Gardiner resort tax challenge continues

By: 
Liz Kearney

With the allocating recently of Gardiner’s resort tax funds — its third annual distribution since the tax was passed by voter approval in April, 2014 — a lawsuit filed by three business owners against Park County late last year challenging the validity of the tax is still working its way through the court system. 

In November 2015, businessmen Myron Kovash, Rodney McAllister and James Kemp filed suit in Sixth Judicial District Court in Livingston, arguing the 3-percent resort tax — a sales tax on retail items, prepared food, motel rooms and other goods and services —  was implemented improperly and thus illegally, rendering the tax invalid. They — the plaintiffs —  called the sales tax a “property tax.” Park County is the defendant in the suit. 

Kovash and Kemp have withheld making resort tax payments for 2015 and 2016 as the case proceeds, court documents states. Kovash owns a Gardiner gift shop, Yellowstone Gifts and Sweets, and Kemp is the owner of a motel, Best Western by Mammoth Hot Springs, also located in Gardiner. McAllister is the owner of the Gardiner Comfort Inn. 

Park County Civil District Attorney Shannan Piccolo filed the county’s responses to the suit, arguing that deadlines for challenging the resort tax had passed before the lawsuit was filed. 

With motions and responses filed throughout 2016, Judge Brenda Gilbert dismissed the businessmen’s complaint in October with a summary judgment.

The case is not yet closed. Piccolo filed a motion requesting financial statements from the two business owners who withheld their payments, arguing that  the records were needed to determine how much resort tax was owed. The county is also seeking late fees and interest. 

Language in the resort tax ordinance states that a business owner’s financial records are confidential, and the business owners, through their attorney, Jami Rebsom, of Livingston, filed a motion arguing they should not have to provide financial statements.  

In a separate motion, the county argued that the plaintiffs should also pay attorney fees. Piccolo provided an accounting of her time, which totaled about $800. The plaintiffs argued they shouldn’t have to pay attorney fees for a county employee, who would be paid her salary “regardless of this matter,” court documents state. 

The resort tax, which is collected annually from June 1 to Sept. 30, brought in about $495,000 this year. The tax was approved by Gardiner voters in 2014. Gardiner-area voters approved the creation of a tax district in 2015, and elected a five-member board in November, 2015, to oversee how the funds are distributed. 

The resort tax ordinance spells out how the tax funds are to be distributed, which includes  allowing business owners to keep 5 percent of the taxes they collect to offset the administrative costs of collecting the tax.