SNOWMASS VILLAGE — Snowmass Village Town Council passed up the opportunity to lower the town’s sales tax, giving Snowmass Village the dubious distinction of having the highest sales and lodging tax rate of any resort in Colorado when two new taxes kick in Jan. 1.

Snowmass’ combined sales and lodging tax will total 12.8 percent — up from 12.3 percent now — and its sales tax alone will stand at 10.4 percent, up from 9.9 percent now. Although opinion is split, some local officials have long warned that business would be lost above the threshold of a 10 percent sales tax.

“I as a retailer am very concerned about this. It’s not going to be pretty if we let it get to 10.4 percent,” said Councilman Reed Lewis, who also owns a liquor and fine food store on the Snowmass Mall. “I’m not sure having the highest sales tax in the country is something we should be striving for.”

Lewis gave examples of customers being shocked about the sales tax, particularly foreign visitors who are used to having the tax included, and leaving the store in favor of buying goods elsewhere.

Snowmass’ 10.4 percent sales tax will put it on par with that of Telluride, the only two Colorado mountain towns that are above 10 percent. Aspen’s total sales tax is 8.6 percent, which itself is higher than resorts like Steamboat (8.4 percent), Breckenridge (8.275 percent), Vail (8.4 percent) and Winter Park (8.9 percent).

Adding in lodging and occupancy taxes, Glenwood and Breckenridge climb up above 10 percent, and Aspen will be at 10.1 percent once the RFTA and water taxes go into effect.

All taxes considered, Snowmass will be four-tenths of a percent higher than the municipality with the next highest sales and lodging tax total, Telluride, which is at 12.4 percent.

It will still be lower, however, than the tax rate in some major cities. Chicago’s grand total tax rate for someone staying in a city lodging establishment is a whopping 15.4 percent. Denver’s resort sales tax is 14.85 percent.

It was pointed out by more than one person Monday night that lodging guests are used to paying more than 10 percent in taxes during their stay, so that is not the issue.

“You don’t see guests going to Aspen lodging because our tax is too high,” said Councilman Arnie Mordkin. “But there seems to be a psychological detriment that occurs when you go above 10 percent for sales tax.”

Mordkin mused that more people might be willing to go to Aspen to avoid Snowmass’ high sales tax, and there was some talk about trying to find out how much business Snowmass would lose versus simply lowering its taxes through some kind of study.

One option was to lower the marketing and special events tax, which accounts for 2.5 percent of the town’s 3.5 percent sales tax, by a half-percent. But that tax, which funds advertising, public relations and other promotional efforts, was vigorously defended.

“This is the wrong time to be reducing our marketing and special events tax,” said Councilman John Wilkinson, referring to an oft-repeated argument that advertising and promotion should not be reduced in tough economic times.

Others said that many Snowmass visitors are well aware of the cost of staying and spending in the town before they get here, and that Snowmass has survived with a high tax level in the past. It was also pointed out that revenues from the marketing tax will already be lower due to an anticipated drop in business this winter, and so to cut it even further would be detrimental to efforts when the economy begins to recover.

In the end, the council decided against taking any action on the proposal, and even took some swings at other local government bodies. Mordkin pointed out that the county levies as high of a sales tax as Snowmass Village does. In fact, Pitkin County’s 3.5 percent sales tax (soon to be 3.6 percent including the water measure) is significantly higher than other counties’ (Telluride and Glenwood pay 1 percent to the county; Breckenridge pays 2.875 percent).

He also warned that free bus service between Aspen and Snowmass Village may be on the chopping block, as he’s heard rumblings from other elected officials responsible for that decision.

lutz@aspendailynews.com