Gov. Greg Gianforte has made cutting income taxes a top priority since he first took office in 2021. The Montana Legislature again agreed to a rate reduction this session, but by less than what the governor had proposed. Gianforte wanted a 1% cut and lawmakers approved half that.
For a single worker earning $50,000 annually, that amounts to a savings of about $170.
At a bill signing outside of the Capitol, Gianforte said he’s glad Montanans will retain more of their wages.
“Even after our historic tax cuts in 2021 and 2023, we still have the highest income tax rate in the region, and one of the highest in the nation,” he said.
Montana does have an above-average income tax rate, however it’s the only state in the region that does not collect a general statewide sales tax.
Democrats have long opposed broadly cutting the state’s top marginal tax rate, saying it disproportionately benefits the wealthiest residents. They’re also concerned the projected $270 million loss in state revenue could lead to program cuts down the road.
Lawmakers this session went beyond the governor’s proposal to expand a tax credit for low-income earners. The state will bump its match of the federal Earned Income Tax Credit from 10% to 20% for those eligible.
With roughly a week to finish their business, lawmakers are still hashing how to approach property tax relief.
