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Bullock: Law changes exempts thousands of businesses from equipment tax

Bullock: Law changes exempts thousands of businesses from equipment tax

  • Updated

HELENA — Democratic Gov. Steve Bullock and a Republican senator on Friday toured a Helena bakery that next year no longer will have to pay a property tax on its business equipment under a new law.

Sen. Bruce Tutvedt, R-Kalispell, sponsored Senate Bill 96. Bullock worked with him on it and signed it into law earlier this year.

“What we did is working together and working not only with Sen. Tutvedt but also businesses across the state, we’ve eliminated the business equipment tax for two-thirds of the companies that pay it,” Bullock said.

The total savings to businesses under the new law will amount to $11 million a year, Bullock said. Those firms exempted from the tax “will be able to do things like put it back into their businesses, take a little bit more money home, pay their employees a little more,” he said.

Tutvedt, chairman of the Senate Taxation Committee, thanked Bullock for his hard work on the issue.

“Not taxing the tools of our economic engine improves the lives of our hardworking Montanans and their families and makes Montana a better place to start and grow a business,” Tutvedt said.

The media event at the bakery was to publicize the tax change, which takes effect in 2014. The Revenue Department notified businesses of it by letter sent this week.

Ray Clum, owner of the Great Harvest Bread Co. franchise in Helena, was pleased to learn he won’t have to pay the tax anymore as he showed the elected officials mixing huge bowls that cost more than $1,000 apiece.

“I’d like to thank the governor and the senator for being here and working together and passing this legislation,” he said. “It will help every Great Harvest in the state. I’m sure they will be able to be exempt, and they will be able to pay their employees and then reinvest. I know I will.”

Clum, who bought the bakery this year, said he wants to update some older equipment.

Under the change, businesses, whose equipment is valued at $100,000 or less no longer will have to pay the tax, starting next year. As a result, 10,000 to 11,000 of the 17,000 businesses now paying the tax will be exempt.

Clum said he was surprised to learn this tax even existed when he bought the bakery.

“It’s nice to not have to deal with it,” he said.

Last year, Great Harvest Bread Co. in Helena paid $356 in property taxes on business equipment with an assessed value of $35,553 and a taxable value of $533, the state Revenue Department said.

Asked if he and Tutvedt are looking at eliminating this tax for more businesses in the 2015 Legislature, Bullock said it’s time to celebrate this accomplishment first.

“I continue to speak with Sen. Tutvedt about other areas that potentially we should look at for tax reform, but it’s a little premature to get anywhere on that,” Bullock said.

Tutvedt said, “I think we’re looking at places where we can add economic growth and jobs in Montana and where we can make the tax code simpler and more fair, and where we can find those things, I think we’re going to work together and do it.”

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