Governor, Democrats: Let's Support Montanans and MT Businesses

Governor, Democrats: Let's Support Montanans and MT Businesses

Due to an action by House Republicans on the Taxation Committee, non-residents will continue to be able to evade their responsibilities to pay taxes they owe to Montana. On a party line vote, the House Taxation committee tabled three bills aimed at improving the tax compliance of out-of-state businesses and residents.

"Tabling these bills has allowed out-of-state businesses to continue to have a competitive advantage over our main street businesses here in Montana," said Governor Brian Schweitzer. "On top of that, Montanans are paying higher taxes because non-residents are not paying their fair share."

Senate President Mike Cooney added, "I think it is wrong for any legislator to vote to allow out-of-state residents to escape paying their taxes. It doesn't make sense, and it's unfair to law-abiding Montana taxpayers."

"Democrats and Republicans can come together on the issue of accountability," said House Minority Leader John Parker. "This is not a partisan issue - this is common sense."

Figures from the Department of Revenue show:

* Montana wage earners pay the taxes that they owe 97% of the time

* Montana retirees pay the taxes that they owe about 99% of the time

* Non-residents pay the taxes they owe on average only 25% of the time

The bills - HB 74, HB 100 and HB 109, are part of the Department of Revenue (DOR) tax compliance package aimed at collecting money owed by out-of-state residents and corporations.

The bills would have been part of a package that addresses the imbalance that favors out-of-state businesses in two ways:
Relieve the burden on small Montana businesses
Take away out-of-state competitive tax advantages

House Bill 74 would have created a withholding system for non-residents and out-of-state companies who own mineral royalties in Montana and owe taxes on those royalty payments. A study conducted by the DOR showed that 80% of non-residents who owe taxes on mineral royalties do not pay the tax due. Montana would have been able to collect about $4.8 million per year. The bill was supported by both the Montana Petroleum Association and the Montana Mining Association, but was tabled by the Republicans on the House Taxation Committee.

House Bill 100 would have given the DOR the authority to hire out-of-state attorneys to collect the tax debt on non-residents. There are 2,100 non-residents who owe the state more than $10 million. The bill would have allowed the state to collect $1.4 million per year - money that will not be collected due to the actions of House Republicans.

House Bill 109 would have required Grantor Trusts to file a tax form. These are trusts that can be used by non-residents to hide income that would otherwise be taxable in Montana.

http://governor.mt.gov/news/pr.asp?ID=415