HELENA — There’s still a lot of legislation alive at the Montana Legislature that would tackle rising property taxes. Much of the debate so far has been on the tax rates themselves, but there are also other ideas for ways to offer residents a property tax break.
One of those ideas is House Bill 489, introduced this week.
“We view our bill as not in competition, but providing some more diversity to the solutions that are being offered to Montanans by way of property tax relief,” said Rep. Tom France, D-Missoula.
(Watch the video for more on the property tax proposals still under consideration.)
HB 489 would allow county voters to adopt a local option tax, with the revenue from it going toward tax credits on primary residences and long-term rentals. Supporters say the bill is targeted to bring in revenue from visitors to the state who aren’t paying other forms of taxes.
“We have approximately 13 million tourists who come through Montana on a yearly basis, and this is an attempt to try and let them help pay for some of our services and the things that we do, just like we do when we travel to other states,” said Rep. Greg Oblander, R-Shepherd.
A county commission would be able to propose a tax of up to 4% on several categories of goods and services: restaurants, alcohol sales at bars, prepared foods that aren’t eligible for SNAP benefits, airport landings and outfitting and guiding services. The tax would go onto the ballot, and voters would have to approve it at a general election.
“It gives local taxpayers their option, and we hope that they'll embrace that option and say, ‘Yes, this is something we want,’” Oblander said.
If county voters did approve the local option tax, 90% of the money would fund tax credits within the county, 9.75% would go to property tax relief in counties without local option tax, and the remaining 0.25% would go to businesses to help with the costs of administering the tax.
On Thursday, France and Oblander touted the bill in a news conference. They were joined by county commissioners Joe Briggs of Cascade County and Gordon Oelkers of Roosevelt County, and all three commissioners from Missoula County appeared remotely.
Briggs said the local option tax would be enough to fund substantial decreases in property taxes, and that he didn’t believe it would discourage tourism.
“I travel a fair amount, and I can tell you that most places you go, it's expected,” he said. “So we're not going to run any tourists off by having a sales tax because they're used to it.”
HB 489 is scheduled for its first hearing in the House Taxation Committee next Thursday.
During a news conference this week, MTN asked Gov. Greg Gianforte about the local option tax proposal. He said he’d consider any legislation that gets to his desk, but that he had reservations about any form of sales tax.
Gianforte’s top property tax priority has been House Bill 231, sponsored by Rep. Llew Jones, R-Conrad. It would establish “homestead” property tax rates – lowering the rates on primary residences, long-term rentals and smaller commercial properties but raising them on other properties. Gianforte has called it the best approach for targeting relief to Montana residents.
“I want to thank all of the legislators who recognize the importance of getting this done for Montanans,” he said. “We must continue to boldly address the problems facing hard-working Montanans.”
Gianforte has repeatedly urged the Legislature to pass HB 231 this month, saying that would give state administrators enough time to implement the new rates for this tax year. The bill passed an initial vote in the House last week, and this week it got a hearing in the House Appropriations Committee – the committee that reviews all legislation dealing with state revenue and spending. However, the committee hasn’t yet voted on whether to return it to the full House for a final vote.
The Appropriations Committee also held hearings this week on House Bill 155, sponsored by Rep. Mark Thane, D-Missoula. That bill would establish a variable tax rate for residential property – increasing for homes with higher values. Supporters say it would reduce the share of state property taxes that fall on homes and redirect them to other classes of property. HB 155 passed the House at the same time as HB 231.
