Governor Brian Schweitzer signed a bill lowering business equipment taxes in Montana, despite raising his objections to the GOP-backed bill. On Friday’s Voices of Montana, the Governor told me that his proposal would have eliminated the tax for 17,000 Montana businesses- leaving out those businesses with much higher business equipment expenses.
Phil Drake has this piece over at The Montana Watchdog:
Gov. Brian Schweitzer on Friday signed a bill that reduces the business equipment tax but said it was a much weaker proposal than what he submitted and gave tax breaks to large out of state corporations.
However, the bill’s sponsor said what was approved was an example of good tax policy and said the governor’s proposal was unconstitutional in that it did not treat all businesses fairly.
Sen. Bruce Tutvedt (R Kalispell) responded with this:
“If we would have totally eliminated it it would have been an $80 million hit to the General Fund.”
The AP also reported this interesting tidbit:
It (the business equipment tax) would be reduced further if certain economic triggers are met, and estimates say it would ultimately cost the state about $23 million a year.
Speaking of triggers, the Governor made a very effective argument on behalf of his business equipment tax proposal during Friday’s show- basically saying the GOP only lowered the tax, while he would have repealed it for almost all of Montana businesses. The MT Chamber of Commerce’s Jon Bennion told me that- had the Governor not blocked a business equipment tax trigger back in 2005- the business equipment tax would already be gone.
Bennion wrote this blog post back in 2007:
In 2005, slim majorities in the legislature and Governor Schweitzer eliminated the above economic trigger. Therefore, the tax rate was frozen at 3% for any business with more than $20,000 in equipment valuation. Thousands of small businesses, manufactorers, farmers, ranchers, loggers and more are still paying taxes on their equipment while most of our surrounding states have no such tax.
But where would the tax rate be today if the trigger was not removed? Looking at the U.S. Bureau of Economic Analysis wage numbers for Montana for the past four years, it appears the tax rate would be 0% or heading towards 0% next year.