Elinor Smith

HELENA (UM Legislative News Service) - The House Business and Labor Committee heard testimony Tuesday on a bill that would allow owners of gambling machines to report “negative income” and deduct it from their total earnings so they don’t pay the state’s 15% gambling tax when their machines pay out more in winnings than they earn.  

Rep. Tom Welch, R-Dillon, sponsored House Bill 297

“Currently, gaming machines are the only business that I am aware of that are not allowed to deduct their losses from their profits,” Welch said.  

According to the fiscal note attached to the bill, the change would reduce the state’s general fund income by about $400,000 a year.

There were four proponents of the bill, who said the current tax structure inadvertently makes Montana business owners pay more in taxes than they should. Shauna Helfert represented the Gaming Industry Association of Montana.

“Good tax policy should allow for deductions of losses just as any other business that receives losses as well,” Helfert said.  

According to the Montana Department of Justice there are gambling machines in every county and more than 16,000 gambling machines statewide. 

There were no opponents of the bill and the committee did not take immediate action on the bill.