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House panel kills local option sales tax bill

House panel kills local option sales tax bill

Associated Press

HELENA - A House committee on Friday balked at the idea of giving voters in every city and county in Montana the final say in imposing local sales taxes.

Members of the House Taxation Committee cited fairness and potential legal concerns in rejecting the bill by Rep. Gary Branae, D-Billings, on a 13-7 vote.

The bipartisan vote doesn't bode well for a similar proposal introduced Thursday before the committee by Sen. Jeff Mangan, D-Great Falls.

Branae and other supporters touted his bill as a way to give counties and municipalities a new source of revenue for government services while lessening the burden on local property taxpayers.

"Cities are finding it difficult to keep their infrastructure up," Branae said. "They're finding it difficult to provide services. The money is just not there."

His bill would have limited any local tax to 4 percent and required voter approval. Voters would also have decided what items to tax and how the revenue would have been used, Rep. Wanda Grinde, D-Billings, said.

"Local control is one of the words we hear around these capitol halls more than any," she said. "We need to give these local jurisdictions an opportunity to go to voters and say this is what we need to do for our community and voters will then decide."

Rep. Bob Lake, R-Hamilton, objected to taking a piecemeal approach to sales taxes, saying if Missoula County enacted one, it would unfairly affect his constituents in neighboring Ravalli County who may work there.

Rep. Jack Ross, R-Absarokee, called the measure "fraught with danger." The state constitution currently has no limit on local option sales taxes, meaning future lawmakers could raise the allowable tax to 6 or 8 percent. General sales taxes are limited to 4 percent under the constitution.

Mangan's legislation is similar but more specific, proposing a 4 percent local option tax on "luxury" goods and items such as campsites, restaurant meals, alcoholic drinks served in bars, ski-lift tickets, daily golfing fees and car rentals. The money raised could be use for public works projects and property tax relief.

The Senate approved that measure, 30-20, last month.

Sales tax proposals in Montana have failed a number of times over the years.

Copyright © 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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