Governor Gianforte Delivers Montanans Largest Tax Cut in State History

• March 13 2023

HELENA, Mont. – Delivering on Montanans’ priorities and his promise, Governor Greg Gianforte today signed a historic tax package into law, providing Montanans the largest tax cut in state history.

“Today, we stand together on the steps of the people’s house to mark a historic day in Montana,” Gov. Gianforte said. “Today, we’re delivering the largest tax cut in Montana history, helping hardworking Montanans keep more of what they earn.”

Gov. Gianforte, joined by legislators on the front steps of the capitol, discusses historic tax package

Joined by members of the 68th Legislature, Gov. Gianforte signed into law six bills to provide Montanans immediate tax rebates and permanent, long-term tax relief.

“Together, our shared conservative values of fiscal responsibility, smaller government, and lower taxes guide us. Our shared conservative values show us the way, as we work to make Montana an even better place to live, work, and raise a family,” Gov. Gianforte said.

$500 Million in Permanent Income Tax Relief

Delivering on his promise to help Montanans keep more of what they earn and make Montana more competitive, Gov. Gianforte today lowered the income tax rate most Montanans pay from 6.75 to 5.9%, a proposal introduced in his Budget for Montana Families. When the governor took office in 2021, the rate was 6.9%.

To help lower-income working Montanans and incentivize work, the bill also triples the earned income tax credit.

Taken together, SB 121 provides more than $500 million in permanent income tax relief for Montanans over the next three years.

The bill’s sponsor, Senator Becky Beard, R-Elliston, celebrated the signing, saying, “Minimizing tax liability on my neighbors here in Montana is a priority I share with the governor. This will help our economy and put more money in folks’ pockets.”

$280 Million in Property Tax Relief

A priority in his Budget for Montana Families, Gov. Gianforte also delivered Montana homeowners significant, meaningful property tax relief today, signing HB 222 into law.

Sponsored by Rep. Tom Welch, R-Dillon, HB 222 provides a $500 property tax rebate to homeowners for their primary residence in 2023 and 2024, totaling over $280 million in relief.

“This is a bill that is long past due, and it’s just the first step,” Rep. Welch said. “We’re building the foundation here for future reforms and property tax relief.”

In addition to property tax rebates, the governor emphasized the need for long-term reforms. “Montanans’ property taxes are too high. And they keep rising as some local jurisdictions’ spending has grown much faster than the rates of inflation and population growth. Let’s be clear – rising property taxes should not force someone out of their home,” Gov. Gianforte said. “Montanans need property tax relief, including through a rebate and long-term reforms.”

Income Tax Rebates up to $1,250 for Montanans

The governor also signed into law HB 192, providing Montana income taxpayers with rebates of up to $1,250.

“Because we passed a conservative budget two years ago, we have a historic surplus today,” the governor said. “Since Montanans overpaid their taxes, we’re giving it back to the folks who work hard to earn it.”

Rep. Bill Mercer, R-Billings, who introduced and carried HB 192, said, “This legislation is a promise delivered. We said we were going to shock the public, taking excess money out of the treasury and giving it back to taxpayers. We have made good on that promise in short order.”

Fourth Lowest Capital Gains Tax Rate in the Nation

After providing historic property and income tax relief, the governor signed HB 221 to simplify Montana’s complex, complicated, and unclear capital gains system to support families, homeowners, retirees, farmers, and ranchers.

Introduced in his Budget for Montana Families, and carried by Rep. Welch through legislation, the reform makes Montana’s capital gains tax rates the fourth lowest in the nation.

5,000 Businesses Removed from Business Equipment Tax Rolls

After tripling the business equipment tax exemption in 2021, the governor today increased the exemption to $1 million for every small business in Montana, a priority proposal in his Budget for Montana Families.

When he took office in 2021, the business equipment tax exemption was $100,000.

Sponsored by Rep. Josh Kassmier, R-Fort Benton, HB 212 eliminates the business equipment tax burden for more than 5,000 Montana small businesses, taken together with efforts from last session.

“This is a great bill for small businesses, allowing them to invest in their communities, their businesses, and their employees,” said Rep. Kassmier.

Corporate Tax Code Modernization

To round out the tax relief bill signing, Gov. Gianforte signed SB 124, a measure introduced in his budget and carried through legislation by Sen. Greg Hertz, R-Polson, to modernize Montana’s corporate tax code to boost job creation and investment.

“We’re leading the charge for taxpayers across Montana. This reform will allow businesses to continue to invest in Montana and create good-paying jobs, making it easier for our kids and grandkids to stay in Montana,” said Sen. Hertz.

Gov. Gianforte: We’re Just Getting Started

Before concluding the event, Gov. Gianforte urged legislative action on several key priorities in his Budget for Montana Families.

“Montanans sent us to Helena to serve them, deliver on their priorities, and get the job done,” Gov. Gianforte said. “With the rest of our budget before the legislature, let’s get it done.”

The governor specifically highlighted his proposed permanent, refundable $1,200 child tax credit for working families, his proposed $7,500 adoption tax credit, his proposed plan to repair state-run facilities, his proposed plan to increase the state’s housing supply, and his proposed plan to create a local disaster resiliency fund to reduce the risk of disaster in Montana communities.

Finally, Gov. Gianforte emphasized that his proposed budget is fiscally responsible and balanced, holds the line on spending, has a strong ending fund balance, and avoids cuts to essential services.

“When it comes down to it, ours is a budget for Montana families. I look forward to working with legislators, like the ones here today, to get our Budget for Montana Families across the finish line,” Gov. Gianforte said. “Let’s get it done.”

Gov. Gianforte’s bill signing may be viewed here.