The Revenue Interim Committee held a video conference on April 29 to hear updates from the Department of Revenue and the Montana Tax Appeal Board. The committee also continued its tax credit review responsibilities and considered staff suggestions for clarification legislation.

The Department of Revenue reported that most employees are working remotely. Employees are working at the liquor warehouse and the income tax processing center, and both locations are complying with physical distancing recommendations. Property appraisers are in the field and the agency does not expect delays in the reappraisal process. The state moved the individual income tax deadline to July 15 to match the federal income tax deadline, but other tax deadlines remain in place. Director Walborn updated the committee on peer-to-peer car sharing, indicating that such transactions are subject to the rental vehicle tax. The agency also provided required reports on the qualified endowment tax credit and the student scholarship organization tax credit.

Chair McAlpin of the Montana Tax Appeal Board let the committee know that the Board continues its work. Taxpayers with cases before the board in April and May had the option of holding a phone hearing or delaying the case until later in the summer. Most taxpayers chose to delay. A large industrial property case is also facing delays because the discovery process requires travel of expert witnesses.

As part of the administrative rule review, staff attorney Jaret Coles informed the committee and the public that the Department of Revenue will hold the public hearing on the MEDIA Act rules via Zoom.

The committee received background information on the tax credit for energy conserving expenditures and the alternative energy systems tax credit. The committee is responsible for reviewing these tax credits and making recommendations about whether to retain or eliminate the credits. The committee voted to retain the credit for energy conserving expenditures and requested draft legislation to increase the credit to $800, allow the credit to be refunded, and to make some clarifications to the law. Staff will provide information about eligibility for a similar federal tax credit, and the committee may consider recommendations related to eligible expenditures.

The committee did not make a recommendation on the credit for alternative energy systems, but did request information on how many taxpayers claim the credit for systems that use a recognized nonfossil form of energy generation and how many claim it for low-emission wood or biomass combustion devices. There will be an opportunity to make a recommendation at a future meeting.

The committee approved the drafting of staff-suggested clarification legislation, which will be presented for final approval at the next meeting.

Committee Website: https://www.leg.mt.gov/committees/interim/2019rvic/
Committee Staff: memoore@mt.gov or 406-444-4496