Montana Public Radio

Legislature Won't Talk Sales Tax Next Year

Aug 25, 2020

A group of Montana lawmakers studying tax reform decided on Tuesday to not recommend a statewide sales tax bill to the next Legislature. While the Tax Study Committee agreed it’s important to discuss the idea, they were not ready to advance the policy to the full Legislature next year.

Modeled after South Dakota’s sales tax policy, the bill proposed a 4% tax on most sales and services. But the committee has too many unanswered questions about what a final draft of the bill would look like, according to Missoula Democrat Sen. Dick Barrett.

“I simply don’t see how we can get from where we are now to a bill,” he said. “This is the last meeting of this subcommittee.”

Sen. Brian Hoven, a Republican from Great Falls, had asked for the bill to be drafted. By Tuesday, he agreed with Barrett.

“It’s not in a form that I would want to submit at this point,” Hoven said.

Montana is one of five states in the country without a general sales tax, and proposals for one have been highly polarizing in the past. The current Democratic and Republican candidates for governor have said they oppose a general sales tax policy, although they do use the issue to attack one another.

The state could bring in up to $1.5 billion in the first year of a 4% general sales tax, according to an analysis from the Montana Department of Revenue.

The committee did not take a formal vote on the bill draft, but declined to move it forward.