Bill would stop liquor-license transfers being delayed over sellers’ unpaid taxes, sponsor says

Senator Wiley Galt presented Senate Bill 241, which he said clarifies that the alcoholic beverage licensing system should not be used to collect a seller’s unpaid income taxes and should not block a buyer’s license transfer. Galt described a recent case in which a prospective buyer was required to address a seller’s back income taxes before the department would transfer a license; SB 241 would change the statute to permit department collection methods other than withholding the license transfer.

The Montana Tavern Association supported the bill. John Iverson told the committee that the licensing system’s purpose is to protect the public and should not be used as “a weapon to collect income tax.” Iverson said some prior department practice had created that risk and the bill would codify the department’s current approach so transfers are not slowed solely by outstanding tax filings.

Alcoholic Beverage Control Administrator Becky Schlau appeared as an informational witness and confirmed the department would no longer withhold approval of a license transfer because of a seller’s unpaid taxes. Instead, she said, the department can use warrant restraint and other collection tools. Committee members asked what types of taxes could be implicated; Schlau said the statute does not specify a type, so the provision would apply to any unpaid taxes. She also said transfers occur in the hundreds annually and enforcement practice was changed after the sponsor’s situation.

Sponsor’s request: Galt closed asking members for a do-pass recommendation; the transcript does not include a committee vote.