Senator Wiley Galt told the committee Senate Bill 241 is aimed at preventing the liquor licensing process from being used as a mechanism to collect sellers’ back income taxes during the sale or transfer of a license. He described a local example in which a buyer had to assist the seller in settling taxes before the license transfer could proceed.

John Iverson, representing the Montana Tavern Association, testified in favor of the bill, saying the licensing system should protect the public and not be used as a weapon to collect income taxes. Becky Schlau, Alcoholic Beverage Control Administrator with the Department of Revenue, said the department has moved away from withholding transfers for unpaid taxes and instead intends to use a warrant for distraint to collect back taxes so as "not to slow down the transfer of the license." Schlau said withholding transfers still occurred a couple times a year but the department accepted that practice was not efficient and had changed its process.

Committee members asked whether the bill covers all taxes or only certain types. Schlau said the bill language does not specify tax type and so could apply to any outstanding taxes; in the sponsor’s described case the unpaid items were income taxes. Members also asked how common the practice was and whether license quotas would limit availability; Schlau said frequency of the prior withholding practice was "a couple of times a year" and that license availability varies by community.

Senator Galt told the panel the bill codifies current department practice so the licensing mechanism will not be used to collect income taxes going forward. The transcript excerpt does not show a committee vote on SB241.