LFD shows sales-tax modeling tool and migration analysis for MARA; tool caps at 4% per state constitution

Legislative Fiscal Division staff demonstrated an interactive sales-tax model developed for MARA and committee use that projects potential state sales-tax collections under different tax bases and rates and separates estimated resident and nonresident contributions.

The model uses S&P Global estimates of personal consumption expenditures for Montana residents and University of Montana tourist-survey data to estimate nonresident spending. LFD staff said the tool produces three lines: total hypothetical collections, resident-paid collections and nonresident-paid collections. A technical note cautions that federal restrictions — for example purchases made with SNAP or WIC or certain health-care payments — mean the tool can overestimate collections if those federally funded purchases are not excluded.

Nut graf: the tool is meant as an analytical resource for lawmakers to test hypothetical tax bases and rates; the model is capped at 4 percent because a provision in the Montana constitution currently limits a general statewide sales tax to a maximum of 4 percent.

Body: LFD staff showed an example scenario: a 4 percent tax on food services and accommodations. The tool projected roughly $300 million in collections for fiscal 2025 under that scenario, and it displayed resident versus nonresident shares. Staff noted the model enables selection of many consumption categories and alternative tax rates (in 0.1 percentage-point increments) and said it is used to respond to legislator questions quickly. Separately, staff noted a migration analysis showing elevated in-migration in calendar 2020–2022 compared with historical norms and a MARA data set that can identify counties and origin states of new filers.

Ending: Staff said the sales-tax tool, technical documentation, and migration reports are available on the LFD interactive tools and MARA websites for legislators and the public.