HOUSE BILL NO. 240
INTRODUCED BY E. SWANSON, J. TESTER, B. DEPRATU, D. MOOD, K. OHS, C. TUSS, M. WATERMAN, M. TAYLOR
BY REQUEST OF THE JOINT SELECT COMMITTEE ON JOBS AND INCOME AND THE STATE AUDITOR
A BILL FOR AN ACT ENTITLED: "AN ACT ALLOWING A 3-YEAR 5-YEAR TAX CREDIT FOR CERTAIN
EMPLOYERS WHO MAKE A HEALTH BENEFIT PLAN AVAILABLE TO THEIR EMPLOYEES; BASING THE
CREDIT ON PREMIUM PAYMENTS PAID BY THE EMPLOYER FOR THE BENEFIT OF EMPLOYEES;
PROVIDING LIMITATIONS TO THE CREDIT; CREATING AN ACCOUNT WITHIN THE STATE SPECIAL
REVENUE FUND; PROVIDING THAT REFUNDS MAY BE PAID TO CERTAIN EMPLOYERS; AND PROVIDING
AN IMMEDIATE EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Tax credit for contributions to employee health benefit plans for certain employers.
(1) An individual, partnership, small business corporation, as defined in 15-31-201, or a limited liability company, as
defined in 35-8-102, is allowed a tax credit for a 3-year 5-YEAR period against taxes imposed by 15-30-103 or 15-31-101
for the amount of premiums for a health benefit plan issued pursuant to Title 33, chapter 22, part 18, paid by the taxpayer
for the benefit of the taxpayer's employees, subject to the conditions of subsections (2) and (3).
(2) The credit is available only to employers who:
(a) have not provided employee health care benefits for the 2 tax years immediately preceding the first tax year in which the credit is claimed; and
(b) employ at least two, but not more than nine, eligible employees. For the purposes of this subsection (2)(b), "eligible employee" has the same meaning as provided in 33-22-1803.
(3) An employer is entitled to a tax credit for a maximum of nine eligible employees, computed as follows:
(a) the credit in the first tax year is an amount equal to 50% of premium payments not in excess of $200 paid for the benefit of each employee in each month of the tax year;
(b) the credit in the second tax year in an amount equal to 35% of premium payments not in excess of $200 paid for the benefit of each employee in each month of the tax year; and
(c) the credit in the third tax year is an amount equal to 25% of premium payments not in excess of $200 paid for the
benefit of each employee in each month of the tax year.;
(D) THE CREDIT IN THE FOURTH TAX YEAR IS AN AMOUNT EQUAL TO 25% OF THE PREMIUM PAYMENTS NOT IN EXCESS OF $200 PAID FOR THE BENEFIT OF EACH EMPLOYEE IN EACH MONTH OF THE TAX YEAR; AND
(E) THE CREDIT IN THE FIFTH TAX YEAR IS AN AMOUNT EQUAL TO 25% OF THE PREMIUM PAYMENTS NOT IN EXCESS OF $200 PAID FOR THE BENEFIT OF EACH EMPLOYEE IN EACH MONTH OF THE TAX YEAR.
(4) If the amount of the credit exceeds the employer's tax liability for the tax year, the amount may be
refunded or carried forward for deduction from the employer's tax liability in the next succeeding tax
year or years until the total amount of the credit is deducted from tax liability. A tax credit may not be
refunded or carried forward after the fourth SIXTH and subsequent tax years.
(5) IF THE CREDIT ALLOWED UNDER THIS SECTION IS CLAIMED, THE AMOUNT OF ANY DEDUCTION ALLOWED OR ALLOWABLE UNDER THIS CHAPTER FOR THE AMOUNT THAT QUALIFIES FOR THE CREDIT MUST BE REDUCED BY THE DOLLAR AMOUNT OF THE CREDIT ALLOWED.
NEW SECTION. Section 2. Tobacco settlement trust fund account. (1) There is a tobacco settlement
trust fund account in the state special revenue fund in the state treasury.
(2) Unless otherwise provided by law, the money recovered by the state of Montana from any judgment,
settlement, or fine received as a result of a criminal or civil claim against a tobacco company related to
the production, marketing, or use of tobacco products must be deposited in the tobacco settlement trust
fund account.
(3) Funds deposited in the tobacco settlement trust fund account may be used only to provide refunds to
employers providing employee health care benefits pursuant to [section 1].
