Appropriations committee advances Social Security tax change, updates licensing fees; several tax bills tabled

The House Appropriations Committee on Tuesday advanced House Bill 8-27, a revision to Social Security income taxation, and approved higher licensing fees for food and lodging establishments, while tabling several proposed tax changes that drew fiscal concern.

The committee voted to recommend a do-pass for HB 8-27 (Social Security income taxation) and passed HB 8-53 (updated licensing fees for local public-health inspections). Several other measures received full hearings but were either tabled for further work (including a child tax credit and a proposal to average property appraisals) or not acted on pending additional fiscal detail (the business equipment tax exemption bill and amended vape tax language).

Why it matters: Several proposals considered affect large numbers of Montana taxpayers and local government revenues. The Social Security income tax revision drew sustained discussion and a recorded roll-call recommendation; the licensing-fee bill is intended to restore funding used by local health jurisdictions for inspections; property-tax and business-equipment proposals could shift significant revenue burdens between property classes and the state general fund.

What the committee acted on

- Social Security income taxation (HB 8-27): Representative Melody Cunningham, sponsor, summarized the bill as a narrower alternative to proposals that would fully exempt Social Security income. "The idea for this bill came from knocking on doors and we all heard about property taxes from my retirees," Cunningham said during her presentation. The committee voted to recommend the bill (do‑pass); the committee recorded a final recommendation vote of 17 in favor and 6 opposed.

- Licensing fees for establishments (HB 8-53): Representative George Nicolo Cakos presented the bill to raise and reclassify certain licensing fees for food establishments, public accommodations, campgrounds, pools and spas. Cakos told the committee the bill "brings approximately $1,300,000 in revenue, with local health jurisdictions receiving approximately 85 to 90% of that." The committee approved the bill by roll call (final committee tally recorded as 21 yes, 2 no).

Procedural referrals

- House Bill 9-29 (chiropractic practitioner statute cleanups) and HB 9-20 (property-tax exemption for nonprofit senior care facilities/housing) arrived at the committee with small fiscal notes and were handled procedurally: brief sponsor introductions followed by unanimous (by those present) committee passage to allow the bills to proceed to the floor.

Items heard but tabled or deferred

- Child tax credit (HB 9-42): Representative Pete Elverum presented a $1,000 credit per child under age 6 with a phaseout keyed to filing status and income. After questions and debate about overlap with other child-credit proposals, the committee voted to table HB 9-42 (the motion to table carried on roll call).

- Property appraisal averaging (HB 8-94): Representative Essman proposed using a 10-year "Olympic average" of appraised values (dropping the high and low) to smooth property-taxable values for residential and commercial real property. The proposal generated detailed discussion about short-term fiscal impacts and effects on city, county and school budgets. The committee vote to advance the bill failed on a roll call and the bill was tabled for further work.

- Business equipment exemption (HB 8-44): Representative Mike Vinton sought to raise the de minimis exemption for business personal property (business equipment) from the existing level to reduce tax burdens on equipment-intensive businesses. Witnesses — including Rose Bender of the Montana Budget & Policy Center and Jared Isom of the Department of Revenue — debated distributional effects. The committee did not act on final passage pending additional departmental analysis and an updated fiscal note.

- Vape / alternative nicotine tax (HB 9-10): Representative Mary Cafaro presented a proposed excise tax on alternative nicotine products aimed at reducing youth use. Cafaro described an amended wholesale-based tax set at 20% (the fiscal note had been modeled at 50% using Utah as a benchmark). Proponents from the vape retail industry supported the reduced 20% rate and asked for a statutory definition separating "alternative nicotine products" from tobacco products; opponents including convenience-store and petroleum-marketer representatives warned that untaxed, illicit imports and disposable products could avoid the wholesale-based tax. The committee heard detailed revenue modeling and enforcement questions; no final committee action was taken.

Votes at a glance

- HB 8-27 (revise Social Security income taxation): Committee recommendation: Do pass; committee tally 17 yes, 6 no. - HB 9-29 (chiropractic practitioner statute cleanup): Procedural pass (unanimous among members present) to return to the floor for final action; fiscal note approximately $20,000 (sponsor said funds available in a special revenue account). - HB 9-20 (property-tax exemption for nonprofit senior-care housing): Procedural pass (unanimous among members present); fiscal note shown as a one‑time $20,000 Department of Revenue contract cost (per sponsor testimony). - HB 8-53 (fees for licensed establishments): Committee recommendation: Do pass; roll-call tally recorded as 21 yes, 2 no. - HB 9-42 (child tax credit, $1,000 per child under age 6 with phaseout): Motion to table carried (committee tabled the bill for further consideration). - HB 8-94 (10‑year Olympic appraisal average): The committee did not advance the bill on the roll-call vote and subsequently tabled it for further work.

What to expect next

Bills that received committee do-pass recommendations will be scheduled for floor consideration. Several bills were tabled for revisions or await more complete fiscal analysis from the Department of Revenue; sponsors said they intend to continue negotiations and to bring amended language or additional fiscal detail back to the committee or to the floor.

Meeting context and process notes

Chairman Jones opened and ran the committee. Multiple sponsors noted that a handful of bills were referred to Appropriations after initial referrals and that several small‑fiscal‑note bills were handled on a short procedural hearing before being referred back to the floor. Department of Revenue staff and local public‑health officials provided fiscal and operational details on multiple bills. Several members requested additional county‑and‑industry‑level segmentation from the Department of Revenue for the business equipment exemption bill.

Ending: The committee recessed and planned further hearings and executive action the following day, with members noting deadlines and continuing negotiations on several revenue measures.