Governor’s Tax-Relief Package Advances in the Legislature

Date: February 19, 2021

Three bad workers’ compensation bills finally introduced. NFIB prepares to fight them.

State Director Ronda Wiggers reports from Helena on the legislative and political week ending February 19.

The Legislature acted on most of Gov. Greg Gianforte’s Montana Comeback Plan this week, which includes:

  • lowering the personal income tax rate
  • doubling the amount of the exemption to business equipment tax
  • changing the way we tax corporations in Montana
  • removing the sale of employee-owned stock from capital gains tax.

Specifically,

  • SB 159 Personal Income Tax Relief Act – This bill lowers the Montana personal income tax rate from 6.9% to 6.75% and an accompanying ‘trigger’ bill (SB 182) will continue to lower the rate based on the state’s ending fund balance. SB 159 passed out of the Senate Tax Committee and will be debated on the Senate floor next week.
  • HB 303 the BIG Jobs Act – This measure increases the exemption on business equipment taxes from the current $100,000 to $200,000. This has passed the House and been sent over to the Senate.
  • HB 252 creates a non-refundable employer tax credit for employer-paid trades education passed out of House Tax and will be debated on the House floor next week.
  • SB 184 Montana Entrepreneur Magnet Act will exempt from the capital gains tax the sale of some employee-owned stock. The Senate Tax Committee passed this bill. It’s headed to the Senate floor for debate.
  • SB 181 Corporate Tax Modernization Act deals with moving from the apportionment method of taxing multi-state corporations to the sales-only method.  This bill met with some opposition from existing Montana businesses at the hearing. No action was taken in committee.

Update on Other Bills NFIB is Tracking

  • HB 228 Establish the Family Medical Leave Act – This bill proposes up to a 1% payroll tax to pay for a variety of family medical leave that would then be mandatory for an employer to offer. NFIB opposed this bill, the House Business & Labor committee TABLED it.
  • HB 351 Revise Disability Parking Laws – This bill would make it a misdemeanor with a fine of $100 if the disabled parking space is not kept free from snow, shopping carts, etc. It was TABLED in the House Judiciary Committee.
  • HB 198 Revise Workers’ Comp death benefit law – Currently, if an employee dies on the job, Workers’ Compensation pays for the funeral costs, up to $4,000.  As this does not cover the average cost, this bill would increase the amount to “up to $10,000” and adjust it for inflation in the future.  Passed the House and has been referred to the Senate Business Committee.
  • SB 91 Require fiscal notes to include business impacts – This bill has come forward in the past and NFIB has always struggled with how they would gather the business information, as it may be very different for different businesses.  The bill is now amended to work with a college economics class, or something similar, to have them do the analysis.  It has passed the Senate and is headed to the House.

New Bills of Interest to Small Business       

Expected Workers Compensation Bills Introduced

All three of these bills have been referred to the House Business and Labor Committee. Taken together they will restrict the Montana State Fund’s financial strength, possibly to the brink of insolvency at times, and reduce State Fund’s competitiveness in the market and make their policies much more expensive and less attractive to Montana small businesses.

These bills attempt to:

  • eliminate dividends
  • add a 2.75% tax to the policies
  • eliminate their ability to rate plans, thus causing safe customers to see a rise in premiums
  • include a number of other seemingly small changes that will all have a negative effect on rates.  ‘

NFIB will continue to work with other industry groups opposed to these proposals.

Hearing Schedule for the Week Ahead        
 
Tuesday, 9 a.m. Senate Business and Labor Committee – SB 260 Generally revise related to property interest and transfer of businesses – This bill clarifies that licenses and intangibles are also a property right that needs to be compensated if taken for public purpose.

Wednesday, 8:30 a.m. House Business and Labor Committee – HB 412 Restores the right for a worker to choose a treating physician in workers’ compensation – this is the same bill from the last session. It allows doctor shopping and is very costly to workers’ compensation, thus increasing rates.

Thursday,8:30 a.m. House Business and Labor Committee – HB 284 Provide Living Wage – increases the minimum wage in Montana to $15 an hour and removes the lower minimum rate for businesses with gross sales less than $110,000.  NFIB will oppose. Also scheduled HB 378 Create a mini-COBRA law for small employer health plans.
                                  
Previous Reports and Related News

Photo snip courtesy of the Montana Public Affairs Network

 

 

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