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Seek tax relief without strangling tourism

by Daily Inter Lake
| January 26, 2025 12:00 AM

Tax relief is top of mind for the 2025 Legislature and lawmakers are getting creative with proposed solutions — some better than others.

A slew of bills on the docket take aim at reducing the tax burden on homeowners after a brutal reappraisal cycle two years ago left Montana residents floored. Tax bills doubled in some areas most affected by the pandemic real-estate market that saw a wave of newcomers drive up home prices. The scenario left some longtime residents, many on fixed incomes, unsure if they could afford to live in the place they have always called home. 

Among the proposed bills to fix the state’s tax system that disproportionally weighs on homeowners is Sen. Carl Glimm’s Senate Bill 90. Endorsed by Senate Republican leadership, the plan would redirect money collected from state bed taxes into a credit that would be applied annually to property tax bills for primary residences. 

Montana applies a 4% lodging facility use tax and 4% lodging sales tax that rakes in some $120 million annually that is used for tourism promotion and research, and visitation-related grants. Glimm’s bill would divert about $93 million of the total into the new property tax assistance account, with an additional $8 million from a rental car tax going into the fund as well. After being divided up among all qualifying properties, the approximately $100 million would equate to about $436 in tax assistance in 2026. 

In supporting the idea, Sen. Matt Regier tapped into widespread frustration about ever-increasing visitation to the state and its negative impacts on Montanans’ way of life. Why should the state fund tourism promotion if no one wants more tourists? 

“There’s a big sentiment in Montana of ‘Why are we spending millions of dollars to attract more people to move in and buy the house next door and raise your property taxes?” Regier said before a hearing on the bill last week. 

But why risk strangling the golden goose that is tourism when there are other, better, ideas on the table to fix property taxes? 

Local retail businesses, restaurants, outfitters, grocery stores, auto shops, campgrounds and local crafters all rely on visitor spending to the tune of $5.8 billion annually. In Northwest Montana’s Glacier Country, the average annual nonresident spending is nearly $2 billion — with about $1 billion of that spent with Flathead County businesses, the most in the state. 

Glimm’s bill also cuts out grants for some of the area’s most beloved events, like the Evergreen Show ’n Shine car show, the Bigfork Whitewater Festival, Live History Days in Polson and the Bigfork Festival of Arts. 

Tourism wouldn’t dry up overnight if promotional funding is cut off, but over time the effects would be very real and visibly seen on Main Streets across the state. The fiscal note on Glimm’s bill doesn’t explain how it might impact shop owners and their employees, restaurant servers and cooks, mechanics and auto part suppliers, fishing and hiking guides, or the hundreds of peripheral industries that support tens of thousands of jobs. 

Glimm’s idea is simply not worth the risk. 

The governor-backed homestead tax proposal is the better path toward real tax relief. 

Sponsored by Rep. Llew Jones, R-Conrad, House Bill 231 lowers taxes on primary residences by raising them for vacation rentals and second homes. It is estimated the plan would lower taxes by about 17% on 230,000 primary homes. 

It could also help lower long-term rental rates and potentially prod landlords toward more long-term leases. 

Lower taxes for homeowners and increased housing options? That sounds like a home run plan without undermining Montana’s tourism cash cow.