Mike Phillips

Montana Office of Tourism

Lawmakers are considering whether to give local governments the authority to ask their voters to approve a local option sales tax. The money raised would be used to provide property tax relief and pay for public works projects. 

Senate Bill 331 is based on the existing resort tax model that’s assessed on goods and services purchased by tourists.  Current state law restricts the resort tax only for communities with a population under 5,500 and draw a high number of tourists. Local residents vote to impose this tax. The money collected pays for public works projects and property tax relief.


Jackie Yamanaka

Schools, the state of Montana, and local governments all benefit from revenue from coal, directly and indirectly.  Besides income and property taxes, there’s also the severance tax on coal.  Half of that tax revenue goes into the permanent Coal Severance Tax Trust. That money can’t be spent without approval from at least three-fourths of both the Montana House and Senate. The other 50% goes to the state’s general fund and a myriad of projects, including for the long-range building program, conservation districts, the state Library Commission, and the cultural trust.


Jackie Yamanaka

This week, the topics of discussion from the Montana Legislature: a local option tax proposal and sentencing reform in the state’s criminal justice system.


State Senator Mike Phillips, D-Bozeman, had a local option sales tax bill drafted, even though past Legislatures have rejected such proposals.

Phillips said what makes this proposal different is it would be temporary. The tax, to be enacted by local voters, would be in effect only long enough to pay for what he calls "critical" public works or infrastructure project and a minimum of 10% of the revenue raised would have to go to homeowners in the form of property tax relief.