Gov. Greg Gianforte is again asking state lawmakers to cut taxes this legislative session, largely building off work he started in 2021. Some lawmakers are also pushing for more relief for low-income Montanans.
Republican Sen. Becky Beard from Elliston is carrying the governor’s proposal in a bill that would further cut Montana’s top marginal income tax rate – which most Montanans who make roughly $18,000 a year or more fall into.
Last session, the Legislature cut that rate down to 6.5%, and Beard’s Senate Bill 121 would bring that down again to 5.9%.
“Over the past couple of years, we have actually seen more people coming to our state, more private enterprise, more income tax being paid, because we do have more people working,” Beard said.
Democrats and some advocacy groups have pushed back against Gianforte's proposed tax cut as it applies uniformly regardless of income, so the wealthiest Montanans see the largest benefit.
Gianforte is also proposing an expansion of the state’s Earned Income Tax Credit, which benefits middle and low income earners. That proposal to expand the credit from 3% of the federal Earned Income Tax Credit, to 10%, is also contained in Beard’s bill.
The bill would cost the state about $150 million annually once in effect.
The bill saw support from the Montana Taxpayers’ Association, the Montana Farm Bureau Federation and the Yellowstone County Chamber of Commerce.
This week lawmakers also heard a proposal from the Revenue Interim Committee more narrowly tailored or moderate and low-income property owners and renters. The committee bill comes with bipartisan support and is carried Democratic Sen. Shannon O’Brien from Missoula.
Senate Bill 15 would make available an existing tax credit to moderate- and low-income property owners and renters aiming to make housing costs more manageable. Credits would be added to residents’ income taxes and increase for lower income levels.
O’Brien says the policy can complement Beard’s bill.
“What we aim for in a tax system is fairness and consistency,” O’Brien said.
Supporters of the proposal include the Montana Association of Counties, the Montana Food Network, an advocacy group for older Montanans and the Blackfeet Tribe. No one spoke in opposition, however, Republican Sen. Greg Hertz from Polson said he has concerns about income tax revenue being used to prop up property tax relief when local levies pass.
