Montana Sign by Jimmy Emerson, Licensed under CC
Last week, Governor Gianforte hosted a press conference at the Montana State Capitol advocating for his plan to deliver significant income and property tax cuts to Montanans.
“As I meet with Montanans in every corner of our state, I hear loud and clear: tax relief is a priority, that’s why we’ve proposed to cut taxes again this session, to once again deliver the largest tax cut in state history. Our tax cuts will let Montanans keep more of what they earn, help folks navigate the nationwide affordability crisis, and create a more prosperous future for our state and people,” said Governor Gianforte.
Thanks to Governor Gianforte’s steadfast leadership, Montana lawmakers have taken steps in the last two sessions to restructure Montana’s income tax from seven to two brackets and lowered the income tax rate most Montanans pay from 6.9% to 5.9%. Yet, Governor Greg Gianforte is not done and is continuing to push for further reductions in the state income tax that will enhance Montana’s economic competitiveness and allow hardworking Montanans to keep more of their money.
Governor Gianforte’s budget proposal contains 3 major provisions:
- A reduction in Montana’s top income tax rate from 5.9% to 4.9%.
- An expansion of the earned income tax credit.
- The introduction of a “homestead” tax rate aimed at lowering the property tax burden on primary residences, long-term rentals, and small businesses.
Throughout the United States, there’s been a growing movement of states working to reduce or eliminate their state income tax. States with low- or no-income taxes are far more appealing to families, businesses, and entrepreneurs, as they create an environment that fosters job creation, higher wages, and expanded opportunities.
Despite already enacting the largest tax cut in state history, Governor Gianforte understands that to stay economically competitive with neighboring states, Montana must further improve its state income tax structure. Further reducing the state income tax will enhance competitiveness with neighboring states, lowering Montana’s rate below neighboring Idaho’s. Meanwhile, North Dakota’s top rate stands at 2.5%, while South Dakota and Wyoming impose no state income tax at all. If Montana wants to remain competitive with its neighbor, further income tax cuts must be approved.
These income tax cuts not only benefit individuals but will also benefit businesses. In the United States over 90% of businesses are pass-through entities, in which the business income is “passed through” to the owner’s tax return and taxed under the individual income tax, rather than the corporate tax rate. Further reducing the top rate will leave businesses who file under the individual income tax with more money to invest in their businesses and workers.
The income tax cuts combined with the expansion of the earned income tax credit provide Montanans with $850 million in permanent income tax relief.
To address the drastic rise in property tax bills, Governor Gianforte is also pushing for the creation of a new homestead rate cut to reduce property taxes for Montana homeowners for their primary residence and for Montana small businesses. This proposal is expected to directly lower taxes for over 215,000 primary residences and more than 32,000 small businesses, while also providing indirect relief to more than 130,000 renters. The homestead rate tax cut will on average reduce property taxes by 15% for Montana homeowners and 18% for small businesses.
Governor Gianforte’s bold tax relief plan represents a significant step toward making Montana more affordable and economically competitive. By reducing income tax rates, expanding the earned income tax credit, and implementing a homestead tax cut, his proposal delivers substantial relief to hardworking Montanans, small businesses, and renters alike. As other states move to reduce or eliminate their income taxes, Montana must take action to remain competitive, attract new businesses, and foster long-term economic growth. With $850 million in permanent income tax relief and meaningful property tax reductions, Governor Gianforte’s plan ensures that Montanans keep more of what they earn, strengthening families, businesses, and the state’s economic future.
