Legislative Update

Bill Would Create Local Option Tourism Tax in Montana Communities

By Natalie Neumann, UM Legislative News Service, Guest Writer, 3-18-09

Voters may have the chance to decide whether their local governments can impose a local sales tax if a bill moving through the Montana State Senate makes it through the Legislature.

Senate Bill 506, sponsored by Jeff Essmann, R-Billings, The bill proposes a 4 percent tax to tourism goods and services, like lodging facilities, prepared meals, alcoholic beverages, recreational services, auto and recreational vehicle rentals. Local governments would submit the tax to their electorates.

Local governments lined up in support of the bill at the capitol Wednesday and you can listen to Legislative News Reporter Natalie Neumann’s report here or with the player below.

Jeff Essmann of Billings said he hopes the bill will aid Montana’s growing senior population with property taxes because at least 35 percent of the tax revenue must be used to offset property taxes. The other part must be used for infrastructure expenditures. Jack Johnson, a retired school teacher from Billings says the tax is important to the growing senior population.

“So we’re quite sure that reduced property tax relief for seniors would help them be able to maintain, keep on living in their own homes, their own places.”

A representative of the League of Cities and Towns who supports the bill says 48 percent of the revenue will come from non-residents. Various county commissioners, chambers of commerce and city managers, like Livingston city manager Ed Meece support the bill.

“That 48 percent that visits Livingston every year that creates hundreds and hundreds of calls to the police department, to the e-m-s service and the fire department, they now get the opportunity to pay for the service they receive.”

However, Nancy Schlepp with the Montana Farm Bureau Federation says this tax will hurt rural people.

“I think that it’s really important to understand that when we go to do errands into town we drive 60 to 150 miles to get there. And we don’t go for an hour or two and go home for lunch. We usually stay there all day, eat out, spend money in the communities. However, this bill would penalize us for it.”

Other opponents include car rental companies, the Montana Taxpayers Association and the Montana Tavern Association. The Senate Taxation committee will take action on the bill later this month.

Natalie Neumann is reporting from the state capitol for the University of Montana’s Legislative News Service.

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