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Lawmakers consider local-option sales tax

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BOZEMAN, Mont. - Lobbyists in Helena are pushing a local-option sales tax, and it could mean big changes for towns large and small.

State law currently allows a resort sales tax if the town's population is under 5,500. Larger communities have seen the benefits, and now they want an option too.

We dug into bill drafts currently in the works and found you could pay more for hotels, restaurants and bars. Essential goods like groceries and clothing would be exempt.

Bozeman City Commissioner Chris Mehl is already evaluating the possibilities. "Things that you buy normally from the Costco or Albertson's will not be taxed," says Mehl. "If we do it this way, (Bozeman) will probably raise between $14 million and $25 million a year."

Mehl sees the local option as a tax burden, shared by the 4 million visitors who come to Bozeman every year.

We went through one of the bills line by line and found a sales tax not exceeding 4 percent. To get the money local governments would have to outline how it would be used, and residents would have to approve it at the ballot box. In addition, the local option must provide property tax relief. When the spending needs were met, residents would have the opportunity to opt out.

Even with increase of property taxes in the last few years, Jennifer Perry says she doesn't think her current taxes are too high. She sees the benefit of a local-option sales tax but is on the fence about it.

"I see the downfall of it in that we would pay more for the things that we use and enjoy everyday," she said.

Mehl hopes the revenue could be used for infrastructure needs like road repairs or even a new Law and Justice Center.

The local-option sales tax will be up to legislators to decide -- and possibly up to voters.

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Mehl says if the legislation passes he expects the tax to be 3 percent. State law caps any sales tax at 4 percent.

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