Governor Ted Schwinden signed House Bill 826 on May 13, 1985 giving resort communities the authority to impose a 3% tax on luxury items sold within the city limits. Representatives from West Yellowstone were instrumental in lobbying the legislature to pass the bill.
The Town of West Yellowstone put the resort tax option on the ballot in November of 1985 and the option was approved for 20 years.
Resort tax collections began in January 1986.
By 1996, resort tax had enabled the Town to bring the mill levy down from 75 mills to 44 mills as annual resort tax collections rose to $1,414,274.
In addition to infrastructure projects and bond payments during the first ten years of the tax, the Town was able to purchase snow removal equipment, police vehicles, and contribute annually to community programs including the Fourth of July Fireworks, Shakespeare in the Park, the Summer Recreation Program, and the Galavan Bus.
By 2002, resort tax collections had risen to $1,774,409.
The Town had lowered the mill levy to 43 mills.
$94,700 worth of street lighting projects were budgeted, including the completion of Gibbon Avenue and the buyout of the Yellowstone Avenue Lighting Assessment District by reimbursing business owners for the initial cost of creating the district.
Resort Tax Renewal
Even though the current tax did not expire until December 2005, the Town Council realized they could not plan for any future projects until the tax was renewed.
The Town Council therefor, passed Resolution No. 412 on July 25, 2002 to place the renewal of the resort tax on the November 2002 ballot.
The electorate of West Yellowstone overwhelmingly voted to renew the tax for another twenty years by a favorable margin of 88%
In 2004, the Town contributed $30,000 of resort tax funds plus the land as a match to a US Forest Service Grant to build a new Trailhead Facility to service the Rendezvous Ski Trails.