Increase in Business Equipment Tax Exemption Passes Key Committee

Date: January 22, 2023

Bill reducing the top marginal income tax rate stalls

State Director Ronda Wiggers reports from Helena on the small-business agenda for the legislative and political week ending January 20

Small Business Days a Big Success

  • We had a great time during our first Montana NFIB Small Business Days at the Capitol. Our Capitol tour included visits with Lt. Governor Kristen Juras and Secretary of State Christi Jacobsen, as well as a visit to the Supreme Court Chambers. Montana State Fund gave an update on legislation that could affect workers’ compensation costs and we had the opportunity to visit with legislators about small business issues during the two-day event.

State of the State

  • Gov. Greg Gianforte will deliver his State of the State address on Wednesday evening, January 25.

The Legislative Week in Review

  • House Judiciary heard HB 161, a measure to revise computer crimes.
    This bill adds substantial language to the crime of unlawful use of a computer to update the statute. It includes intentional introduction of a virus, the stealing of data, ‘hacking’ a computer to alter data and tracking someone via computer without authorization. NFIB is monitoring this bill. House Judiciary passed the bill out of committee, and it will be debated on the House floor next week. 
  • SB 95, revising theft laws
    Passed out of Senate Judiciary by an 8-3 vote and then passed the Senate floor by a vote of 36-4. As prosecuting more theft incidents will likely have an impact on the courts, the Finance & Claims Committee will now review the fiscal note next week. A few years ago, the Legislature re-wrote the theft laws in an attempt to reduce the burden on the courts. NFIB opposed many of those changes. The changes made writing bad checks for less than $500 almost unpunishable and theft of property up to $1,500 in value only a fine of $500. These changes led to increases in property theft and stolen checks. This bill will revert that legislation so that the fine aligns more closely with the amount stolen and jail time is once again a possibility for repeat offenders. There is debate on the cost to the state of enforcing these laws and the cost to business for not having these laws in place to enforce. 
  • NFIB continues to work on amendments to SB 24, which would require corporations to file electronic income tax returns.
    Although we recognize the department’s desire to reduce paper, the primary concern is that there is no carve-out for very small corporations. The original bill allowed for some hardship exclusions, but they had to be applied for 30 days prior to filing deadlines. We were concerned that if a business’ IT was not compatible with the state, its return would be refused. We were also concerned that there was no notification to these businesses prior to rejecting a paper return. If either of these were to happen, the fine would be the same as if you had failed to file. We are working with the CPA’s and the Department of Revenue on amendments that will address all of these issues. 
  • SB 146, which would revise laws relating to wage transparency, was heard in Senate Business & Labor January 17.
    Although the committee did not seem supportive, it has taken no action on the bill. NFIB will continue to oppose this legislation. 
  • SB 121, would reduce the top marginal income tax rate and increase the EITC
    The measure was heard in the Senate Tax Committee January 17. NFIB supported the proposal to reduce the top marginal rate from 6.9% to 5.9%. The bill had a very positive hearing, but the committee has not yet taken executive action. 
  • NFIB joined many different business organizations to enthusiastically support HB 212, which would increase the business equipment tax exemption. It was heard in the House Tax Committee on January 17. The bill proposes to increase the amount of business equipment that is exempt from the tax from $300,000 to $1 million. It passed the House Tax committee on a unanimous vote and is now headed to Appropriations for a review of the fiscal impact on the state budget.

Bills NFIB is Monitoring

  • SB 22 Revise independent contractor laws
    This is cleaning up a bill from last session that had good intentions, but was poorly written. The intent is that if an employer hires a contractor that holds themselves out to have an IC and then does not, the employer would not be fined. However, it was written poorly and ended up treating work comp and UI differently in the same situation. The first draft of this bill also has some problems and NFIB continues to work with other trade associations to produce a good bill. 
  • LC 172 Generally revise online commerce laws
    This legislation is an attempt to thwart those who shoplift merchandise and then sell it online. This bill defines a “third party seller” as someone who sells online that is NOT a wholesaler for the marketplace platform and/or does NOT disclose their business address and contact information to the general public. If the “third party seller” sells over $20,000 in merchandise in one year, the platform operator is required to obtain information to determine who they are, where they are located and where they bank. The contact information must be disclosed to the public at that time. If the seller refuses to disclose this information, they are to be blocked on the marketplace platform

Pro – the increase in shoplifting has hurt many businesses and online marketplaces make it easy for shoplifters to sell their goods.

Con – this will likely result in an extra step of paperwork for legitimate businesses wanting to market online and those that are stealing will simply create numerous fake business names to keep all of them under $20,000 in sales.

  • LC 1002 Prohibit employee termination for legal social media posts
    This bill is in Executive Review and pretty much does exactly as the title says. This only applies to personal social media accounts, not those intended for business-related purposes. The ability to terminate if an employee uses social media to disclose trade secrets, releases proprietary, confidential or financial data, or conducts criminal defamation remains in the law. 
  • LC 3930 Create a mini-COBRA law for small employer health insurance plans
    As the title states, this bill would create the legal requirement for businesses with less than 20 employees to offer insurance coverage for 18 months – longer in some specific cases – for terminated employees. As with COBRA, the employee is obligated to pay the premium.

Hearing of Interest This Week

  • Wednesday, January 25, 8:30 – Senate Business & Labor
    HB 142 Revise laws related to unemployment insurance theft and penalties – This bill closes a small loophole where people falsely claimed UI benefits, but did not do so in sworn statement, but with a fraudulent invoice. – monitoring

General Happenings at the Capitol

  • Although the 2023 Legislature started off in a sprint, it appears to be slowing considerably. It began with an unprecedented number of bills from the administration. These were all submitted early for drafting and appeared ready for hearing the first week. Although many of them were technical clean-up language, a good portion ended up being contentious. This created a rush to draft amendments, thus holding up work on other bills in the process.
  • Currently, there are only 99 non-appropriation hearings scheduled for next week, spread between 24 House and Senate standing committees. This doesn’t include Appropriations work in this calculation, as that committee is generally working on large budget packages, or the financial portion of bills already heard in a policy committee. The House has 36 new House bills that have not yet had a hearing scheduled and the Senate has 57, but 25 of these are the governor’s appointments to different boards which are relatively simple hearings.
  • NFIB expects that a number of draft proposals that are currently either “ready for delivery” or “in edit” will begin moving through the process a bit quicker next week. This slow time will be used by NFIB to visit legislators about small-business concerns that will be addressed in the bills they see in the upcoming weeks.

This link will take you to the list of bills NFIB is watching. It is an active link that will automatically update as information changes. Once a bill is drafted, you can click on the link to read the text. As the bill moves through the process, you can track its progress and even watch the recordings of the hearings through this page.

Previous Weekly Reports and Related Information

Photo snip courtesy of the Montana Legislature website



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