While Montana businesses are in favor of comprehensive reform, CI-121 is neither comprehensive nor a reform

By 
Todd O’Hair
Wednesday, May 18, 2022

The Montana Chamber of Commerce is the state’s largest business advocacy organization, representing small and large business from rural to urban communities. Improving Montana’s tax climate is part of our strategic plan, supported across the diversity of our membership. The Constitutional Initiative aimed at capping ONLY residential property taxes, also known as CI-121, shifts taxes onto main street businesses, natural resource industries and other job providing sectors. While Montana businesses are in favor of comprehensive reform, CI-121 is neither comprehensive nor is it reform.

Our current structure relies on three primary sources for revenue - income, property and natural resource related taxes. It is a system that is increasingly out of step with an economy that is becoming less reliant on physical property.

Our current tax structure suited Montana well in the 20th century, when bricks and mortar, massive equipment and facilities were the foundations for creating good paying jobs, economic success, and community viability.

Today, in the 21st century, our economy is shifting to more professional and service-related sectors. This shift is adding weight to the burden of businesses with bricks and mortar as they compete against companies not encumbered by a physical presence in Montana.

As our economy evolves, our current tax structure is expecting more and more from ALL property taxpayers. Traditional, heavy equipment, capital intensive industries, are increasingly at a competitive tax disadvantage with operations in other more diversified tax structure states.

If passed, CI-121 would shift the tax burden to business. Expect years of litigation and appeals on numerous fronts, creating confusion, chaos, and uncertainty across the state.

The Montana Chamber of Commerce supports comprehensive tax reform and is committed to being part of the solution. That task, however, requires thoughtful deliberation and analysis with all stakeholders. CI-121 has the potential to upend Montana’s recovering and growing economic business climate as it shifts the tax burden to businesses. If asked, we urge you to decline to sign the petition to approve CI-121 for the ballot this November.

Instead, work with us to create a solution that works for all Montanans.

Todd O’Hair is the President/CEO of the Montana Chamber of Commerce.

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