Senate Tax Committee advances, tables multiple tax bills; votes and debate recorded

The Senate Tax Committee met to consider a package of tax bills and taken formal actions on a number of measures, including roll‑call votes, voice votes and motions to table. Committee members debated tax‑rate changes, targeted credits, transition fixes tied to the 2023 filing system and a large sales‑tax proposal; the committee approved some bills, amended and approved others, and tabled several measures for later consideration.

Key debate points included: the pace and targeting of income‑tax rate reductions (Senate Bill 323), fairness for taxpayers affected by the transition to the post‑2023 filing system (Senate Bill 544), how best to target credits for lower and middle incomes (Senate Bill 546 and related proposals), limits on a proposed K‑12 education expense tax credit to public‑school purchases (Senate Bill 549 as amended), and whether a large sales‑tax proposal should move forward now (Senate Bill 558). Broadband industry representatives also testified on the impact of the telecom classification bill (Senate Bill 550).

Votes at a glance

- Senate Bill 323 (income tax bracket reductions, phased): Motion to pass failed in a roll‑call vote (1 yes, 7 no). The committee then moved to table the bill. Outcome: tabled.

- Senate Bill 544 (transition adjustment for net operating losses after 2023 filing changes): Committee voted to do pass (voice vote/aye). Outcome: do pass.

- Senate Bill 546 (income‑tax credit phased by income decile; amendment considered): Committee adopted a technical amendment, debated whether the credit should be targeted, and ultimately the committee tabled the bill after a roll‑call (5 no, 3 yes). Outcome: tabled.

- Senate Bill 549 (tax credit for K‑12 educational expenses): Sponsor offered the bill with an amendment that removed private and home‑school provisions and left public‑school expenses only. The committee approved the amendment by voice vote and then voted to do pass the bill as amended (6 for, 2 against). Outcome: do pass as amended.

- Senate Bill 550 (telecommunications property classification): The bill would prevent centrally assessed classification for certain telecom property if it serves three or fewer counties; Broadband Montana testified about multiple small providers that could benefit. The committee approved the bill by voice vote (7 for, 1 against). Outcome: do pass.

- Senate Bill 558 (large sales‑tax restructuring proposal): The committee debated the bill’s scope and whether sales tax can replace property taxes for local bonding needs. Senator Dunwell moved to table; the table motion passed on roll call (7 yes). Outcome: tabled.

- House Bill 87 (taxation of Fish, Wildlife & Parks property / reimbursement mechanism change): Committee voted to concur/do pass by voice vote; Chair offered to carry the bill to the floor. Outcome: do concur.

- House Bill 154 (Housing Fairness income‑tax credit for property taxes paid and rent equivalent): Committee voted by roll call with a 4–4 tie; members then moved to table the bill. Outcome: tabled.

- House Bill 231 (homestead / comstead changes): Committee moved and voted to table to remove it from the status sheet. Outcome: tabled.

- House Bill 785 (manufactured/modular homes: alternative process to treat manufactured homes as improvements): Committee adopted an immediate‑effect amendment and voted to concur as amended by voice vote. Outcome: do concur as amended.

Selected debate and context

Senate Bill 323 drew sharp disagreement. The bill would have phased down upper brackets (first year from 5.9% to 5.4%, later to 4.9%) and increase the earned‑income tax credit from 10% to 15% of the federal credit. One senator said the proposal “pulls off too much money too fast at the top” and opposed it; another warned that repeated reductions risk making future changes difficult. Following a 1‑yes, 7‑no roll call, a motion to table the bill carried without objection.

Senate Bill 544 was described by staff as a narrow transition fix for taxpayers who lost net operating loss carryforwards in the transition to the post‑2023 filing system (SB 399 changes). The bill provides a defined seven‑year period for affected taxpayers to claim those losses, and the committee approved it on an aye voice vote after staff noted a fiscal note had been provided.

Senate Bill 546 included a sponsor amendment to phase a credit based on a low base rate that phases down by income decile. Committee members debated whether to implement the benefit through a credit embedded in the tax form (similar to EITC) or via marginal‑rate changes. After a voice vote on a technical amendment and heated discussion about targeting and complexity, a roll call produced 5 no and 3 yes and the bill was tabled.

Senate Bill 549 originally proposed credits for public, private/unaccredited and home‑school expenses. Committee amendment 001 removed the private and home‑school provisions and left credits for public‑school expenses (including purchases by public‑school teachers for supplies). The amendment passed on voice vote and the bill as amended passed on roll call 6–2.

On Senate Bill 550, Bridger Mahlum of Broadband Montana (spelled in transcript as M A H L U M) testified that his membership includes locally owned rural broadband providers and cooperatives; several providers serve three or fewer counties and currently qualify for class‑5 taxation, but others that span more counties had already planned to reclassify to take advantage of lower rates. Mahlum told the committee that while the issue is “niche,” it affects more than a single constituent and would not produce a large runaway fiscal impact. The committee approved the bill by voice vote.

Senate Bill 558, the larger sales‑tax bill, prompted debate about whether sales tax can replace property tax revenue that funds local services and bonds. One senator said the bill “needs a lot of work,” and Senator Dunwell moved to table; the table motion passed on roll call.

Process notes

Motions, roll calls and voice votes recorded in committee minutes are summarized above; where the committee used proxy votes, the transcript records those proxies (for example, “Senator McCain is aye by proxy”). Several bills that failed or faced constitutional or charter concerns (for example, potential effects on cities with mill caps such as Billings) were discussed but ultimately tabled to remove them from the status sheet.

Next steps

Committee members indicated intent to carry certain bills to the Senate floor (for example, House Bill 87 and House Bill 785) and to take some bills off the hearing schedule or let them “die a natural death” if sponsors requested. The committee scheduled additional hearings and indicated the possibility of working on Friday and Saturday to complete business.