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Committee hears bill lowering threshold for required electronic tax payments to $50,000
Summary
Senate Bill 54 would lower the threshold requiring electronic tax payment from $500,000 to $50,000; the Department of Revenue said electronic payments improve security and reduce manual processing, while members raised questions about statutory 'must' language and exceptions by rule.
Senator Galt introduced Senate Bill 54 to the House Taxation Committee, saying the bill lowers the statutory threshold that requires taxpayers to remit state taxes by electronic funds transfer from $500,000 to $50,000 and authorizes administrative rulemaking for exceptions.
Kristen Gutowski, Information Management Bureau Chief for the Montana Department of Revenue, testified that the measure amends Title 15, Part 1, Section 802 to lower the threshold to $50,000 and that the department plans to adopt administrative rules specifying electronic formats and permissible exceptions. Gutowski described the state's TAP portal and said electronic options (eCheck, credit card for a small fee, wire, ACH) speed application of payments to taxpayer accounts and include validation and fraud protections.
Gutowski told the committee the department processes about "350,000 checks a year," and said at a $50,000 threshold the change would touch "less than 1%" of paper checks; she said substantially lower thresholds would affect a larger share of manual processing volume. Representative Durham asked how paper cashier's checks differ from electronic payments operationally; Gutowski responded that paper checks are manually handled many times, while electronic payments often require no manual touches.
Representative Weber questioned the bill's "must" language, noting it might appear to prohibit alternative payment methods. Gutowski said the department's legal opinion is that "must" is appropriate because the statute would also allow rules to define exceptions for taxpayers who cannot pay electronically.
Senator Galt closed by calling the measure a small step toward increasing electronic payments and asking the committee for a do-pass recommendation. No vote was taken at this hearing.
