The "Local Option Property Tax Relief Act" proposes significant changes to Montana's sales tax laws, allowing local governments to implement a local option tax, contingent upon voter approval. This tax is designed to provide relief for property taxes on primary residences and long-term rentals, with a maximum rate set at 4%. The bill specifies that 90% of the revenue generated must be allocated for property tax relief, while also ensuring that some of this relief is passed on to renters of long-term rentals. Additionally, local governments must enact an administrative ordinance before implementing the tax and are required to establish a local option tax distribution account to manage the revenue.

The legislation also amends various sections of the Montana Code Annotated (MCA) to enhance financial oversight and reporting for local government entities and accommodation sellers. It mandates audits for local government entities covering the previous two fiscal years and introduces new reporting requirements for accommodation sellers, including the necessity to report the physical address of accommodations. Furthermore, the bill modifies the allocation of tax proceeds to ensure funds are directed to specific accounts for the Montana Heritage Center and historic preservation grants. It includes a saving clause for rights and duties that matured before its effective date and establishes that the act will take effect on July 1, 2026.

Statutes affected:
LC Text: 7-7-4424, 7-7-4428
HB0489_1(1): 2-7-503, 15-65-112, 15-68-502, 15-68-820, 17-7-502, 22-3-1303, 22-3-1304, 22-3-1307
HB0489_1: 2-7-503, 15-65-112, 15-68-502, 15-68-820, 17-7-502, 22-3-1303, 22-3-1304, 22-3-1307