SB90 Appears to Benefit Property Owners But May Devastate Rural and Tourist Economies
Senate Bill 90 Would Shift Lodging Facility Use Tax Income From Community Development and Tourism Promotion to Property Tax Relief
By Denise Rivette
On Monday afternoon, the hearing for SB90 is scheduled at 3:00 p.m. in Room 405 of the Montana State Capitol. Many groups representing tourism and rural communities are trying to raise awareness and spur the public to action to defeat this bill that would reallocate money from the Department of Commerce to property tax relief.
The Daily Montanan reports,
(Senate President Matt Regier, R-Kalispell) said that bill, to return some lodging and car rental tax to Montanans, makes sense for a couple of reasons.
For one, he said, some of the money goes toward advertising Montana, and the Department of Commerce wasn’t able to spend all the money it collected. Second, he said, it addresses a concern among many Montanans.
“I think there’s a big sentiment in Montana of, ‘Why are we spending millions of dollars to attract more people to move in and buy the house next door and raise your property taxes?’” Regier said.
If it passes, Senate Majority Leader Tom McGillvray, R-Billings, said it would give a credit of an estimated $400 to $500 to all homeowners.
In 2023, the Institute for Tourism and Recreation Research estimates that the average tax burden reduced on every Montana household by tourism amounted to $930. They reported that 69% of Montana residents “agree that the overall benefits of tourism outweigh the negative impacts.” 48,340 jobs are supported by tourism for a total of $1.5 Billion in direct employee compensation. Approximately 12.5 million visitors spent $5.45 Billion in Montana in 2023.
The Lodging Facility Use Tax is 4% of room charges, and revenues are distributed to a variety of state funds, with a majority going to the General Fund. Sherry Weamer, Executive Director of the Red Lodge Area Chamber of Commerce, is concerned about losing many programs the area relies on such as Made in Montana Marketing and the Montana Main Street Program, which invests in community revitalization and economic development in towns across Montana. Not to mention the plethora of grants and services the Department of Commerce also provides with their small portion of the tax. “Why would the legislature take away from a fund that receives less than 4% of the tax and directly serves communities rather than from the General Fund that receives 75%?” Weamer asked.
Because the General Fund surplus was so large, according to the State’s website, “Governor Greg Gianforte in 2022 proposed a property tax rebate for Montanans for their primary residence and signed it into law in March 2023. The rebate provides Montanans up to $675 of property tax relief on a primary residence in both 2023 and 2024.”
According to Montana Legislative Fiscal Division publication Accommodations Taxes, 75% of Lodging Sales Taxes collected go into the General Fund while 25% goes to the Montana Heritage and Historic Preservation Fund. From that fund a fund called State Special Revenues receives 6% of the taxes. After the State reimburses the General Fund for some of its own lodging expenditures, the Department of Commerce receives 68.5% of the remaining State Special Revenues (estimated at approximately 3.78% of the total Montana Lodging Sales Tax). Those funds are used to promote community development and tourism. Below are diagrams from the publication showing how the funds are allocated.
Yesterday, the Red Lodge Area Chamber of Commerce put out a call to action presented in its entirety below (contact information for legislators added):
SB 90: A Critical Challenge for Montana's Tourism Industry
We're reaching out with important information about Senate Bill 90 (SB90), a proposal that could significantly affect Montana's tourism industry and the communities it supports. Below are key details about the bill and its potential impact on our state.
The Montana Legislature is considering SB90, a bill that proposes redirecting funds from the Lodging Facility Use Tax (LFUT)—a critical revenue source for Montana’s visitor economy. (This is also commonly referred to as the Bed Tax.) If passed, this bill will eliminate essential programs that drive economic growth, preserve Montana’s unique culture, and support businesses and communities statewide.
The hearing for SB90 is scheduled for Monday, January 20, 2025, at 3:00 p.m. in Room 405 of the Montana State Capitol. It’s crucial for stakeholders to attend and make their voices heard.
What’s at Stake?
If SB90 becomes law, the following programs and initiatives funded by the lodging facility use tax will be eliminated:
Made in Montana Marketing: Promotes Montana-made products, supporting local artisans and businesses.
Rural Tourism Development: Enhances tourism opportunities in rural, under-visited communities.
Montana Film Office: Attracts film productions, creating jobs and increasing the state’s visibility.
Tourism Industry Research: Provides vital data to guide decisions that sustain the visitor economy.
Montana Main Street Program: Invests in community revitalization and economic development in towns across Montana.
Japan and Taiwan Trade Offices: Promote Montana products and tourism internationally.
Tribal Economic Development Programs: Support tourism and small business growth in tribal communities.
Pilot Community Readiness Grants: Help communities like Big Timber, Blackfeet Tribe, and Havre prepare for sustainable tourism growth.
Agritourism Grants: Promote agricultural tourism across Montana, linking visitors to Montana’s farming and ranching heritage.
Event and Emergency Services Grants: Support events that drive visitation and tourism-related emergency services.
Tribal Tourism Grants: Assist tribal communities in developing and marketing tourism initiatives.
