1999 Montana Legislature

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SENATE BILL NO. 212

INTRODUCED BY D. MAHLUM



A BILL FOR AN ACT ENTITLED: "AN ACT RELATING TO THE EQUALIZED TAX TREATMENT BETWEEN IN-STATE AND OUT-OF-STATE OWNERS OF RENTAL VEHICLES; IMPOSING A 6 PERCENT SURCHARGE ON CERTAIN RENTAL VEHICLES; PROVIDING THAT THE SURCHARGE BE REMITTED TO THE DEPARTMENT OF REVENUE; REQUIRING THAT RENTAL VEHICLE OWNERS AND OPERATORS OBTAIN A PERMIT FROM THE DEPARTMENT OF REVENUE; PROVIDING A REIMBURSEMENT FROM THE SURCHARGE COLLECTED FOR 50 PERCENT OF THE TAXES AND FEES PAID IN MONTANA ON RENTAL VEHICLES; PROVIDING AN EXCEPTION FOR RENTAL VEHICLES RENTED PURSUANT TO A CONTRACT FOR INSURANCE; PROVIDING FOR THE DISTRIBUTION OF THE EXCESS REVENUE FROM THE SURCHARGE TO THE MONTANA HERITAGE PRESERVATION AND DEVELOPMENT ACCOUNT, TO THE DEPARTMENT OF COMMERCE FOR THE MONTANA MAIN STREET PROGRAM, TO THE GENERAL FUND OF EACH COUNTY, AND TO THE STATE GENERAL FUND; AMENDING SECTION 22-3-1004, MCA; PROVIDING CONTINGENT VOIDNESS PROVISIONS RELATED TO SUBMISSION OF THE SURCHARGE TO THE ELECTORATE; AND PROVIDING EFFECTIVE DATES AND AN APPLICABILITY DATE."



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:



     NEW SECTION.  Section 1.  Definitions. As used in [sections 1 through 8], the following definitions apply:

     (1) (a) "Gross receipts" means all receipts from sources within the state, whether in money or other consideration, received from engaging in the business of renting rental vehicles.

     (b) "Gross receipts" does not include the amount received for gas and insurance.

     (2) "Rental vehicle" means a passenger vehicle that:

     (a) is rented for a period of not more than 30 days;

     (b) is rented without a driver;

     (c) is designed to transport 15 or fewer passengers; and

(d) has a manufacturer's rated capacity of 1 ton or less.

     (3) "Rental vehicle owner or operator" means a person who owns or leases rental vehicles and who rents or offers to rent the rental vehicles.



     NEW SECTION.  Section 2.  Rental vehicle surcharge -- reimbursement -- exception -- collection and reporting. (1) (a) Except as provided in subsection (1)(b), there is imposed a surcharge on rental vehicles. The surcharge is 6% of the rental base price, exclusive of gas and insurance, as stated in the rental contract. The surcharge must be stated in the rental contract and collected in accordance with the terms of the contract. The proceeds from the surcharge are to be used for providing a reimbursement for 50% of the motor vehicle taxes and fees paid in Montana on rental vehicles at the time of registration and for distribution, as provided in [section 7].

     (b) The surcharge imposed by this section does not apply to the rental base price for rental vehicles rented pursuant to a contract for insurance.

     (2) The rental vehicle owner or operator shall report to the department, at the end of each calendar quarter, the gross receipts actually collected during that quarter attributable to the rental contracts, exclusive of gross receipts attributable to contracts for insurance. The report must be on a form provided by the department. The report is due on or before the last day of the month following the end of the calendar quarter and must be accompanied by a payment in an amount equal to the surcharge required to be collected under subsection (1).

     (3) The department shall credit the surcharge and any interest and penalties to a rental vehicle surcharge suspense account.



     NEW SECTION.  Section 3.  Rental vehicle permit application -- requirements -- place of business -- form. (1) A rental vehicle owner or operator desiring to engage in the business of renting a rental vehicle shall file with the department an application for a permit. If the owner or operator has more than one location in which the owner or operator maintains an office or other place of business, an application may include multiple locations.

     (2)  Each rental vehicle owner or operator obligated to file a report under [sections 1 through 8] is required to file an application for a permit.

     (3)  Each application for a permit must be on a form prescribed by the department and must set forth the name under which the applicant intends to transact business, the location of the applicant's place or places of business, and other information that the department may require. The application must be filed by the rental car owner or operator if the owner or operator is a natural person, by a member or partner if the owner or operator is an association or partnership, or by a person authorized to sign the application if the owner or operator is a corporation.

     (4) A rental vehicle owner or operator who fails to comply with this section is subject to a fine of not less than $50 and not more than $100.



