In April, the Montana legislature narrowly defeated a bill to levy a tax on the revenue of big box retailers. Supported by most Democrats and a handful of Republicans, the legislation would have imposed a 1 percent tax on the revenue of retailers with more than $20 million in annual sales, a 1.5 percent tax on those with more than $30 million in sales, and a 2 percent tax on those with over $40 million.

Wal-Mart and Home Depot stores take in an average of about $50 million per year, but sales vary widely depending on the size and location of the store.

Supporters said the measure was needed because big box retailers use state services, pay low wages, and siphon money out of Montana. "This bill protects Main Street Montana," said Senator Ken Toole, a Democrat from Helena. "We are seeing a dramatic shift in retail in Montana. I make no apologies that this is targeting large, out-of-state corporations."

"Few Montanans have overt sympathy for multi-billion dollar giants that extract large sums of money from the state’s economy," Rep. Michael Lange, a Republican from Billings, wrote in an op-ed in support of the measure which appeared in several newspapers.

Supporters also presented the bill as a way of addressing the state’s $230 million two-year budget deficit. The tax would have raised an estimated $60 million over two years.

But opponents, who argued the tax was unfair and would be passed through to Montana consumers, ultimately prevailed. The bill failed 26-24 in the Senate and 57-42 in the House.

The proposal has some historical precedents. Special taxes on chain stores were enacted by about half the states during the 1920s and 1930s. At the time, many Americans viewed concentrated economic power as a threat to democracy. These tax laws were eventually repealed following a major public relations campaign by chain retailers.

• Montana Big Box Tax Bill
• More on the history of chain store taxes can be found in The Home Town Advantage book

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