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Philipsburg Town Council Minutes

Resort Tax Working Meeting

February 9th, 2024, at 9:00 am

Philipsburg Townhall

Council in attendance: Carl Sundstrom, Jason White, Gary Fujinami, Scott Lyons, Lorraine Dell-Bishop, and John Laigaie. Council absent: Mayor Daniel Reddish. Others in attendance: Clerk Rachel Parret, Special Projects Maureen Connor, Cathy Smith, Anne Fillmore, Amelia Wood, and Elena Gagliano (online).

Call to Order: Councilman Lyons called the meeting to order at 9:00 am.

Councilman Lyons opened the meeting to Special Projects Maureen Connor.

Maureen Connor opened the meeting with a statement from the Town lawyer Mr. Overstreet.  Mr. Overstreet stated that he was impressed with the Council wanting to start working on the Ordinance before the vote so that the Town’s people would have an opportunity to understand what they were voting for or against.

Maureen also stated that the Town Council is allowed to answer factual questions, and reminded the Council that they are not allowed to do so under political practices. Citizens are allowed to apply for political practice to campaign for or against the Resort Tax.

Councilman Lyons stated that the Council could buy an ad in the newspaper to inform the public on the Resort Tax but could not tell them to go out and vote.

Councilman Fujinami asked if the citizens formed a political action if they must be Town residents or a resident within the County. Maureen Connor stated that the citizens would have to file with the Commission to campaign.


  1. Resort Tax – Qualified communities or areas to put in place a local tax on certain goods and services that are generally used by tourists.

  2. Why now – Infrastructure (water, sewer, and stormwater). Lagoons are not doing what they need to, and the Town is building a new Lagoon system.  The DEQ has issued an order to the Town to filter the water. Camp Creek runs through the storm drains under the Town.

Councilman Sundstrom suggests that the costs of working on the water, sewer, and stormwater be implemented into the FAQ’s.  Councilman Fujinami suggested that the filtration, transmission line, and distribution system costs also be included in the FAQ’s.

  1. Funding – Comes from the water and sewer rate payers which is about $400,000.00 annually each. Property taxes estimate about $300,000.00 with additional revenues from the gas tax.

  2. Resort Tax – Estimated to bring in about $200,000.00, which could be used to match funds on grants for infrastructure.

Councilman Lyons stated that currently the Town doesn’t have the funds to match multimillion grants. Councilman Sundstrom asked if the voters would understand the difference between a match and pledge.  Councilman Lyons stated that the Resort Tax would be used as a pledge to obtain a loan.  Anne Fillmore stated that collateral would possibly be a better word to use than pledge. Maureen Connor stated that MCEP grant is applied for every two years and that the Resort Tax would allow the Town to pledge that the funds will be available to match. 

  1. More Information – Red Lodge has a successful program, and their Resort Tax is posted on their website.

Councilman Sundstrom stated that we should add Red Lodge’s website to the FAQ’s.

Questions answered from the Town’s attorney.

  1. Can the Town Council Decline to tax some types of businesses otherwise subject to tax? Yes, per MCA 7-6-1503(c)

  2. Are gym memberships subject to the Resort Tax? No, per MCA 7-6-1503(2)(a)

  3. Are Federal or State non-profit entities excluded from the Resort Tax? No

Councilman Lyons stated that ready to eat meals made from the Senior Center would have to be put into the Ordinance, if the Council doesn’t want to tax them.

  1. Does the Resort Tax apply to short-term as well as long-term rentals? Only short-term rentals per MCA 7-6-1503(2)(a)(1).

Councilman Lyons stated that the bed tax is 8% and the Resort Tax would add another 4% totaling 12% on short-term rentals. Anne Fillmore asked if the Theater’s rentals could be exempt as the Theater is a non-profit.  Councilman Lyons stated that for now the Council could look at the exemption of tickets, but the swag and rentals are up for debate.  Anne Fillmore asked if the Brewery were to rent out their space if they would be taxed as they do not have a bed tax.  Councilman Lyons stated that is a question for the Town’s attorney.

  1. Does the Resort Tax apply regardless of the duration of the existence of the business? Yes, per MCA 7-6-1502.

  2. Does the Resort Tax apply to online sales? Probably, but it’s complicated.

  3. Can the Town Recoup its auditing cost? Yes, per MCA 7-6-1505(1)(c).

Councilman Lyons stated that 5% will be used for Town administration.  Maureen Connor stated that the Town has authority to look at the business’s books if the business is paying the tax.  The review of the books will be done by an agreed-upon specialist.

  1. Can the Town “pause” the Resort Tax due to an emergency? Yes, see Carter v. Montana Department of Transportation, 274 Montana 39, 905-page 2d 1102 (1995).

Maureen Connor stated there isn’t a law preventing the pause of the Tax during a pandemic, however it may not be cancelled.

  1. Does the Ordinance imposing a Resort Tax describe the use of funds in terms of percentage of the amount collected? Yes, statues do not address this.

     10.) Can the percentage of be charged? Yes, with an amending the ordinance.

Elena Gagliano asked if the Town was self-governing.  Councilman Lyons stated that the lawyer will be asked that question. Elena Gagliano also asked if a business could recoup the 5% for collection the tax.  Councilman Lyons stated that is exactly what the law says. 

Ballot Language

The Council read over the drafted ballot language.  Councilman Sundstrom asked if we need to include the ballot language of destination ski. Councilman Lyons stated that if the Council wants to eliminate the destination ski from the ballot, the Council can strike it.  Councilwoman Dell-Bishop suggested that the Council hold a meeting for the public at the Museum.  Councilman Lyons stated that the Council will hold two public reading of the Ordinance after the Resort Tax is voted on. Councilman Sundstrom stated that the MCA states that there should be two briefing before the election. Councilman Lyons stated that the briefing is a reference to the Ordinance before it is passed.

Public Comment

Elena Gagliano stated that an Ordinance is separate from the Ballot.  Elena Gagliano also asked if the vote for the ballot language will be on the agenda.  Councilman Lyons stated that the ballot language will be on the agenda February 20th, 2024.

Councilman Lyons stated that the Council will be drafting an Ordinance for the public to view before the vote.


Councilman Sundstrom made a motion to adjourn, Councilwoman Dell-Bishop seconded the motion, and the motion passed unanimously.

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