Montana lawmakers have decided not to convene a special session to address the state’s escalating property taxes. This decision comes after a push by a group of deeply conservative legislators to have the Legislature meet in January. Despite their efforts, which included drafting four proposals aimed at mitigating the tax burden, the initiative did not receive sufficient backing from members of both political parties. Notably, about 30 legislators did not even respond to the poll that proposed this special session.
One of the proposals put forward by this group involved capping the state’s share of property levies and using Montana’s projected budget surplus to provide rebates to taxpayers. However, this idea, along with the others, failed to garner the necessary support.
The issue of property taxes has been a contentious one in Montana politics. Last summer, Democratic legislators requested Governor Greg Gianforte to call a special session to reduce the state’s property tax rate, particularly in light of rising property values. However, they did not conduct a poll among members to gauge support for this move. In response, Governor Gianforte’s office criticized the Democrats for their previous opposition to tax rebates and dismissed the idea of a special session as a wasteful use of resources.
Income Tax Reforms Underway
Apart from the debate over property taxes, Montana is also seeing changes in its income tax regulations. Two significant amendments to the tax code, made during the 2021 and 2023 legislative sessions, are set to take effect for the 2024 tax collections.
Senate Bill 399 is a major reform that reduces the number of income tax brackets from seven to two. This bill also eliminates more than a dozen tax credits, aiming to simplify the tax filing process. Moreover, it completely removes income taxes for the state’s lowest wage earners, which is estimated to benefit between 50,000 to 70,000 individuals.
Another change comes from Senate Bill 121, which reduces Montana’s top income tax rate from 6.5% to 5.9%. This new rate applies to anyone earning approximately $18,000 a year or more.
These changes are hailed by Republicans as a demonstration of broad tax relief and a testament to a sound fiscal budget. On the other hand, Democrats have opposed these bills, arguing that they disproportionately favor the wealthy and could potentially decrease the revenue available for crucial services.
Montanans filing their tax returns this spring won’t see these changes yet, but they will be fully in place for the next tax season.
