Renters, businesses left out of final tax credit package

By WALT WILLIAMS Chronicle Staff Writer

HELENA - Homeowners across Montana will receive $400 checks from the state government in the near future, but renters and business owners won't see any tax breaks.

The 2007 Legislature adjourned its special session Tuesday without reaching an agreement on property tax relief, a top priority for both parties this year.

Lawmakers did manage to pass a bill giving homeowners one-time $400 tax rebates coupled with some income tax credits, but a proposed $120 tax credit for renters and an effort to expand the number of companies that don't need to pay business equipment taxes died in last-minute political maneuvering.

Neither party was happy with the final result.

“When I look at this whole thing, I see this will absolutely do nothing for anyone's property tax bills across the state,” Sen. Roy Brown, R-Billings, said on the Senate floor.

Both parties had pledged property tax breaks before the Legislature began, but differed on the details.

Republicans wanted what they said were permanent tax cuts for all property owners.

Democrats, on the other hand, promised a one-time $400 tax rebate for homeowners. They also were willing to expand the business-equipment tax exemption if the lost revenue was replaced with the new money generated by cracking down on alleged out-of-state tax cheats.

Renters were left out of the mix at first, but were later slated to receive a yearly $120 income tax credit.

After lawmakers failed to reach an agreement on tax relief during the regular session, the governor's office and several House Republicans reached what was touted as a compromise bill, House Bill 5, which combined the rebates, renter tax relief and authority to go after the alleged tax cheats. Those talks didn't include House Speaker Scott Sales, R-Bozeman, or many of the party's more conservative lawmakers.

House Republicans Monday killed HB 5 and came back with two of their own bills -- HB 9 and 10 -- which stripped everything out except the rebate, some income tax credits for homeowners and the business-equipment tax exemption.

Senate Democrats tried to resurrect HB 5 Tuesday morning in a bill of their own, voting it out of committee and attempting to bring it to the Senate floor.

One Senate Republican accused Democrats of trying to make a statement with its bill, to which Sen. Sam Kitzenberg, D-Glasgow, replied that, yes, they were.

“The statement is renters are important, too,” he said.

But it was futile because the House had already adjourned, leaving the Senate to either pass the two Republican bills or finish without approving any tax breaks.

Kitzenberg said some people need the rebate, so he and other lawmakers voted 32-15 to pass HB 9 out of the Senate and onto becoming law.

However, they didn't accept the Republicans' business-equipment tax exemption in HB 10, arguing that the bill didn't include language to allow the state to pursue alleged out-of-state tax cheats.

The Senate Taxation Committee tabled HB 10 on a party-line 6-5 vote, with Republicans voting for it.

The committee also killed two bills by not taking action on them. HB 7 by Rep. Roger Koopman, R-Bozeman, would have required future state budget surpluses to be returned to taxpayers in property tax breaks and income tax credits, while HB 8 would have phased out the business equipment tax altogether.

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