Missoula mayor pushes for local option sales tax


MISSOULA, Mont. - Missoula could see a sales tax if Mayor John Engen has his way.

Some Montana Democrats, including Engen, think there's a good chance Montana's sales tax law could be changed to apply to larger cities. That's why they're pushing for it in the upcoming legislative session.

Montana law only allows for the use of a specific local option sales tax. It's a resort tax collected in Montana communities with populations under 5,500 that meet certain resort qualifications.

A push to let cities with larger populations decide whether to approve a sales tax died in the 2009 legislature.

Missoula's mayor argues a sales tax could help reduce property taxes.

Montana's new house speaker is quoted as saying he's not sure the GOP caucus will support a push to change the law.

Visitors who stop by Missoula will typically grab a drink and a meal. It's a tax-free experience, but that's what Engen wants to change. He says a local sales tax option would benefit the Missoula community.

"We think it would be a huge advantage; we think this would be millions of dollars a year to Missoula, and in turn we like to think that we limit our need to raise property taxes and we also give back to property taxpayers," said Engen.

The mayor's plan would be to limit the tax to luxury items. While that lists of items isn't concrete the mayor did give some examples. "From taxes on hotel rooms, taxes on liquor by the glass and restaurant meals," said Engen.

Some local businesses selling these luxury items don't agree. The Laughing Grizzly's general manager, Stacey Rossignoli, said a sales tax wouldn't be good for business.

"Putting a sales tax on any kind of luxury industry that we have here would really hurt a business," said Rossignoli.

NBC Montana talked to a handful of bars and restaurants in downtown Missoula. Some of them didn't want to comment because they had never heard of the local sales tax option and the ones that did, didn't like the sound of it. Businesses said a tax would deter customers from walking through their doors.

"If you were to take away the incentive for people to go out and eat, drink and have fun, with them knowing they have to pay on top of that, I think it would even drop sales even more," said Rossignoli.

The mayor maintains a Missoula sales tax would reduce the burden on property owners and put some expenses on tourists.

"Folks who are taking full advantage of what we have to offer without paying their fair share get to pay their fair share, or at least some portion of their fair share," said Engen.

Depending on what the legislature allows and then what voters decide, visitors could pay a little more for that beer or sandwich while dropping by Missoula.

Engen said the money collected through the sales tax would go towards infrastructure projects and maintaining the roads.

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