Montana Debates Special Tax on Wal-Mart, Others

…State Sen. Ken Toole, D-Helena, the bill’s sponsor, says Montana residents are tired of subsidizing big-box stores whose low prices — and high profits — depend on paying workers low wages.

“When you don’t pay workers, they get public assistance,” he said. “Guess who pays for that?”

A state Senate tax panel is scheduled to hear the bill, which has irked retailers and prompted Costco to postpone plans to build a larger store in Kalispell, population 13,000, in the northwest corner of the state.

“We’re waiting to see how the legislation shakes out,” said Doug Schutt, head of operations for Costco’s northern division. “The bill singles out retailers and we think that’s unfair.”

The measure would impose a 1 percent tax on stores with more than $20 million in sales. It would rise to 1.5 percent for more than $30 million and 2 percent for sales of more than $40 million.

The tax would apply to 160 stores, accounting for about half the state’s total retail activity, and funnel about $20 million a year to state coffers, Toole said.

The proposed levy — in a sparsely populated state with no sales tax — would apply to stores whose part-time employees make up more than a quarter of the work force and whose full-time workers earn annual compensation of less than $22,000. 2/14/05