Montana Legislature passes $1B in tax relief, rebates

HELENA, Mont. (AP) — Montana’s Legislature has passed bills totaling over $1 billion in tax relief and rebates for state residents. But lawmakers have tabled parts of Republican Gov. Greg Gianforte’s budget proposal, including a child tax credit.

The income and property tax relief combined could total $3,500 for a couple living in their home if they had paid that much in taxes.

“Never before has the Legislature been able to put money back into Montanans’ pockets at this scale, and doing so this early in a legislative session is unheard of,” Senate Majority Leader Steve Fitzpatrick said in a statement.

Montana’s Legislature is just nearing the midway point of its 90-day session, but the first batch of bills addressing some of the state’s estimated $2.6 billion budget surplus have passed both houses.

“I look forward to signing these bills to send taxpayer money back to hardworking Montanans,” Gianforte said Thursday.

Montana is among many states that built large budget surpluses through a surge in state tax revenues because of an influx of federal pandemic relief funds and the increased wages that followed.

Gianforte outlined his proposals for the surplus in his State of the State address to Montana’s Legislature in January.

One bill that lawmakers have passed provides a onetime tax rebate of up to $1,250 to individual income taxpayers, but no more than what they paid in state taxes in 2021, for an estimated total of $480 million in relief.

Another bill calls for up to a $500 property tax rebate in each of the next two years for people living in the homes they own, up to the amount of property taxes they pay. Residents will have to apply for the rebates, which total about $284 million in tax relief.

Gianforte had proposed up to a $1,000 rebate each year.

Lawmakers have also passed bills to decrease the state’s top income tax rate from 6.5% to 5.9%, increase the earned income tax credit, and reduce the tax liability on long-term capital gains and business equipment.

The budget package pays off $125 million in state debt and sets aside $100 million to leverage additional federal money to repair roads and bridges.

However, the House Appropriations Committee has tabled bills calling for an up to $1,200 tax credit for families with children under the age of 6 and another that would set aside $100 million to leverage additional federal money for local disaster mitigation.

Gianforte urged lawmakers to move that legislation forward.

The bills were passed by Republican lawmakers on party-line votes.

Democrats, who are the minority party, objected to language that required all of the bills to pass or the funding in each remaining individual bill would be reduced by half. They also wanted renters to see tax relief and wanted some of the budget surplus to be spent on workforce housing and childcare.