Bill aims to levy tourist tax on online reservation services

Montana had a 4% sales tax on hotel rooms and rental cars since the late 1980s, but the way people rent rooms and cars has changed a lot since then. A bill passed by the Montana legislature in 2021 seeks to bring this tax into the online age.

Senate Bill 52, sponsored by Sen. Jason Ellsworth, R-Hamilton, would expand the tax to also include bookings from third parties such as Expedia or Priceline.

The tax bill for the bill shows the change would add just over $ 3 million to a state special income fund over four years. According to the Montana Department of Commerce, the majority of that money goes to the Office of Tourism and Business Development.

Supporters like Billings Hotel owner Steve Wahrlich have said the bill will put online sellers on par with their traditional competitors. He joined the House Taxation Committee hearing on Tuesday via Zoom.

“It’s about time we got this right,” Wahrlich said.

He was joined by three other developers representing physical hotels and car rental companies.

The only registered opponent was Steve Shur, president of the Virginia-based Travel Technology Association lobby group. Shur has raised concerns over hitting the already struggling tourism industry with what he called a new tax.

“We need to work together to develop the travel and tourism industry, not tax it,” he said.

Ellsworth said his bill was not a new tax, but rather a modernization of the tax code. SB 52 passed the Senate on a 45-5 vote in February.

James Bradley is a reporter in the Legislative News Department at UM, 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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