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Bill would let buyers take liquor-license paperwork while seller resolves tax debt, sponsors say
Summary
Senate Bill 241 would let the Department of Revenue transfer liquor-license paperwork to buyers while the seller's unpaid taxes are collected, sponsors say the change reduces delays that prevent buyers from opening new businesses; department officials said the agency already follows the practice and the bill would codify it.
HELENA — The Senate Business and Labor Committee heard Senate Bill 241 on Wednesday, a bill sponsored by Sen. Wiley Galt that would streamline transfers of retail liquor licenses when sellers owe unpaid taxes.
Galt, R-Central Montana, said current practice can force buyers to wait months for transfers while sellers' unpaid taxes prevent the Department of Revenue from completing paperwork. He described a personal example in which a liquor license transfer took months and left the buyer operating under a temporary license.
John Iverson, representing the Montana Tavern Association, supported the bill and told the committee the alcohol code's purpose "is to protect the public. It is not to be used as leverage to collect income taxes." He said withholding transfers can prevent sales that would allow sellers to pay taxes.
Shauna Helfert of the Gaming Industry Association and Matt Leo of the Montana Brewers Association also supported the bill, saying it reduces uncertainty for buyers and helps small businesses open sooner.
Becky Schlauch, alcoholic beverage control administrator at the Department of Revenue, testified as an informational witness that the department has already changed practice to allow transfer while tax liabilities are resolved and that the bill would codify current administrative practice. Schlauch said tax status is confidential and the department cannot share a seller's tax records with a buyer, which complicates preclosing negotiations, and that temporary operating authority is available to let buyers operate while a transfer is processed.
Committee members asked technical questions about nonuse rules, seasonal operations and how long a license can be dormant without forfeiture. Schlauch said operators must notify the department after 90 days of nonuse; nonuse may be extended up to a year or longer for extenuating circumstances.
The hearing concluded with no recorded committee vote. Proponents urged the committee to give the bill a "due pass."
