Panel tables proposed bed-tax hike

Montana’s sales taxes on lodging will likely remain at a combined 7 percent after a tax panel Monday tabled a Helena Democrat’s proposal to bolster the general fund by raising it to 10 percent.

Sen. Mary Ann Dunwell’s House Bill 567 would have doubled the state’s 3-percent accommodations tax, which is assessed on purchases at lodging facilities along with the 4-percent lodging tax. The general fund would receive the vast majority of the higher accommodations tax rate of 6 percent, to the tune of about $30 million per year.

“We heard person after person after person from just about every city and town in Montana last week advocating for these types of tourist taxes,” Dunwell said prior to the vote. “Let’s make the tourists pay for what they enjoy here in Montana. They can help pay for our crumbling roads and bridges, they can help pay for our services.”

Committee Vice-chairman Rep. Kelly Flynn, R-Townshend, countered that the tax hike wouldn’t be limited to non-residents.

“It is not a tourist tax. It is a tax that residents pay when we go to a hotel or motel,” he said.

Dunwell also argued her proposal would create a sustained source of funding, about $300,000 per year, for the state’s efforts to counter last year’s invasive mussel detections. Montana Fish, Wildlife and Parks is asking for about $11.5 million over the next two years to grow its programs to prevent the spread of aquatic invasive species in the state’s waterways.

Opponents during the committee’s hearing on the bill last week criticized the relatively minor amount of new funding for those programs — 0.5 percent of overall accommodations-tax collections — versus the substantial increase in revenue heading into the state’s general fund.

The committee voted down Dunwell’s proposed amendment to increase the invasive-species share of the revenues to 2 percent before voting 12-8 to table the bill.

Reporter Sam Wilson can be reached at 758-4407 or by email at swilson@dailyinterlake.com.