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Utah County debates how to spend tourist taxes

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Some county officials have attempted to justify the use of travel-related taxes on projects that don't directly promote tourism, as the state intends.

Utah County Commissioner Jerry Grover told the Legislature's Audit Subcommittee Tuesday that local residents pay about 80 percent of the county's restaurant tax, while tourists pay only 20 percent.

"Utah County is not like Park City" where visitors pay a greater share of the tax, he said.

Grover said he doesn't see anything wrong with the county spending the tax revenue on recreational or cultural projects that benefit residents, rather than promoting tourism.

The commissioner's comments came in response to a Legislative Auditor General report that says counties spend too much of their tourism tax revenue on public improvements such as urban trails or swimming pools instead of on travel ads or brochures to attract tourists.

Counties spend 52 percent of the their restaurant and car rental taxes on capital projects and only 13 percent on promoting tourism, audit supervisor Darin Underwood told the subcommittee.

"When (tourism tax) revenues are concentrated in areas other than tourism promotion, counties can miss out on increased tax revenues," the audit says.

According to the audit, tourism promotion can improve on both the county and state levels. The audit recommended that lawmakers clear up ambiguities in Utah's tourism tax laws, particularly to clarify the term "tourism promotion."

Because sales-tax revenue goes primarily to the state and cities, Weber County Commissioner Camille Cain said, counties should be able to use tourism-generated taxes to improve residents' quality of life. Visitors also benefit from facilities the county builds, she said.

Melva Sine, president of the Utah Restaurant Association, said she supports a strong statewide campaign to attract tourists. The organization, which opposes the 1 percent restaurant tax, says 50 percent of the revenue should be used for advertising and promotion. The reports suggests the travel council needs more funding to compete with surrounding states. "One of the problems we have in our state is that we don't export taxes," said Sen. Lyle Hillyard, R-Logan.

Hillyard said he understands Colorado's Vail resort has more skier days than all of Utah's resorts combined. The state needs to "pump up" its efforts to bring skiers, he said. According to the audit, ski trips to Utah were down.

Dean Reeder, director of the state Division of Travel Development, said the state needs to find ways to produce more tax revenue from nonresidents. "It is well established that intelligent tourism marketing outside the state brings in far more tax revenues than it costs," he said.

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