Montana is considering making cuts to its individual income tax rate as a growing number of states have completely transitioned to eliminating the tax altogether.
Republican Gov. Greg Gianforte came out in support of Senate Bill 323 last week, which would cut the state income tax from 5.9% to 4.9%, at a news conference with Americans for Prosperity.
“So I came into office back four years ago after 16 years of Democrats in the governor’s office in Montana, and we had the highest income tax rate in the Rocky Mountain West,” Gianforte told Fox News Digital in an interview.
“I firmly believe that the citizens of Montana know how to spend their money better than the government does. And so we’ve made it a priority to bring the tax rate down and to simplify our tax code. We’ve gone from seven tax brackets to two. With this change that we’re proposing, we knock another full percentage point off the income tax rate, and we’d be very close to a flat tax,” he added.
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If passed into law, it would lower the Treasure State’s comparatively high tax rate compared to others in the region even further, after the bracket impacting most people went from 6.9% to 6.75%, down to 5.9% in recent years. The state previously had seven brackets, and now it has two as of 2021.
“It’s the most conservative tax-cut bill in front of our legislature right now, and we are a conservative legislature. I am optimistic,” the Republican said.
The current version of the bill, which is still early in the process, would cut the tax rate to 5.4% in 2026 and the 4.9% rate would start in 2027, according to the legislation’s fiscal note.
“As a fellow Montanan feeling the economic strain from the current rising cost of living in our gorgeous state, the bill would provide some relief,” Bianca Lester of Butte said, according to a news release.
“I’m a single mom of four, which is no easy feat, and I need every penny that I make to help house and clothe and feed my kids. This bill would allow for so many other families like mine to keep all of our hard-earned income,” Lester added.
Donald Trump Jr. also came out in support of the proposed cuts.
“[Gianforte] pushing for the largest income tax cut in Montana history, just like my father’s historic tax cuts! Montana leading the way with conservative, Trump-style tax policies! Get it done! #MAGA,” he posted last week.
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The development comes as Mississippi Gov. Tate Reeves just signed legislation that will phase out the state’s income tax entirely in the coming years with the hope of boosting economic development in the southern state.
In Montana, there are also bills moving through the process to tackle the state’s property taxes.
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Nationwide, President Donald Trump and Republicans in Congress are also pushing for major tax reforms, including no taxes on tips and overtime pay, and there have also been other income tax cuts floated by the Trump administration.
“I’m excited to get this across the finish line, because I think Montanans know how to spend their money better than the government does,” Gianforte said.
