Revenue and Transportation Interim Committee

RTIC to Work on Tax Structure Study Bill for Introduction in 2019 Session

Committee: Revenue and Transportation Interim Committee
Author: Megan Moore
Posted on December 11, 2017


Abstract Image of Tax Planning

The Revenue and Transportation Interim Committee continued its interim work at a Dec. 5 meeting in Helena.

After receiving an update on the Legislative Finance Committee’s interest in studying the state’s tax structure, the committee wrote a letter to the Legislative Finance Committee recommending the committees work together to design a study for the next interim.? The letter cites uncertainty about federal changes to income tax policy and the limited time remaining this interim as reasons for focusing this interim on proposing a well-designed study to the 2019 Legislature.

The meeting included work on the committee’s three interim studies, including an overview of agricultural classification in Montana’s neighboring states and a panel of smaller parcel agricultural property owners.? The panel encouraged the committee to continue to support agricultural classification for smaller parcels and not to change the $1,500 annual gross income requirement.

For the study of tax increment financing (TIF), the committee reviewed data on incremental taxable value and total TIF taxable value as a percentage of city or county taxable value and received a summary of laws governing bonds secured with tax increment.? The committee will meet jointly with the Local Government Interim Committee in March to receive a presentation of an audit of TIF districts conducted by the Legislative Audit Division. After the presentation, the committees are expected to discuss next steps for the TIF study.

The study of centrally assessed and industrial property continued with staff providing updated materials on the classification and taxation of the property in Montana and a comparison to methods used in selected western states.

The agencies for which RTIC has agency monitoring duties provided updates on a number of topics.? Department of Transportation Director Mike Tooley discussed a few planned roundabouts, including one planned for Grass Range that faced enough opposition to cause the project to be canceled. The Director referred the committee to a website that lists all proposed roundabout projects in the state.? Transportation Commissioner Jergeson also discussed with the committee whether the Department of Transportation can cancel a project or whether that falls within the purview of the Transportation Commission.

Department of Revenue Director Mike Kadas provided the committee with preliminary information on how changes to federal individual and corporate income taxes could affect Montana revenues. The Director also discussed office closures resulting from budget cuts during the 2017 legislative session. In addition, DOR staff provided an example of how the change to market sourcing of sales for corporate income tax purposes (contained in House Bill 511) will affect taxpayers and updated the committee on the administrative rules process for that bill.

The Montana Tax Appeal Board chair, Dave McAlpin, also provided the committee an update on its pending cases. Chair McAlpin discussed how that agency plans to absorb budget cuts, which includes no longer reimbursing county tax appeal boards for secretarial costs.

The committee’s next meeting will be March 13-14, 2018, at the Capitol in Helena. For more information visit the committee’s website or contact Megan Moore, committee staff.

Committee Website:? www.leg.mt.gov/rtic
Committee Staff: memoore@mt.gov or 406-444-4496