Montana Chamber of Commerce President and CEO Argues for Consideration of Statewide Sales Tax
Todd O'Hair's comments came alongside analysis of the state’s economic status from other experts at a mid-year update from the University of Montana’s Bureau of Business and Economic Research
By Mariah Thomas
It’s time for a serious conversation about implementing a sales tax in the state of Montana, according to Todd O’Hair, the president and CEO of the Montana Chamber of Commerce.
“The big industrial base of our state continues to decline and we are hanging religiously on the fact that we don’t have a sales tax in this state,” O’Hair said. “And I think that if we don’t start having an adult conversation about our economy today and where it’s going in the next 10 years, we will never catch up.
“We will rob our children and our future because of tax policy in the state that is not conducive to the economy that we have.”
O’Hair gave his comments at a mid-year economic update from the University of Montana’s Bureau of Business and Economic Research (BBER). He was one of three speakers at the event.
Montana has historically reacted sourly to the idea of a statewide sales tax. But O’Hair made the case that the economy is changing. Montana has become more dependent on professional services and tourism. That’s while the natural resource industry the state’s economy has depended upon in the past has been in decline.
The Anaconda Copper Company closed in the early 1980s. The company used to contribute the modern-day equivalent of $87 million in property taxes, according to O’Hair. Montana has also seen the closure of 36 sawmills since 1990 — which also contributed a significant amount to property tax collections in the areas where they operated.
Even as those businesses close, the property tax load in those areas doesn’t dissipate. Instead, O’Hair said, it falls to local businesses and residential property owners to make up the difference. That squeeze has been felt by property owners.
The legislature tried to address the issue of property taxes during the legislative session through passage of a second-home tax. That rewrite of the tax code shifted the property tax burden from primary residences to second-home owners and short-term rentals. It also raised the cost on businesses. The Chamber opposed the legislation.
In O’Hair’s view, the shift in the state’s dominant industries combined with the outsized amount of property tax Montanans are paying indicate Montana needs to adjust its tax structure to accommodate the present day.
With Montana’s rise in tourism, implementing a sales tax poses a viable solution for O’Hair. Still, he acknowledged the idea doesn’t hold political popularity. He quipped that his comments ruined his chances of running for office.
“I think that you can rest assured our elected leaders and our political leaders will not advocate for this,” O’Hair said. “This is where the business community has to start having these honest conversations and talking about the need for a reform of our tax structure. And if the business community will lead, our elected officials will follow. And I think that’s incumbent on all of us in this room. If we don’t, who’s going to pay for the next round of property tax deductions?”
The state’s new property tax code served as one of several recent political events speakers addressed Thursday afternoon.
The BBER’s new director, Jeffrey Michael, spoke about the projected impacts of President Donald Trump’s tariff proposals. Accurate projections posed something of a challenge, as the Trump-imposed Aug. 1 deadline for several countries to strike trade deals with the U.S. or face tariffs loomed over Michael’s remarks.
“Probably the biggest issue with the tariffs right now is the volatility,” he said.
But in his eyes, the impacts from the tariffs have been overstated. Still, he anticipated the tariffs could pose some negative effects to Montana industries. He said construction in particular could be hit hard by the taxes imposed on imported materials.
Brigitta Miranda-Freer, who heads the Montana World Trade Center, added that her organization conducted a survey of businesses regarding the tariffs. Again, uncertainty cropped up as a theme in her comments. Businesses responded that, as they navigated the tariffs, they experienced impacts like decreases in productivity and reductions in force.
Michael also touched on domestic impacts from the recently passed One Big Beautiful Bill. His main takeaway is that the complex tax changes from the bill will likely be favorable for Montana.
He specifically highlighted that he anticipates positive impacts from the bill’s qualified business code deduction. A thriving small business community in the state takes advantage of that deduction frequently, he said. That piece of the One Big Beautiful Bill Act is one Sen. Steve Daines, R-Montana, took credit for preserving.