Despite strong bipartisan support in the legislature, the governor vetoed HB 469 today. The bill would keep the tax rates for wireless phone companies at their current rate. The bill was necessary due to the Department of Revenue's intention to reclassify wireless property as centrally-assessed properties, thereby doubling the tax rates of these companies.
There are two negative consequences to the governor's veto. First, raising the taxes of the wireless companies will discourage development of new cell towers, especially in areas with spotty reception like Eastern Montana. Do we really need to raise taxes during a time of record tax collections?
The second consequence is that this veto signals the administration's intention of doing similar "reclassifications" on other businesses. In short, more businesses will see their taxes go up. This is not a result of legislative action, but crafty new legal theories cooked up by the DOR. The administration wants to bring more companies into the centrally-assessed category in order to raise taxes. So, any business with multiple locations around the state should be very worried about changes coming their way.
If the votes in the legislature stay the same, there are enough supporters to override the governor's veto. We hope those legislators who supported HB 469 will continue their support of consistent, predictable tax policy.
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