Local-option sales tax bill heads toward a vote

HELENA – A bill that would give cities the option of implementing a local sales tax will go before the full Senate after it was passed out of committee, 6-5.

Senate Bill 506, sponsored by Sen. Jeff Essmann, R-Billings, would allow local voters to choose whether to apply a 4 percent sales tax on tourist-centered services, such as prepared food, alcohol served by the drink, lodging, rental cars or recreational machines, and recreational services like sightseeing tours and outfitted trips.

The bill requires that 20 percent of the income from such a sales tax must be shared with counties and, to ease property taxes, 35 percent must go to property-tax relief. Voters could determine if they wanted to enhance those percentages, and they would also decide what to do with the remaining money.

In hearings earlier, supporters said it would provide much needed property tax relief for Montanans, especially the elderly community. Opponents said even though the taxes would be aimed at tourists, the taxable businesses could suffer.

-by CNS correspondent Molly Priddy