The most recent attempt to expand sales tax in Montana has stalled in the Legislature.

The House Taxation Committee tabled a bill for a local option sales tax on Wednesday — just six days after Rep. Chris Pope, D-Bozeman, introduced it.

House Bill 740 would have allowed cities and consolidated city-county governments to seek voter approval of a sales tax of up to 4 percent on non-essential items. Voters would have had to reconsider the tax every 10 years.

Pope proposed allocating up to 40 percent of the revenue to rebates for residential property taxpayers, up to 15 percent for tax relief to renters, at least 40 percent for local infrastructure and up to 5 percent to cover the cost of collecting the tax.

He said the tax would help cities like Bozeman pay for the services used by the millions of tourists who visit the state each year. He argued the tax wouldn’t be regressive because essential goods — including medicine, food and utilities — would be exempted and because the revenue would assist property taxpayers.

However, the committee rejected his claim, with a handful of members saying they viewed the tax as regressive and don’t support using it to reduce cities’ reliance on property tax revenue.

Bozeman officials have advocated throughout the legislative session for the option to levy a sales tax. They have said the city needs to raise more money to address its rapid growth but that raising property taxes is unsustainable.

“When you add five million visitors and hundreds of new homes a year, property taxes can no longer hold the load …,” Mayor Cyndy Andrus said. “I need another tool. I need something that works.”

Other bill supporters, including representatives of the Montana Infrastructure Coalition, the Montana League of Cities and Towns and the Southwest Montana Building Industry Association, pointed out that the state’s resort tax, which allows small tourist communities to levy a 3 percent tax on some items, has funded infrastructure and services that benefit residents and visitors without increasing property taxes.

Opponents said a local option sales tax would target the wrong people.

Brad Griffin, president of the Montana Retail Association, and Riley Johnson, Montana director of the National Federation of Independent Business, said the sales tax would harm businesses, struggling to compete with online retailers.

Griffin suggested lawmakers focus on implementing a statewide sales tax, which, unlike the proposed local option sales tax, would apply to both brick-and-mortar stores and online retailers.

Liz Stavick, of the Montana Farm Bureau, said a local sales tax would hurt rural residents who travel to larger towns for supplies but don’t necessarily use the infrastructure the tax would fund.

Over the years, lawmakers have repeatedly rejected sales tax legislation. This year is no exception with the House Taxation Committee killing several bills, including one that would have imposed a statewide sales tax, one that would have let counties tax some retail sales to pay for infrastructure, one that would have levied a local option luxury tax and one that would have created a local option tax on lodging and car rentals.

The only sales tax bill still moving through the Legislature would allow communities with a resort tax to increase the rate from 3 percent to 4 percent and use the additional revenue for infrastructure. The bill passed the Senate 33-16 and will be heard by the House Taxation Committee next week.

House Joint Resolution 35, which the House Taxation Committee will consider Tuesday, requests that a study of state and local tax systems be completed before next the legislative session.

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