Big Sky Film Grants: Support Montana-based film projects, boosting local economies.
Montana Heritage Commission: Preserves historic sites that draw visitors and educate about Montana’s heritage.
Institute of Tourism and Recreation Research: Provides critical data for planning and marketing efforts.
The economic ripple effect from cutting these programs would devastate local businesses, reduce job opportunities, and weaken communities. Programs like these don’t just serve the tourism industry—they enhance the quality of life for all Montanans by fostering vibrant, sustainable communities.
Why It Matters
The lodging facility use tax directly drives growth in the visitor economy, which in turn generates lodging sales tax revenue for the General Fund. Eliminating these programs will lead to fewer visitors, lower spending, and decreased revenue for both taxes. Montana’s economy—and the funding available for public services—depends on maintaining a thriving visitor economy.
How to Take Action
1. Attend the Hearing (In-person or by Zoom)
Make your voice heard at the hearing on Monday, January 20, 2025, at 3:00 p.m. in Room 405 of the Montana State Capitol. If you can’t attend in person, register to testify via Zoom by visiting legmt.gov/participate.
2. Contact Lawmakers
Call or email members of the Senate Local Government Committee and your legislators. Share how this bill would harm you, your business, or your community. Ask them to vote NO on SB90.
Local Government Committee: Monday,Wednesday and Friday at 3:00 p.m. in Room 405
Senate Local Government Committee
Mandeville, Forrest (Chair) (R)
Address: PO BOX 337, COLUMBUS, MT 59019-0337
Primary phone: (406) 690-1933
Email: Forrest.Mandeville@legmt.gov
Beard, Becky (VCh) (R)
Address: PO BOX 85, ELLISTON, MT 59728-0085
Primary phone: (406) 479-3048
Secondary phone: (406) 479-3048Email: Becky.Beard@legmt.gov
Webber, Susan (VCh) (D)
Address: PO BOX 1011, BROWNING, MT 59417-1011
Primary phone: (406) 450-1894
Secondary phone: (406) 338-2159Email: Susan.Webber@legmt.gov
Bogner, Kenneth (R)
Address: 1017 PLEASANT ST, MILES CITY, MT 59301-3414
Primary phone: (406) 916-9690
Email: Kenneth.Bogner@legmt.gov
Boldman, Ellie (D)
Address: 1125 HELEN AVE, MISSOULA, MT 59801-4423
Primary phone: (406) 218-9608
Email: Ellie.Boldman@legmt.gov
Ellsworth, Jason (R)
Address: 1073 GOLF COURSE RD, HAMILTON, MT 59840-9230
Primary phone: (406) 360-0009
Email: Jason.Ellsworth@legmt.gov
Fern, David (D)
Address: PO BOX 4151, WHITEFISH, MT 59937-4151
Primary phone: (406) 212-0674
Email: Dave.Fern@legmt.gov
Hertz, Greg (R)
Address: PO BOX 1747, POLSON, MT 59860-1747
Primary phone: (406) 253-9505
Email: Greg.Hertz@legmt.gov
Lammers, Gayle (R)
Address: 137 S HEIMAT RD
HARDIN, MT 59034Primary phone: (406) 679-0020
Email: Gayle.Lammers@legmt.gov
Pope, Christopher (D)
Address: PO BOX 6546, BOZEMAN, MT 59771-6546
Primary phone: (406) 581-8739
Email: Christopher.Pope@legmt.gov
Trebas, Jeremy (R)
Address: PO BOX 2364, GREAT FALLS, MT 59403-2364
Primary phone: (406) 899-5445
Email: Jeremy.Trebas@legmt.gov
3. Prepare Testimony
If you want to testify but need help crafting your story, visit tourismmattersmt.org/preparing-testimony for guidance.
Why You Should Speak Up
Eliminating programs funded by the lodging facility use tax will:
Harm local businesses that rely on tourism-driven revenue.
Reduce funding for community revitalization, emergency services, and cultural preservation.
Undermine the General Fund by decreasing visitor spending and tax revenue.
By advocating against SB90, you are supporting the growth and sustainability of Montana’s economy, businesses, and communities. Your voice matters—act now to protect Montana’s future.
The Montana Travel Association Provides Context and Facts in Their Publication: Tourism, Taxes, and the Treasure State: The Case for the Bed Tax
Estimates of Tourism Contributions to Local Economies
The following is information from a study done by Kara Grau in 2024 entitled Montana Travel Regions & Counties - Economic Contribution of 2022/2023 Averaged Nonresident Travel Spending and published by the Institute for Tourism and Recreation Research, University of Montana - Missoula. Below are reproduced pages specific to Carbon, Park and Gallatin Counties as well as one for Yellowstone Country, the tourism district that includes Gallatin, Park, Sweet Grass, Stillwater and Carbon Counties.
Tourism and its promotion are vital to the economy of many communities in Montana. Overpopulation, too many people moving in and property tax issues are another matter. Conflating the two is just an attempt to rob Peter to pay Paul.