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House Taxation Committee advances HB 440, a pilot tax incentive for Montana-produced food, 18–3
Summary
The committee voted 18–3 to advance House Bill 440, a pilot program offering tax subtractions for income from sales of Montana-produced food; supporters described it as a voluntary honor-system pilot and staff warned of potential auditing costs to the Department of Revenue.
During executive action the committee moved House Bill 440 'do pass.' The mover opened with the short title: an act providing tax incentives for the sale of Montana-produced food, including an individual and corporate income tax subtraction for income from those sales, with amended sections and delayed effective dates.
A sponsoring representative explained the program design: grocers would report sales of Montana-produced products to claim a 50% subtraction on income tax; the program is voluntary for grocers and wholesalers do not receive the benefit. The sponsor described the reporting approach as an "honor system" that requires grocers to certify products as Montana-produced and acknowledged it may be administratively onerous for grocers.
The sponsor said program auditing would fall to the Department of Revenue; the fiscal note anticipates the agency would need additional FTEs to audit compliance to prevent fraud. Chair Fielder noted a fiscal projection of about $1.5 million in later years that the fiscal note estimated if many businesses participate. Representative Nicola Caucous said she planned to support the committee motion but suggested adding a four-year sunset to ensure a formal review after a pilot period.
The committee took a roll-call vote and reported 18 ayes and 3 noes; the chair declared House Bill 440 passed the Taxation Committee 18–3. The chair then adjourned the committee until 9:00 the next morning.
