Local Option Tax Fact Checker

Provided by the City of Ketchum for educational purposes.

The Original Local Option Tax (LOT) has generated a lot of conversation—and a lot of questions. This page is designed to provide clear, factual information about how the Original LOT works, where the revenue comes from, and how it supports the Ketchum community. As additional questions arise, this page will continue to be updated with facts, data, and resources to help residents make informed decisions.

City Council is currently considering draft ballot language for the November election that would reauthorize the existing Original LOT and evaluate potential adjustments to certain tax categories. No changes have been approved.

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What is the Original Local Option Tax?

The Original LOT has been part of Ketchum since 1978. Unlike property taxes, it allows visitors and customers to help fund local services and infrastructure through purchases made in Ketchum.

*less than 30 days

Fact Checker

FACT: Most Original LOT revenue is paid by visitors—not Ketchum residents.

An independent consumer spending analysis covering 2023–2025 found that non-Ketchum residents generate over 82% of Original LOT revenue, helping offset the cost of services used by visitors.

FACT: The Original LOT helps reduce reliance on property taxes.

Because visitors contribute significantly through the Original LOT, the City can invest in roads, transportation, public safety, parks, community events, and other infrastructure without relying solely on property taxes.

FACT: No changes have been approved.

City Council is currently discussing:

• Reauthorization of the existing Original LOT
• Possible adjustments to tax percentages within existing categories
• Whether to consider adding a services category

These are proposals only. Any approved ballot measure would ultimately be decided by Ketchum voters.

FACT: Community feedback has helped shape the discussion.

Through public meetings, presentations, and pop-up events, residents and stakeholders shared feedback that generally included:

• Broad support for continuing the Original LOT
• Concerns about lodging competitiveness
• Interest in modest adjustments to retail, lodging, and building materials categories
• Mixed opinions on liquor-by-the-drink rates
• Varied perspectives on a potential services category

City Council is using this feedback, alongside financial and economic analysis, as it considers next steps.

FACT: The Original LOT is different from other taxes.

The Original LOT is a local sales tax applied only to specific purchases made within Ketchum.

It is not:

• The Additional 1% for Air
• A property tax
• An income tax
• A statewide sales tax

Frequently Asked Questions

• What does the current LOT provide?
  • In the proposed 2027 budget, LOT would fund the following:
    • $1.5M - Public Safety (Police)
    • $1M - Capital Improvement Projects
    • $878k - Mountain Rides
    • $345k - Events (including 65% of Wagon Days)
    • $61k - Partnerships
• How would the City fund these services without the Original LOT?

  • If the Original LOT is not reauthorized, the City would need to consider other funding sources to maintain the services, infrastructure, and community investments it currently supports. Potential alternatives include:

    • Property Tax Increase: Requires voter approval. The cost would be borne primarily by local property owners rather than shared with visitors.

    • General Obligation (GO) Bond: Requires voter approval. Repayment would come from local property taxes, placing the financial responsibility on local taxpayers.

• Is the City proposing a new tax?

  • No. Council is discussing reauthorization of the existing Original Local Option Tax and whether certain tax categories should be adjusted.
• Are groceries taxed?
  • No. Groceries are exempt from the Original LOT.
• Are motor vehicles taxed?
  • No. Motor vehicle purchases are exempt from the Original LOT.
• Who decides what happens next?
  • City Council will consider draft ballot language. If approved for the ballot, Ketchum voters will make the final decision during the election.

Timeline

• June 25: Report feedback; finalize language

• July 7: Coffee Talk

• July 8: Open House & online survey for feedback

• July 23: 1st reading of ballot language

• July 30: or August 6 Special meeting / 2nd reading of ballot language

• August 13: 3rd reading of ballot language

• August 28: Ballot language due to the County

Resources

For those interested in reviewing the information that informed Council's discussion:

• Consumer Spending Analysis (2023–2025)
• City Council Presentation (June 11, 2026)
• Original Local Option Tax Information
• Original Local Option Tax Revenue Reports
• City Council Meeting Materials

Provided by the City of Ketchum for educational purposes.