Montana's had a 4% sales tax on hotel rooms and rental cars since the late '80s but the way people rent rooms and cars has changed a lot since then. A bill moving through the 2021 Montana Legislature aims to bring that tax into the online era.
Senate Bill 52, sponsored by Sen. Jason Ellsworth, R-Hamilton, would expand the tax to also include bookings from third parties such as Expedia or Priceline.
The bill’s fiscal note shows the change would add just over $3 million to a state special revenue fund over four years. According to the Montana Department of Commerce, the majority of that money goes to the Office of Tourism and Business Development.
Supporters like Billings hotel owner Steve Wahrlich said the bill would put online sellers on the same level as their brick-and-mortar competitors. He joined the House Taxation Committee hearing via Zoom on Tuesday.
“It’s time that we get this right,” Wahrlich said.
He was joined by three other proponents representing physical hotel and rental car companies.
The only registered opponent was Steve Shur, president of the Virginia-based lobby group Travel Technology Association. Shur raised concerns about hitting the already struggling tourism industry with what he called a new tax.
“We need to be working together to grow the travel and tourism industry, not tax it," he said.
Ellsworth said his bill is not a new tax, but rather a modernization of the tax code. SB 52 passed the Senate on a 45-5 vote in February.
James Bradley is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation.