Sun Valley council reviews proposed Local Option Tax expansion, residents question enforcement

Council Member Michelle Griffith presented the City’s proposal to expand the Local Option Tax under Ordinance No. 484 and said the current LOT "brings in approximately $1.2 million a year, or 20% of the City’s overall budget." She outlined which city services the tax funds and explained the proposal to add building materials to the taxable base.

During a public question-and-answer period, Sun Valley resident Dennis Tripp said applying a tax on building materials in addition to building permit fees "amounted to a double tax." Griffith told the Council that staff estimated a 1% building materials tax would generate "$60,000 per year." Jim Bronson urged the City not to imply ways for taxpayers to avoid the tax, saying the City "should not imply or sanction ways for tax payers to avoid the building materials tax." Resident Kevin Laird cited a 1991 Attorney General opinion and said past materials taxes "didn’t bring in significant revenue" and were difficult to enforce.

Mayor Peter Hendricks and Council Member Michelle Griffith disputed Laird’s interpretation of the Attorney General opinion. Hendricks said the opinion "states the City has the authority to charge a tax on building materials," while Laird argued there must be a nexus to tourism; Griffith said the statute does not require such a relation. Council Member Jane Conard noted that many homes in the city are second homes for tourists as context for the discussion.

The presentation and public comment were informational; no council motion on Ordinance No. 484 took place at this special meeting. The City did not provide a final revenue forecast beyond the staff estimate of $60,000 per year for a 1% building materials tax.