HELENA — Governor Greg Gianforte’s proposed budget, which he calls the “Montana Comeback Plan,” asks the Legislature to pass a series of tax cuts, including a cut to the top income tax bracket and several cuts to business taxes
One of those proposed cuts is in Senate Bill 184, which would eliminate capital gains tax for new businesses after 5 years.
Supporters said the bill would help bring more businesses to the state. Former Republican lawmaker Scott Sales spoke on behalf of the governor’s office at the bill’s hearing in the House Taxation Committee on Wednesday.
“If you want more economic expansion and development in the state, you need to lower the tax,” Sales said. “You get less of what you tax more and more of what you tax less.”
Sales was joined by five other proponents, including Bob Story of the Montana Taxpayers Association, which lobbies for lower taxes across the board. He said SB 184 was a good step toward eliminating the capital gains tax entirely, which he said would be a boon to Montana business owners.
“You pay for that business with taxable income to begin with. It may grow to a value greater than what you invested in it, but that’s one of the rewards of the risk you take as a business operator,” Story said.
Derek Ivester owns Mountain Fresh Italian Ice, a Bozeman-based Italian ice manufacturer that sells in three states. He said the bills would only help large corporations, not people like him.
“I am the small manufacturing business that politicians love to talk about and put in commercials, but these bills don’t help me,” Ivester said.
Three other opponents raised concerns about widening income inequality.
Rose Bender is a senior fiscal policy analyst at the Montana Budget and Policy Center, which lobbies against legislation it sees as benefiting only the wealthy.
“Senate Bill 184 would create a new tax loophole in Montana for businesses selling stock,” Bender said, “further rewarding wealth over work.”
The bill already passed the Senate on a 32-18 vote in February.
James Bradley is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation.
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