Income, property, business equipment, capital gains, included in deal
State Director Ronda Wiggers reports from Helena on the small-business agenda for the legislative and political week ending February 3
Tax Package Passes
One can assume that the “tax deal” is pretty much set for the 68th session. After the House Tax Committee tabled one of the portions of Gov. Greg Gianforte’s tax package, he went to the media to call foul. Leadership, both those elected to the position and those that control many votes, quickly convened. The deal was cut.
House Tax pulled HB 222, the property tax rebate, from the table, cut it in half, and passed it out of committee. In a rarely seen move, once the bills passed out of the Tax Committee, they were quickly re-referred to House Appropriations without a floor vote.
In Appropriations, they were all amended to tie them all together with a contingent voidness clause. If anyone of the package dies, they all either die or are substantially cut. The Democrats attempted to remove this clause from each bill on the House floor and failed. The House passed the package on a party line vote.
Thus, the outcome appears that:
- HB 192 will provide all Montana residents with an income tax rebate of the lesser of what you paid in 2021 or $1,250 per person prior to the end of 2023.
- The business equipment tax exemption in HB 212 will increase from the current $300,000 to $1 million.
- HB 222 provides for a $500 property tax rebate to those Montana residents that lived in their homes at least six months of 2022. The Department of Revenue will notify all property owners of the potential rebate by June 30, 2023. The resident will file a claim prior to October 1, 2023, and eligible recipients will receive the lesser of what they paid in property taxes or $500. This will happen again in 2024 for taxes paid in 2023.
- HB 251 will provide about $143 million to buy down state debt.
- Although HB 221 appears to revise the tax rate on long term capitol gains, it truly just removes a complicated formula and inserts a percentage rate that is equal.
This interconnectivity was created to avoid factions of the Republican Party from only supporting their preferred portions of the package in hopes of getting larger refund amounts or leveraging their support for other bills. The result is that this package is pretty much a signed deal.
The income tax reduction bill, SB 212, is standing on its own. However, it has broad support.
The Week in Review
On Thursday (February 2), the House Business & Labor Committee heard HB 201, a revision of the minimum wage laws, which proposes to increase the Montana minimum wage to $11.39 per hour and eliminate the $4 minimum wage for businesses that gross less than $110,000 per year. NFIB opposed this bill, and, although the committee has not yet taken official action, I believe it will be tabled.
The Senate Business & Labor Committee heard SB 216, a revision of laws related to litigation and products – a tort reform bill being brought forward, that among other things, attempts to protect retailers from product liability if they did not alter, assemble or manufacture the product and had no way of knowing there could be a defect or unsafe condition. NFIB testified in favor of this bill.
Bills NFIB is Monitoring
- HB 161 to generally revise computer crimes.
This bill adds substantial language to the crime of unlawful use of a computer to update the statute. It passed the House on a final vote of 74–25 and is now headed to the Senate to continue its journey through the process. It has been assigned to the Senate Judiciary Committee, but no hearing date is scheduled.
- HB 389 would create a mini-COBRA law for small employer health insurance plans.|
As the title states, this creates the 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. This has been assigned to the House Business & Labor Committee, where it passed last session, but no hearing date has been set.
- SB 22 would revise independent contractor laws.
NFIB offered support for the amendments to this bill. The intent is to clarify that if a business did all the right things to determine that they were hiring an IC to do work, and that IC expired for some reason, the business would not be liable for employment taxes and workers’ compensation. This has proven a bit more difficult to draft than expected. Although heard in the Senate Business & Labor Committee on January 19, the committee has taken no official action.
- SB 24 would require corporations to file electronic income tax returns.
It has passed the Senate with some of the amendments requested by NFIB and the CPA’s. We will continue to work on details during its’ House hearings.
- SB 95 would generally revise theft laws that address theft and bad checks.
It was heard in the Senate Finance & Claims Committee, but it did not act on it. Corrections added a pretty hefty fiscal note to prosecute and offer public defenders. NFIB argued that either we go back to the previous law and the state pays for prosecuting theft or small businesses, and in turn, their customers, pay for the theft. One method should decrease the amount of petty theft and bad checks, the other encourages the behavior. The committee chairman has indicated that a vote will be taken on this on Tuesday (February 7).
- SB 146 a proposed revision to laws relating to wage transparency.
It was tabled in the Senate Business & Labor Committee. - SB 267 would revise laws related to State Fund and government agencies.
This bill is intended to improve State Fund customer service and increase efficiencies by removing the requirement that they use the state’s IT department and state software and removing them from the state procurement process. State Fund had recently discussed the option of becoming a policy holder-owned mutual insurance company. SB 267 is a step short of that big jump. It has been assigned to the Senate Business & Labor Committee but does not have a hearing date.
- SB 270 would 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. It was assigned to the Senate Business & Labor Committee, but has no hearing date scheduled.
- LC 172 would 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 who 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 who are stealing will simply create numerous fake business names to keep all of them under $20,000 in sales. This issue has been addressed with federal legislation that was signed by the president in December. Rules have not been promulgated, so we do not yet know what this will require of small business owners. We will suggest to the sponsor that he may want to wait on the federal regulations prior to creating special law in Montana.
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
- January 13—UI Theft and Penalties Bill Passes House
- January 4—Small Business Day in Helena, January 18
Photo snip courtesy of the Montana Public Affairs Network