(4) The state treasurer shall transfer an amount necessary from the tobacco settlement trust fund
account to the general fund to pay any refunds provided for in [section 1(4)] to qualified employers.
NEW SECTION. Section 3. Small business corporation, partnership, and limited liability company tax credit for employee health care benefits. If health benefit plan payments paid for the benefit of employees are claimed as a credit under [section 1] by a small business corporation, as defined in 15-31-201, a partnership, or a limited liability company, as defined in 35-8-102, the credit must be attributed to shareholders, partners, or members or managers of a limited liability company in the same proportion used to report the corporation's, partnership's, or limited liability company's income or loss for Montana income tax purposes.
NEW SECTION. Section 4. Codification instruction. (1) [Section 1] is intended to be codified as an integral part of Title 15, chapter 30, part 1, and the provisions of Title 15, chapter 30, part 1, apply to [section 1].
(2) [Section 2] is intended to be codified as an integral part of Title 15, chapter 31, part 1, and the
provisions of Title 15, chapter 31, part 1, apply to [section 2].
(3) [Section 3] is intended to be codified as an integral part of Title 15, CHAPTER 31, PART 1, and the provisions of Title 15, CHAPTER 31, PART 1, apply to [section 3].
NEW SECTION. Section 5. Coordination instruction. If the state does not receive a payment from any judgment, settlement, or fine received as a result of a criminal or civil claim against a tobacco company related to the production, marketing, or use of tobacco products, then [section 1] must be amended to read:
"NEW SECTION. Section 1. Credit for contributions to employee health benefit plans for certain
employers. (1) An individual, partnership, small business corporation, as defined in 15-31-201, or a limited
liability company, as defined in 35-8-102, is allowed a tax credit for a 3-year 5-YEAR period against taxes
imposed by 15-30-103 or 15-31-101 for the amount of premiums for a health benefit plan issued pursuant to
Title 33, chapter 22, part 18, paid by the taxpayer for the benefit of the taxpayer's employees, subject to the
conditions of subsections (2) and (3).
(2) The credit is available only to employers who:
(a) have not provided employee health care benefits for the 2 tax years immediately preceding the first tax year in which the credit is claimed; and
(b) employ at least two, but not more than nine, eligible employees. For the purposes of this subsection (2)(b), "eligible employee" has the same meaning as provided in 33-22-1803.
(3) An employer is entitled to a tax credit for a maximum of nine eligible employees, computed as follows:
(a) the credit in the first tax year is an amount equal to 50% of premium payments not in excess of $200 paid for the benefit of each employee in each month of the tax year;
(b) the credit in the second tax year in an amount equal to 35% of premium payments not in excess of $200 paid for the benefit of each employee in each month of the tax year; and
(c) the credit in the third tax year is an amount equal to 25% of premium payments not in excess of $200
paid for the benefit of each employee in each month of the tax year.;
(D) THE CREDIT IN THE FOURTH YEAR IS AN AMOUNT EQUAL TO 25% OF THE PREMIUM PAYMENTS NOT IN EXCESS OF $200 PAID FOR THE BENEFIT OF EACH EMPLOYEE IN EACH MONTH OF THE TAX YEAR; AND
(E) THE CREDIT IN THE FIFTH TAX YEAR IS AN AMOUNT EQUAL TO 25% OF THE PREMIUM PAYMENTS NOT IN EXCESS OF $200 PAID FOR THE BENEFIT OF EACH EMPLOYEE IN EACH MONTH OF THE TAX YEAR.
(4) A credit may not be claimed in the fourth SIXTH and subsequent tax years.
(5) IF THE CREDIT ALLOWED UNDER THIS SECTION IS CLAIMED, THE AMOUNT OF ANY DEDUCTION ALLOWED OR ALLOWABLE UNDER THIS CHAPTER FOR THE AMOUNT THAT QUALIFIES FOR THE CREDIT MUST BE REDUCED BY THE DOLLAR AMOUNT OF THE CREDIT ALLOWED.
(5)(6) There is no carryback or carryforward of the credit permitted under this section, and the credit
must be applied in the year in which the health benefit plan payments were made, as determined by the
taxpayer's accounting method, and may not be refunded if the employer has no tax liability."
NEW SECTION. Section 6. Effective date. [This act] is effective on passage and approval.
NEW SECTION. Section 7. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1998.
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Latest Version of HB 240 (HB0240.03)
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