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Bill would require electronic payment of state taxes for liabilities $50,000 or greater, department says
Summary
Senate Bill 54 would lower the electronic-funds-transfer threshold requiring taxpayers to pay state taxes electronically from $500,000 to $50,000; Department of Revenue witnesses said the change streamlines processing and preserves rule-based exceptions.
Senator Galt introduced Senate Bill 54 to the House Taxation Committee, saying the bill lowers the statutory threshold that triggers required electronic funds transfer (EFT) for state tax payments.
"This is pretty simple," Senator Galt said. "It just raises the limit that you are required to do an electronic payment for 500,000 down to 50,000." (Senator identified the existing higher threshold and the proposed $50,000 threshold.)
Kristen Gutowski, information management bureau chief at the Montana Department of Revenue, testified in support and explained administrative benefits: electronic payments carry validation and fraud protections, are applied to taxpayer accounts faster, and require substantially fewer manual touchpoints than paper checks. "An electronic payment, we may touch 0 times, or if we need to resolve that, we may touch that 1 time," Gutowski said, contrasting that with paper checks which the department may touch multiple times.
Gutowski told the committee the bill also permits the department to adopt administrative rules that provide alternate payment methods for taxpayers who cannot make electronic payments, and the department's legal view is that a "must" requirement in statute can coexist with rule-defined exceptions. Committee members asked whether the statutory wording should use "must" or softer language such as "may" or "shall"; Gutowski said the department's legal opinion supported retaining the statutory requirement because exceptions will be provided in rule.
Committee members also discussed the practical reach of the proposal: Gutowski said lowering the threshold to $50,000 would affect less than 1% of the department's paper checks, and that roughly 80% of payments are already electronic.
The committee did not take executive action during this hearing.
