A week after the House failed to advance one of Republican Gov. Greg Gianforte’s policy priorities to eliminate some capital gains taxes, Republicans rallied around an amendment to keep marijuana businesses from getting the tax break.
Senate Bill 184, to get rid of capital gains taxes on the sale of stock for some businesses that meet job creation metrics, passed easily Wednesday on second reading, with some Democrats joining House Republicans in the 71-29 vote. The GOP holds a 67-33 majority.
The “Montana Entrepreneur Magnet Act” had narrowly failed a second reading vote last week, 49-51, after some Republicans expressed discomfort with tax breaks potentially going to marijuana businesses. But a wide margin had subsequently voted to reconsider that vote, buying time to draft an amendment to allay those concerns.
Rep. Becky Beard, an Elliston Republican who is carrying the bill, offered the amendment, barring any businesses whose activity is illegal under federal law from receiving the tax break. Marijuana remains illegal at the federal level.
“(SB 184) is aimed to focus on growing Montana’s business activity and on growing our families’ wages," Beard said. " … We can look forward to increasing the number of jobs across Montana’s major industry groups, including utilities, durable and non-durable manufacturing, and information and high-tech services.”
House Minority Leader Kim Abbott, D-Helena, reiterated her party’s previous opposition to the bill.
“It prioritizes out-of-state businesses. It doesn’t invest in businesses in the state. It has a somewhat unknown financial implication in the out years, potentially,” Abbott said.
The bill faces a final vote in the House. If passed, the Senate will need to vote on whether to accept the House’s amendments to the bill.