Public info meetings Sept. 19 about Resort Area Sales Tax proposal
By Correne Martin
The city of Prairie du Chien is proposing implementing a Premier Resort Area Sales Tax of 0.5 percent on tourism-related businesses. The public will have the opportunity to ask questions and express concerns about the proposed additional tax at two meetings on Thursday, Sept. 19. Co-hosted by the city and the Chamber of Commerce, the meetings will be held at noon and 6:30 p.m. at City Hall and are scheduled to last about 90 minutes.
“A bill has been drafted for the state legislature to consider, since we need approval through state law before any local action can be taken,” City Administrator Aaron Kramer said. “It is our hope that this meeting will allow for residents and merchants to ask questions, clear up any confusion, and help us decide on what future steps we should be taking in regard to the proposed tax.”
While the city looks at this new tax as potential revenue to benefit public infrastructure, many local business owners are largely opposed to the idea of another tax.
The current sales tax is 5.5 percent locally—including a 5.0 percent state sales tax and a 0.5 percent tax imposed by Crawford County. If the Resort Area Sales Tax is implemented in the city, the local tax would be raised to 6.0 percent at tourism-related businesses, as determined by the state of Wisconsin. Other businesses would remain at 5.5 percent.
The tax would be imposed upon the taxable sales price of places like restaurants, motels, taverns, clothing stores, shoe stores, convenience stores, and entertainment and recreational facilities. A complete list of the retailers who would be impacted can be obtained by contacting City Hall at 326-6406 or can be found on the city’s website: prairieduchien.info.
Those who are in favor of the Resort Area Sales Tax proposal have said potential revenue generated by another 0.5 percent is estimated to be between $212,000 and $393,000 annually for the city. This is according to a Prairie du Chien Premier Resort Tax Feasibility Analysis done in June 2012 by the consulting firm of Vierbicher Associates.
Under state law, the city may only use the proceeds of this tax to pay for infrastructure expenses, such as purchasing, constructing, or improving parking lots; transportation facilities, including roads and bridges; sewer and water facilities; recreational facilities; exposition center facilities; firefighting equipment; and police vehicles. The specific expenses would be determined by the common council.
The 2012 Vierbicher analysis determined that within the Resort Area Sales Tax categories, 76.55 percent of retail spending in qualified categories would come from consumers residing outside of the city.
Of course, if the Resort Area Sales Tax is applied in Prairie du Chien, the business community is going to have its concerns. In addition to tourists, regular shoppers from small communities, like Eastman and Bloomington for example, would also pay the new tax at the businesses subject to the law.
Several downtown merchants who spoke with the Courier Press last week said they feel that the majority of their customers are not necessarily “tourists,” but rather regular shoppers who would still be subject to this new tax. These customers may not be Prairie du Chien residents, however merchants still considered them to be local citizens.
Another one of their biggest concerns is the fact that Bridgeport businesses would be exempt from the additional 0.5 percent in tax, as would those businesses in neighboring Marquette and McGregor—making this seem like an “unfair tax” that wouldn’t be imposed “across the board.”
Ultimately, even though the proposed tax amounts to only 0.5 percent, it is still another tax, and local business owners are naturally resistant to the idea.
According to Chamber President J.J. Jackson, of Anchor Bank, who commented on the proposal back in April, the Chamber encourages all of its members to become more informed about this and find out exactly what impact it could have if the state passes it.
The perfect opportunity to get involved in the process is to attend the two public meetings on Thursday, Sept. 19.
Where to go from here
According to Kramer, if this tax is implemented, it isn’t likely to happen before the first quarter of 2014.
Following the public education process, which includes this Thursday’s meetings, the next step would be for the state to actually pass legislation approving the city’s Resort Area Sales Tax. The Courier Press has received no indication of how the legislature would vote on the proposal.
According to Kramer, if this tax is put into effect, the common council would have to reauthorize it in five years.