Senate panel approves tourist tax

Community News Service

HELENA - A bill that would give cities the option of implementing a local sales tax will go before the full Senate after the Senate Taxation Committee approved it Tuesday on a 6-5 vote.

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.

These include prepared food, alcohol served by the drink, lodging, rental cars or recreational machines, and recreational services such as 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 earlier hearings, supporters said it would provide much-needed property tax relief for Montanans, especially the elderly community.

Opponents of the tax plan said that even though the taxes would be aimed at tourists, businesses that had to implement the taxes could suffer.