Whitefish City Council discussed a variety of options for disbursing revenue from the city’s resort tax at a work session earlier this month.

Currently, Whitefish provides 25% of resort tax collections as property tax relief for residential and commercial properties. The tax is collected on certain goods and services purchased in the city.  

All property owners receive the same percentage as tax relief, but previous discussions by council have centered on whether there is a more equitable way to provide relief to full-time residents. 

Council agreed that a minimum of 5% of the collections will continue to be distributed to all homeowners for tax relief, per state law. The additional 20%, however, was the topic of discussion at the work session.  

“There's a theoretical question,” Whitefish City Manager Dana Smith said. “Do you think that because somebody pays more tax, they should get more tax relief? Or do you think primary residents should have more tax relief?” 

Smith said the current system gives people who pay more tax, more tax relief. 

“I don't think we should give second homeowners more money back just because they're a second homeowner,” Councilor Steve Qunell said. “I don't think they should get anything back for their second home, other than the 5% because that's what they're owed according to the law.” 

One option was to refund the 20% to all property taxpayers with a primary residence within city limits, with the amount of the refund equal for all properties regardless of value. That relief would total, depending on the amount of resort tax collected, around $200 per property. 

If the council wanted to see primary residents get more of the relief, determinations would have to be made, including what is a primary residence and what is a long-term rental. 

“The question will be, and they're still developing the process, how are they going to identify, on tax bills, who’s primary versus secondary homes?” Smith said. “It's probably going to be the Department of Revenue because they're going to be determining taxable values.” 

Councilor Giuseppe Caltabiano suggested rebating money evenly to all registered voters. He also supported giving some relief money to renters.  

Councilors Frank Sweeney and Qunell opposed that idea because they see the total amount as property tax relief. Caltabiano countered that 5% is property tax relief, and the remainder should be a rebate to residents. 

Mayor John Muhlfeld sided with the idea of distributing a portion of the revenue to all residents. 

“Regardless of whether they're paying property taxes, being a renter, they're still paying the resort tax,” Mayor John Muhlfeld said. “They're contributing to all of the benefits we receive as a community.   

"Philosophically, probably morally, from my perspective, they deserve some portion of rebate,” he added. 

The fourth option was to distribute 20% on a flat rate basis to all property taxpayers, both residential and commercial. 

The last option is to use 20% for other projects like community housing, streets, parks and paths. This option provides value to all residents. 

Nathan Dugan said rather than distributing money to homeowners, the money might be best spent collectively on resort tax projects. 

All councilors agreed that whatever option rises to the top will be decided by voters. 

“It doesn't matter what we decide in this room,” Councilor Andy Feury said. “It's going to be decided by the people to go to the polls and vote.”