed lodging rentals within town limits: hotels, motels, RV parks, vacation rentals (AirBnB, VRBO, etc.), cabins, and furnished rooms rented to guests for less than 30 consecutive days.
The occupancy tax is a pass-through-tax: it is paid by the lodging guests – charged on their invoice as a separate line item like the gross receipts tax – it’s collected by the lodging property, and remitted to the Village by the 25th of each month with a simple one-page form.
The Village would collect, administer, and manage the tax receipts, keeping the funds in a separately designated account. They would conduct random audits, and file quarterly reports to the State.
The funds collected can be used for the following purposes:
- A set percentage must be spent on advertising, publicizing, and promoting Questa tourist-related attractions, facilities, and events. A five-member Advisory Board would be appointed by the Mayor to make recommendations on how those funds would be used.
- The remainder of the collections can be used for administering the program; construction, operation, and maintenance of tourist-related facilities and attractions, i.e., Visitor’s Center, rodeo grounds; transportation systems; police, fire protection, and sanitation services for tourist-related facilities, attractions, and events.
Currently, Questa is the only municipality along the Enchanted Circle that does not impose a lodging tax. Per state statute, the tax cannot exceed 5% of the gross taxable rent.
How much tax does this represent to the Village of Questa? From May 2020 to April 2021 GRT collections for “Accommodations & Food Services” (reported together) totaled $1,006,442. Assuming half of these revenues are from lodging related rentals, or $503,221, a 5% lodging tax would generate $25,161. (If only 40% of the revenue were lodging related, the tax collected would be $20,129.)
To establish collections, the Village Council will draft an ordinance and pass a resolution, however, they will not do this without public education sessions and the opportunity for constituents to share their feedback.
On Wednesday, April 13 at 6pm a lodging tax presentation will be made at the Questa Business Entrepreneurial Networking meeting, to be held in person at Rael’s Market in Questa, and virtually via Zoom.
The Village Council will also hold a public comment hearing, contact the Village office for dates and times, (575) 586-0694.
For more information about the lodging tax proposal, contact Lynn Skall, Director, Questa Economic Development Fund at firstname.lastname@example.org or (575) 586-2149.