Despite arguments that Utah's poor are more deserving of a tax break than the owners of the state's ski resorts are, members of a Senate committee voted Friday to recommend approval of a bill allowing sales tax collected on lift tickets to be invested in snowmaking machines and other equipment.
Sen. Lyle Hillyard, R-Logan, said he sponsored the legislation because it would bring more tourists - and more of their money - to Utah by making the state's ski resorts competitive with their Colorado counterparts.The bill, SB34, would allow ski resorts to keep the approximately $2.1 million in taxes collected annually on the sale of lift tickets if the money is spent on one or more of the following: Snowmaking or slope-grooming equipment, or ski lifts capable of transporting more passengers. The credit would expire on June 30, 1993.
The snowmaking equipment is especially needed by Utah resorts, Hillyard testified before the Senate Revenue and Taxation Committee, to assure opening by the Thanksgiving holiday weekend, the traditional start of the ski season.
Many resorts in Colorado already have snowmaking equipment and have in recent years accommodated skiers who would have traveled to Utah had there been enough snow. Hillyard noted that in recent years, the lack of snow has kept Utah resorts from opening until as late as mid-January.
Phil Jones, president of the Park City Ski Area, told the committee that the area's resorts have already invested $5 million in snowmaking equipment and spent $750,000 last year to make snow in time for a Thanksgiving weekend opening.
Jones noted that Colorado resorts do not pay sales tax on lift tickets or on the purchase of equipment or on the electricity used to operate it, enabling resorts in that state to make more improvements than those in Utah.
However, several witnesses and senators questioned whether the state should be helping the ski industry. Sen. Omar Bunnell, D-Price, noted the personal wealth of many of the ski resort owners in the state, including actor Robert Redford,and said they could afford to pay for improvements themselves.
Bunnell referred to an article touting Deer Valley as a "playground for the rich and famous" that charges rates of up to $1,500 a day for lodging and then described how testimony from handicapped children and others seeking more money for social service programs "just tears at your heart."
Sen. Francis Farley, D-Salt Lake, also said the needs of the state's poor and otherwise disadvantaged are overwhelming. She said the "window" that Hillyard's bill would provide ski resort owners would be welcomed by the working poor and those living on fixed incomes.> Farley, along with Joe Duke-Rosati of the Salt Lake Community Action Program, suggested that if lawmakers want to give a tax break this year, they should consider removing the sales tax from food. Duke-Rosati said tax relief should be given to needy Utahns, and wryly noted that the Utah ski industry "does not meetthat definition."
The bill has been amended so that sales taxes collected for local entities, such as the 1-cent resort tax collected in Park City or the .25-cent transit tax collected by the Utah Transit Authority, would not be affected.
Hillyard said he was also planning to amend the bill so that the ski resorts would have to spend $3 for every $1 of sales tax dollars used for allowable equipment purchases.
The bill, which passed the committee by a vote of 4-3, now moves to the full Senate for further consideration.