     NEW SECTION.  Section 4.  Audits -- records. (1) The department may audit the books and records of a rental vehicle owner or operator to ensure that the proper amount of the surcharge imposed by [section 2] has been collected. An audit may be done on the premises of the owner or operator or at any other convenient location.

     (2)  The department may request the owner or operator to provide the department with books, ledgers, registers, or other documents necessary to verify the correct amount of the surcharge.

     (3)  The owner or operator shall maintain and have available for inspection by the department books, ledgers, registers, or other documents showing the collection of rental vehicle surcharge for the preceding 5 years.

     (4)  Except in the case of a person who, with intent to evade the surcharge, purposely or knowingly files a false or fraudulent report violating the provisions of this part, the amount of surcharge due under any report must be determined by the department within 5 years after the return is made, and the department thereafter is barred from revising any report or recomputing the surcharge due, and no proceeding in court for the collection of the surcharge may be instituted unless notice of any additional surcharge is provided within the 5-year period.

     (5)  An application for revision may be filed with the department by an rental vehicle owner or operator within 5 years from the original due date of the report.



     NEW SECTION.  Section 5.  Rental vehicle surcharge -- failure to pay or file -- penalty -- review -- interest. (1) A rental vehicle owner or operator who fails to file the report as required by [section 2] must be assessed a penalty as provided in [section 1 of House Bill No. 132]. The department may waive the penalty as provided in 15-1-206.

     (2) A rental vehicle owner or operator who fails to make payment or fails to report and make payment as required by [section 2] must be assessed penalty and interest as provided in [section 1 of House Bill No. 132]. The department may waive any penalty pursuant to 15-1-206.

     (3) (a) If a rental vehicle owner or operator fails to file the report required by [section 2] or if the department determines that the report understates the amount of surcharge due, the department may determine the amount of the surcharge due and assess that amount against the owner or operator. The provisions of 15-1-211 apply to any assessment by the department. The taxpayer may seek review of the assessment pursuant to 15-1-211.

     (b) When a deficiency is determined and the surcharge becomes final, the department shall mail a notice and demand for payment to the owner or operator. The tax is due and payable at the expiration of 30 days after the notice and demand were mailed. Interest on any deficiency assessment must be computed as provided in [section 1 of House Bill No. 132].



     NEW SECTION.  Section 6.  Credit for overpayment -- interest on overpayment. (1) If the department determines that the amount of tax, penalty, or interest paid for any year is more than the amount due, the amount of the overpayment must be credited against any tax, penalty, or interest then due from the taxpayer and the balance refunded to the taxpayer, to the taxpayer's successor through reorganization, merger, or consolidation, or to the taxpayer's shareholders upon dissolution.

     (2)  Except as provided in subsection (3), interest is allowed on overpayments at the same rate that is charged on [unpaid taxes as provided in [section 1 of House Bill No. 132]] from the due date of the return or from the date of overpayment, whichever is later, to the date that the department approves refunding or crediting of the overpayment.

     (3)  (a) Interest does not accrue during a period in which the processing of a claim for refund is delayed more than 30 days by reason of failure of the taxpayer to furnish information requested by the department for the purpose of verifying the amount of the overpayment.

     (b)  Interest is not allowed:

     (i)  if the overpayment is refunded within 6 months from the date the return is due or from the date the return is filed, whichever is later; or

     (ii) if the amount of interest is less than $1.

     (c)  Only a payment made incident to a bona fide and orderly discharge of actual tax liability or one reasonably assumed to be imposed by [sections 1 through 8] is considered an overpayment with respect to which interest is allowable.



     NEW SECTION.  Section 7.  Rental vehicle surcharge -- reimbursement -- exception -- distribution. (1) Except as provided in subsection (2)(b), a rental vehicle owner or operator is entitled to a reimbursement of the rental vehicle surcharge paid to the department in the previous calendar year under the provisions of [section 2]. The reimbursement amount is equal to 50% of the motor vehicle taxes and fees imposed under Title 61, chapter 3, at the time of registration in the previous calendar year.

     (2) (a) On or before February 15 of each year, the owner or operator of the rental vehicles on which the surcharge was collected shall file a report with the department stating the:

     (i) gross receipts collected on the rental contracts;

     (ii) gross receipts collected on rental contracts pursuant to a contract for insurance;

     (iii) total amount of vehicle taxes and fees, as adjusted in subsection (2)(b), paid in Montana at the time of registration in the previous calendar year;

     (iv) total amount of the surcharge collected in the previous calendar year; and

     (v) amount, if any, by which the surcharge exceeded 50% of the taxes and fees.

     (b) For the purposes of the reimbursement provided in this section, the amount of taxes and fees paid in Montana by a rental vehicle owner or operator is equal to the taxes and fees paid in Montana multiplied by the result of 1 minus the ratio of gross receipts collected on rental vehicles rented pursuant to a contract for insurance to total gross receipts collected on all rental contracts.

