Facts on property tax and a billion bucks back

Mixed messages on taxes confuse and frighten many Montana citizens. Here are some facts on the tax forecast and a billion bucks back to taxpayers.

First, the recent tax estimates sent by mail from the Montana Department of Revenue are higher than reality. Don’t jump off the big bridge. The actual tax bill will be much lower. It is complicated to explain, but I will try.

Second, tax reductions were made during the recently ended 68th Montana legislative session. But the effect of property tax reductions is clouded by huge increases in property values.

State and local governments don’t need huge additional amounts of inflationary money, so the actual tax bills will be less than this initial estimate. This early estimate is based on mills levied last year and multiplied by inflated property values.

However, fewer mills need to be levied in order to raise dollars necessary for services we need from government. Counties and schools make many of these decisions.

Third, last year more taxes were collected than was needed for state and local government services, so a billion dollars of excess tax money is being returned to the taxpayer.

The billion dollar rebate is from a combination of property tax and income tax payments. So, the state will return a substantial property tax refund to primary residence taxpayers.

That refund of $675 will come in October 2023 and again in 2024. Watch for forms in the mail because primary residence owners must request this refund. Owners of expensive vacation mansions won’t receive it.

Fourth, Montana income taxpayers will receive rebate checks up to $1,250 this month, July 2023. That can mean $2,500 per working couple. It is a refund, so you had to pay that much in order to receive the maximum of $1,250 each. This rebate check will be sent automatically, based on state income paid.

Another major tax reduction is on business equipment taxes. Equipment valued up to a million dollars will be exempt from taxes. Also, I sponsored Senate Bill 3 which creates provide a fair and reasonable process of determining timber production tax for a crop that is harvested only once in 70 years.

Finally, many legislators are seeking ways to control taxes on homes. This will be at the top of the agenda for the next legislative session in January 2025.

Sen. Mike Cuffe, R-Eureka