Local option sales tax fails 

Even before SB 506 made it past the Senate Taxation Committee by a slim 6-5 vote, proponents of the local option sales tax bill knew it’d be an uphill climb to get it to Gov. Brian Schweitzer’s desk. That work was cut unexpectedly short Saturday when the Senate voted 36-12 to table the bill indefinitely.

SB 506 would have allowed state municipalities to ask voters to approve or deny a limited local sales tax. Missoula Mayor John Engen testified in support of the bill and was among its most vocal supporters. Various versions of a local option sales tax bill have been introduced in the legislature for the last 20 years, but never passed.

Supporters of SB 506 were more optimistic considering the bill’s limited scope. Only lodging, prepared meals and drinks, recreational services and rental vehicles would have been taxed. The bill also mandated a series of property tax breaks to mitigate the effect on local Montanans.

“We think it’s the best version of a local option bill that we’ve seen,” said Alec Hansen, executive director of the Montana League of Cities and Towns. “Twelve million people visit this state each year. And they’ve got to start paying their fair share of the costs and that’s what this bill is all about.”

Engen testified in front of the Senate Taxation Committee that he simply wanted to give voters a chance to weigh in on the issue. Saturday’s Senate vote tables that chance for at least another two years.

“Clearly it’s a disappointment,” Engen says. “We feel we ought to be able to ask Missoula voters to support a local option tax to find some new revenue and take some advantage of the folks who visit us and enjoy our amenities. The Senate didn’t agree with that so we’ll try again next time.”
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