Mount Snow in Dover has been purchased by Colorado-based Vail Resorts. Mount Snow photo
Vail Resorts bought the Mount Snow ski area June 22 as part of a $264 million deal with Peak Resorts that gives the company a controlling interest in 17 ski areas. The acquisition expands Vail’s portfolio to a total of 34 resorts in the United States, including two other ski areas in Vermont — Stowe and Okemo.
When the purchase is completed this fall, the Colorado-based parent company expects to earn additional income of about $60 million from Mount Snow in fiscal year 2021.
Vail included that information in a press release, but what’s still unclear is how much the publicly traded resort company will pay the state for a property transfer tax levied when the controlling interest on real property is transferred.
Lawmakers removed a loophole in the property transfer tax law this year to include transactions like the Vail/Mount Snow one, a change that went into effect on July 1. Rep. Janet Ancel, chair of the House Ways and Means Committee, said lawmakers decided to close the loophole after seeing other states like New York do so.
“It wasn’t prompted by any particular event,” Ancel said. “As we work with these tax types, we learn, particularly from other states, and sometimes from our staff, about things we might do to have as broad a base as we can.”
The property transfer tax is a levy of .0145 of property value. The state Tax Department won’t release information about Vail’s payment of the tax because that would necessitate the release of other confidential details about the company, said Tax Department spokesman Doug Farnham.
“To determine what the fair market value of the properties is as part of the larger transaction, we’d need certain documents from the businesses that are going to be sensitive and not something that the businesses are willing to have public,” said Farnham.
Usually, the Tax Department sends property transfer information to the town, in this case Dover, where it is paired with the recording of the deed and is public information. But that hasn’t happened in this case, either.
“We didn’t see any reason for these types of transfer returns to be going to the town because in a controlling interest transaction, nothing is changing on the deed level,” Farnham said.
The Broomfield, Colorado-based Vail Resorts announced July 22 that it plans to buy Mount Snow as part of its purchase of the publicly traded Peak Resorts, which is based in Missouri. Along with Mount Snow in Vermont, Peak owns the ski areas Hunter Mountain in New York; Attitash, Wildcat and Crotched in New Hampshire; Liberty, Roundtop, Whitetail, Jack Frost and Big Boulder in Pennsylvania; Alpine Valley, Boston Mills, Brandywine and Mad River Mountain in Ohio; Hidden Valley and Snow Creek in Missouri, and Paoli Peaks in Indiana.
Vail said it expects to spend $15 million over the next two years on capital improvements at the Peak resorts.
Vail also owns the Stowe and Okemo resorts in Vermont. It was liable for $813,000 of property transfer tax on the 2018 Okemo transaction, which was worth $56 million, said Farnham, and for $344,000 on the 2017 Stowe transaction, which was worth $23 million. He said he couldn’t confirm whether those amounts were paid; only that they were calculated on the public returns.
Revenues from the property transfer tax go to the Vermont Housing and Conservation Trust Fund, the Clean Water Fund, Regional Planning Commissions, and the General Fund.
House Ways and Means chair Janet Ancel. File photo by Anne Galloway/VTDigger
Last year, Vermont lawmakers decided to remove a loophole in the tax to include transfers of controlling interest in property like the Mount Snow/Peak Resorts sale. Before the change, a property owner could put a building into an LLC and then sell the LLC, sidestepping the tax, said Farnham. The bill, Act 71, includes property transfers where majority ownership changes hands, and applies to any underlying real estate.
Property transfer tax revenues for fiscal 2019 were $41.1 million; the most recent forecast for fiscal 2020 is that the tax will generate $45.58 million, Farnham said. The Tax Department does release information about property transfer tax revenues, but will wait until it has at least 10 transactions to aggregate in order to protect taxpayer privacy, Farnham said.
Ancel added that keeping some tax information – like that of the Vail/Peak transaction — confidential “is the longstanding rule and law.
“It’s not constitutionally based, but it’s been in our statute forever, and we’re used to it,” said Ancel. “They’re not confirming it to me, either, and they’re not going to confirm it to anyone else.”
CORRECTION: Property tax transfer receipts go to the Vermont Housing and Conservation Trust Fund, Clean Water Fund, Regional Planning Commissions, and the General Fund. The Vermont Housing Finance Agency does not receive property transfer tax revenues.
Read the story on VTDigger here: Mount Snow purchase happens as property transfer tax rules change.