The House rejected the temporary tax relief amendment, offered by Rep. Chuck Gray, R-Casper, by a vote of 42-18 on Friday. The amendment would have allocated $600 million in funds the state received under the federal Coronavirus, Aid, Relief and Economic Security Act
for property and sales tax relief. Under the amendment, the state would have forgiven half of the property taxes due on and after Sept. 1 and payable on and after Nov. 10, according to the amendment text, granting relief to property owners and helping to replace shortfalls in state and local government revenue.The amendment also would have established a three-month period in which the state sales and use tax would be reduced to zero. The state Department of Revenue would have been required to distribute the federal funds equal to the amount of sales and use tax distributed during the same period in 2019 to the state general fund, cities, towns and counties, according to the amendment language.
Before Friday's vote, Gray told Law360 that many lawmakers indicated support for the measure, a point reiterated by House Speaker Steve Harshman, R-Casper, who said that the first instinct for many lawmakers was to provide a tax holiday.
"However, as the federal guidance became clear, at this time the CARES Act relief funds are for the effects of this pandemic and not for revenue shortfalls or tax holidays," Harshman told Law360 in an emailed statement Monday.
Harshman added that including the amendment would have added an appropriation to the underlying bill that would have allowed a governor's line item veto, something that lawmakers wanted to avoid when writing the bill.
Gray offered the amendment to H.B. 1001. Though the amendment failed, the House approved the underlying bill in a 55-3 vote. The underlying bill appropriates $1.25 billion in funds provided to the state as a part of the federal CARES Act. The bill, which passed the state Legislature on Friday and awaits Republican Gov. Mark Gordon's signature, includes provisions to replace revenue lost by state and local governments to allow them to continue providing a base level of critical services.
A companion version of the bill passed the Senate by 27-2 on Friday.
Gordon, Gray and other state lawmakers did not immediately respond to requests for comment.
--Editing by Vincent Sherry.
For a reprint of this article, please contact reprints@law360.com.