Montana House Bill HB946

Montana 2025 Regular Session

• Introduced: 3/31/25
• Refer: 3/31/25
• Failed: 5/20/25

Caption

Revise selective sales taxes to provide ongoing property tax relief

Summary

HB 946 would revise Montana’s lodging and rental car taxes to create a new source of funding for property tax relief on principal residences. The bill increases the lodging tax and rental car tax rates and directs the additional revenue into a state property tax assistance account. It provides a one-time temporary credit for tax year 2025 of up to $400, then establishes an ongoing property tax assistance program beginning in tax year 2026 for qualifying principal residences. Under the bill, taxpayers who own and occupy a qualifying principal residence could receive a credit applied to their property tax bill, with counties administering the credit after the Department of Revenue certifies eligible homes. The bill sets eligibility rules, including ownership and occupancy requirements, limits on entity-owned property, application deadlines, appeals procedures, and penalties for false claims. It also amends multiple statutes governing property tax notices, county tax appeal boards, mill levy calculations, lodging tax distributions, and statutory appropriations to integrate the new credit and funding mechanism into existing tax administration law.

Impact

HB 946 would significantly alter Montana tax law by redirecting a portion of lodging and rental car tax revenue away from existing uses and into a dedicated state property tax assistance account. It would amend the property tax notice and appeal statutes to require counties and the Department of Revenue to identify, certify, and credit qualifying principal residences, while also changing mill levy calculations so the new state-funded credits do not count against local levy limits. The bill also creates new administrative duties for the department and counties, establishes statutory appropriations for the assistance payments and administration, and adds enforcement provisions for fraudulent claims.

Sentiment

The bill appears to have had some support in committee, as reflected by the 19-2 vote on the motion to table, but it ultimately died in process. The overall framing of the bill is policy-driven and relief-oriented, aiming to provide ongoing property tax assistance to homeowners by using tourism-related tax revenue. The lack of recorded committee transcript makes it difficult to identify detailed arguments, but the vote suggests the proposal was at least seriously considered and had notable support before failing to advance.

Contention

The main points of contention are likely the tax increases themselves, the redirection of lodging and rental car tax revenue, and the scope and administration of the property tax credit. Potential concerns include whether the new revenue source is appropriate for funding homeowner relief, whether the Department of Revenue and counties can administer certification and appeals efficiently, and whether the eligibility rules fairly target principal residences while excluding entity-owned property. The bill also creates a coordination issue with Senate Bill No. 90, indicating that lawmakers were considering overlapping approaches to property tax relief and revenue allocation.