Gianforte capital gains tax proposal fails, is promptly revived

The state House moved Thursday to reconsider one of Gov. Greg Gianforte’s tax cut plans after a surprise contingent of Republicans voted down the bill on the floor, with at least one member of the GOP saying they feared the bill would “entice” large marijuana companies from out of state to come into Montana as adult-use cannabis is implemented here.

Senate Bill 184, which would create an exemption from capital gains taxes on income from the sale of stock in certain Montana companies, failed on second reading on a 49-51 vote. It’s one of several tax plans from the governor that he says will attract businesses and jobs to the state under a trickle-down logic. The bill passed through the Senate on largely partisan lines.

Exactly why several House Republicans joined Democrats in voting down the tax plan isn’t entirely clear. One of the Republicans who opposed the bill, Rep. Barry Usher, R-Billings, said on the floor that he believed the bill would provide a tax incentive for out-of-state pot companies who plan to come in to take advantage of Montana’s nascent recreational marijuana market.

“I’m not sure we want to bring out of state marijuana companies here to Montana,” said Rep. Barry Usher, R-Billings.

Rep. Becky Beard, R-Elliston, who is carrying the bill in the House on behalf of Senate President Mark Blasdel, said she wasn’t anticipating the result on the floor Thursday.

She told Usher that any corporation that meets the requirements for the tax exemption would be eligible, whether they’re in the marijuana sector or not.

“We are enticing corporations to move their operations to the state of Montana for job growth,” she said. 

Beard said that she expects amendments to the bill in order to get it passed out of the House, perhaps something concerning the size of Montana companies eligible for the tax exemption, though she couldn’t say for sure. A majority of lawmakers in the body voted to put the bill back on the second reading calendar on Friday, giving it a new lease on life.

Gianforte said in a press conference Thursday that his office would be working with the Legislature to shepherd the bill through.

Rep. Mike Hopkins, R-Missoula, who is carrying the fledgling bill to implement the ballot initiative that legalized recreational marijuana, said he believed that marijuana companies would be coming into the state regardless of the capital gains tax environment, and that he wasn’t sure if concerns about the industry were actually the root cause of Republican opposition to the tax plan.