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Government entities would likely not be exempt from city gas tax

Government entities would likely not be exempt from city gas tax

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Would the county be taxing itself?

One question that’s come up about the local option gas tax is whether government agencies are exempt from paying it. The question came up at a meeting last week with city and county officials, and it’s arisen in the minds of some members of the public, too.

“I think you’re getting hit more than once,” said Tom Martin, a Missoula resident who doesn’t like the potential that government would be “double dipping.”

City councilors are asking county commissioners to place a 2-cent-a-gallon fuel tax on the ballot; It’d be just for gas and not diesel. A local option motor tax hasn’t been adopted anywhere else in Montana, and city and county officials haven’t embarked on legally researching the question about exemptions.

For one thing, City Attorney Jim Nugent said the commissioners don’t seem warm to the idea anyway. Commissioner Jean Curtiss, though, has said the county will hold public hearings.

According to the Montana Department of Transportation, exemptions aren’t part of the deal at the pump. That’s from a read of Montana Code Annotated 15-70-204, agency public information officer Lori Ryan said in an email.

“There is no provision in the law for exemption of the gas tax to any governmental entities,” Ryan said.

The local option fuel law, MCA 7-14-301, doesn’t make note of exemptions, either.

Currently, city vehicle maintenance superintendent Jack Stucky said the city is exempt from paying the federal gas tax, but it pays the state gas tax, and it gets those dollars and more back to fund the entire streets division. He figures the city would end up paying the local option gas tax, too.

In the 2010 fiscal year, the city used 98,485 gallons of unleaded, he said, so that’d mean the local tax would cost $2,000. He figures it’s worth it for the city to spend its share of the proceeds on sidewalks. Income gets shared between the city and the county at an agreed-upon amount.

“To be honest with you, I can’t see how they’re going to fund building those sidewalks,” Stucky said. “They just need to decide how bad they want ’em.”

Even if someone wanted to incorporate exemptions, though, it’d be difficult to do the paperwork, according to the city attorney.

“It is interesting, but I wonder if the state Legislature even thought of it when they were passing the law and putting it on the books,” Nugent said.

County chief administrative officer Dale Bickell said Friday he also was looking into the matter.

Reporter Keila Szpaller can be reached at @KeilaSzpaller, 523-5262, or on

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