4/17/2024 0 Comments 2021 mt income tax bracketsAfter passing the Senate, it was amended by House Taxation Committee Republicans to drop the rate further to 6.5% - a change that increased the cut’s cost to state coffers substantially, from about $30 million to about $80 million a year. Greg Gianforte in his January budget proposal.Īmong those governor-backed budget bills is Senate Bill 159, which as initially introduced would have pulled the state’s top bracket income tax rate down from 6.9% to 6.75%. Hertz, who served as Speaker of the House in 2019, has sponsored several significant tax bills this session, including some implementing different pieces of the tax policy suite proposed by Gov. “That’s my fear, as we move forward and continue to ratchet down the amount of money that we bring in revenue to the state of Montana, that that is going to cause us to have to have a sales tax in order to make things right for education and the folks we care about out on the ground,” Senate Minority Leader Jill Cohenour, D-East Helena, said on the Senate floor last week. “That’s my fear, as we move forward and continue to ratchet down the amount of money that we bring in revenue to the state of Montana, that that is going to cause us to have to have a sales tax in order to make things right for education and the folks we care about out on the ground.” Senate Minority Leader Jill Cohenour, D-East Helenaĭemocrats argue the Hertz bill has been rushed through the legislative process, and that Republicans’ push to reduce Montana’s income taxes will put the state on a path toward needing a sales tax to fund government services. “Once you finish your federal tax return, you should be able to jump right over to your state tax form, make a few adjustments, and know exactly what you owe,” Hertz said as he pitched the bill on the Senate floor last week.Īs is often the case with legislation aimed at streamlining tangled tax code, however, the proposal’s details are anything but simple - and potentially consequential, given how even arcane tax code tweaks can ripple through the wallets of Montana taxpayers up and down the income spectrum.įurther complicating the picture, the 98-page Hertz bill also bakes in a major Republican priority for the legislative session: lowering the income tax rate on high earners, on the logic that lighter taxes on the wealthy will boost the Montana economy by making the state a more attractive destination for out-of-state entrepreneurs. If passed, he says, it would make filing personal state income taxes easier and fairer by pruning the number of state tax credits and aligning the calculations required on state tax forms more closely with the ones taxpayers already have to do for their federal taxes. Sponsor Greg Hertz, a Republican senator from Polson, has pitched Senate Bill 399 as a tax code simplification measure. HELENA - Montana’s income tax system could see a nearly wholesale rewrite if a bill passed by the state Senate last week and now under consideration by the House becomes law, bundling lower top-bracket tax rates sought by Republicans with a slew of other tweaks to the state tax code.
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