Suit over Gardiner resort tax continues

Liz Kearney
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A lawsuit challenging Gardiner’s 3 percent resort tax filed by two Gardiner business owners continues to wend its way through court. 

In December 2015, two business owners filed suit against Park County, alleging that the resort tax had been improperly and thus illegally adopted. The business owners, the case’s plaintiffs, withheld the 3-percent tax owed while the case was pending. 

Myron and Bev Kovash, as BMK Enterprises, own a large gift shop in Gardiner, Yellowstone Gifts and Sweets. James Kemp owns several businesses, including the Best Western by Mammoth Hot Springs, which is located in Gardiner.  

The Sixth Judicial District Court in Park County ruled in favor of the county in May 2016, declaring a default judgment against the plaintiffs and requiring that the tax be paid, according to court documents. In the meantime, motions from both the plaintiffs and Park County continued to be filed during the following year. 

In March of this year, the plaintiffs’ motion for reconsideration of the default judgment was denied, including their request that the late fee and interest charges be waived, court documents state. 

The plaintiffs have paid tax, but not late fees, interest or attorneys’ fees, according to the most recent document, a proposed judgment, prepared by Deputy County Attorney Shannan Piccolo, which is a recommendation to the court on final settlement. The proposal, in addition to the late fees and interest, suggests that the plaintiffs pay attorneys fees totaling $1,955.79 plus 10-percent interest. 

The sales tax owed among the plaintiffs’ eight businesses tallies up to about $119,000 and the fees and interest total about $19,000, according to court documents. 

The resort tax law allows business owners to keep 5 percent of their collections for administrative costs. 

Gardiner voters approved the resort tax, which is collected only between June 1 and Sept. 30. The first year the tax was collected was 2015, with the funds held by and distributed by Park County. The county commissioners appointed an advisory board in 2015 to make recommendations on how the funds should be allocated. 

In November 2015, Gardiner-area voters approved the formation of the Gardiner Resort Area District and a five-member board, which would oversee the collection and distribution of resort tax funds. The tax district is not a party in the lawsuit, so the plaintiffs’ 2016 taxes are not at issue in this suit. 

Tax funds collected are restricted by county ordinance to be spent on infrastructure and other improvements within the taxing district, with a portion of the funds earmarked for the Gardiner Chamber of Commerce building. 

When the court issues its final decision, plaintiffs have the right to appeal the decision to the Montana Supreme Court.


Liz Kearney may be reached at