     (3) Within 45 days of receiving the report, the department shall refund from the rental vehicle surcharge suspense account to the rental vehicle owner or operator the amount of the surcharge collected that does not exceed 50% of the taxes and fees paid.

     (4) Within 30 days of making refund to a rental vehicle owner or operator under subsection (3), the department shall remit the amount remaining in the account for the surcharge collected in the previous year to the treasurer for distribution as follows:

     (a) except as provided in subsection (5), 80% to the Montana heritage preservation and development account provided for in 22-3-1004;

     (b) 10% to be distributed equally to the general fund of each county;

     (c) 10% to the state general fund.

     (5) Of the total amount that would be distributed under subsection (4)(a), up to $200,000 a year must first be transferred to an account in the state special revenue fund to the credit of the department of commerce for the Montana main street program.



     NEW SECTION.  Section 8.  Rulemaking authority. The department shall adopt rules as may be necessary to implement and administer [sections 1 through 8].



     Section 9.  Section 22-3-1004, MCA, is amended to read:

     "22-3-1004.  Montana heritage preservation and development account. (1) There is a Montana heritage preservation and development account in the state special revenue fund.

     (2)  Money deposited in the account must be used for:

     (a)  the purchase of properties in Virginia City and Nevada City;

     (b)(a)  restoration, maintenance, and operation of historic properties in Virginia City and Nevada City; and

     (c)(b)  purchasing, restoring, and maintaining historically significant properties in and from Montana that:

     (i)  are in need of preservation; or

     (ii) will enhance the lifestyle of Montana communities under the Montana main street program.

     (3)  The account is statutorily appropriated, as provided in 17-7-502, to the Montana heritage preservation and development commission to be used as provided in this section."



     NEW SECTION.  Section 10.  Codification instruction. [Sections 1 through 8] are intended to be codified as an integral part of Title 15, and the provisions of Title 15 apply to [sections 1 through 8].



     NEW SECTION.  Section 11.  Coordination instruction. (1) If [this act] is passed and approved and if LC 662 is approved by the electorate, then the bracketed language in [section 1 of LC 662] is void and [section 2 of this act] and [section 1 of LC 662] must be codified as the same section.

     (2) If House Bill No. 132 is not passed and approved then [section 5 of this act] reads as follows:

     "NEW SECTION.  Section 5.  Rental vehicle surcharge -- failure to pay or file -- penalty -- review -- interest. (1) A rental vehicle owner or operator who fails to file the report as required by [section 2] must be assessed a penalty of 10% of the tax that should have been collected during the calendar quarter. Upon showing of good cause, the department may waive the penalty.

     (2) A rental vehicle owner or operator who fails to make payment or fails to report and make payment as required by [section 2] must be assessed a penalty of 10% of the amount that was not paid. Upon showing of good cause, the department may waive the penalty.

     (3) (a) If a rental vehicle owner or operator fails to file the report required by [section 2] or if the department determines that the report understates the amount of surcharge due, the department may determine the amount of the surcharge due and assess that amount against the owner or operator. The provisions of 15-1-211 apply to any assessment by the department. The taxpayer may seek review of the assessment pursuant to 15-1-211.

     (b) When a deficiency is determined and the surcharge becomes final, the department shall mail a notice and demand for payment to the owner or operator. The tax is due and payable at the expiration of 30 days after the notice and demand were mailed. Interest on any deficiency assessment bears interest until paid at the rate of 1% a month or fraction of a month, computed from the original due date of the return.

     (4) The amount required to be paid under [section 2] accrues interest at the rate of 1% a month or part of a month from delinquency until paid."

     (3) If House Bill No. 132 is not passed and approved, then the bracketed language referring to unpaid taxes in [section 6(2) of this act] is void and the phrase "a deficiency assessment" must be inserted.



     NEW SECTION.  Section 12.  Effective dates -- applicability. (1) Except as provided in subsection (2) and (3), [this act] is effective January 1, 2000, and applies to all rental vehicles rented and to motor vehicle taxes and fees paid after December 31, 1999.

     (2) For the purposes of promulgating administrative rules, [section 8 and this section] are effective July 1, 1999.

     (3) [Sections 1 through 7] are effective upon the occurrence of the contingency provided for in [section 13(1)].



     NEW SECTION.  Section 13.  Contingent voidness. (1) If Constitutional Initiative No. 75, enacting Article VIII, section 17, of the Montana constitution is declared invalid, then [sections 1 through 7] are effective January 1 of the year following the year in which Constitutional Initiative No. 75 is declared invalid.

     (2) If LC 662 is submitted to and is not approved by the qualified electors of Montana, then [this act] is void.

- END -




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