Two competing bills are headed to the full Senate for debate — one backed by Gov. Greg Gianforte, the other crafted by Democrats and now supported by some Republicans. But, negotiations are ongoing.
Republican Sen. Becky Beard, vice chair of the Senate Taxation Committee, said the governor’s bill needs more work.
“This is an atrociously complicated bill, but I think we need to get it down to the financial wizards to start looking at the good parts of it and perhaps come to some kind of reconciliation there.”
Gianforte’s proposal would shift a higher property tax burden onto second home owners, short-term rentals and big businesses. Primary residences and small businesses would in turn be able to apply for a tax break.
An amendment was added to offer one-time-only $400 property tax rebates to homeowners this year, as the state has likely run out of time to implement a new policy for 2025. It was also amended with language to address restrictions a few local governments have on the amount of taxes they can collect.
In its original form, the Democrats’ bill would restructure property tax rates as a tiered system with higher levies on higher value homes. It would have eliminated taxes on a property’s first $50,000 in market value.
However, Republican lawmakers took control of the bill this week and removed that progressive tax system to instead broadly lower rates for residential, agricultural and some commercial properties. It would also require property owners to apply for the $50,000 tax-exemption, eligible only for primary residences.
Those who applied and received property tax rebates the last two years would be automatically eligible, as would homeowners on tribal lands.
Only one proposal can advance between the two. The full Senate will likely decide which one in the coming days.
The Senate Tax Committee voted down a third proposal that would have changed the property tax rate structure – with the lion’s share of relief going to residences, agriculture lands and small businesses. Telecom, energy and industrial groups opposed the bill, saying they would experience too high a burden under the shift.
