March 23, 2005
WASHINGTON, D.C.—A lawsuit aimed at boosting Montana's corporate tax collections violates taxpayer privacy rights and won't achieve its goal of raising business taxes, according to a new analysis by the Tax Foundation.
"Corporate tax collections in Montana are up 50 percent last year, but evidently that's not enough," said Chris Atkins, Staff Attorney with the Tax Foundation and author of the new analysis. "State lawmakers want more revenue, and they want to find it by scouring tax returns of corporations in Montana."
The suit was filed by State Senator Jim Elliott, and would force the Montana Department of Revenue to disclose confidential corporate tax returns to legislators. The goal is to examine the private tax returns and draft legislation to increase companies' tax liabilities in Montana.
The analysis, "Montana Corporate Tax Disclosure Lawsuit is Built on Shaky Foundations," shows that the suit would inappropriately and arbitrarily transfer the authority to enforce tax law from the Montana Department of Revenue to individual state legislators like Sen. Elliott. Additionally, the latest data show corporate tax collections in Montana are rising, not falling, after all.
"Lawmakers don't need access to private taxpayer information to make sound tax policy," said Atkins. "Montana will gain nothing but more litigation, complexity and controversy over its corporate tax policy."
The Tax Foundation has monitored tax policy at the federal, state and local levels since 1937. Best known for its annual calculation of Tax Freedom Day®, the Tax Foundation is a nonprofit, nonpartisan 501(c)(3) organization based in Washington, D.C.
(Click here to view the full study.)
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Media Contact: Chris Atkins (202) 464-6200