Gianforte-backed tax bills set for first hearing in Montana Legislature

HELENA — Gov. Greg Gianforte has made tax reduction a central a part of his funds plan, touting proposals for $1 billion in property and earnings tax reductions. Now, a number of the key concepts in that plan are set for his or her first hearings within the Montana Legislature.

Earlier this month, Gianforte held a information convention the place he referred to as on lawmakers to take fast motion on tax reduction proposals.

“In the end, this isn’t the federal government’s cash, it’s the cash of hard-working Montanans who earn it,” he stated. “We’re dedicated to placing a refund in Montanans’ pockets by means of everlasting, long-term tax reduction and rebates.”

Three of the governor’s priorities could have committee hearings on Tuesday. The Senate Taxation Committee will hear testimony on Senate Invoice 121, sponsored by Sen. Becky Beard, R-Elliston. It might make two giant modifications: dropping the highest earnings tax charge from 6.5% to five.9%, beginning in 2024; and greater than tripling the state earned earnings tax credit score for lower-income households.

Throughout the 2021 legislative session, lawmakers handed a invoice that can scale back the variety of state earnings tax brackets from seven to 2 as of 2024. The 2 charges had been set to be 4.7% and 6.5%.

In line with an evaluation from the Governor’s Workplace of Finances and Program Planning, decreasing the highest charge – which leaders say most Montanans pay – would cut back state earnings tax collections by $127.8 million the primary yr and $150.6 million a yr by 2027.

The state earned earnings tax credit score relies on a federal program for low- and moderate-income households. Presently, Montana permits folks eligible for the federal credit score to say 3% of that quantity from the state. SB 121 would enhance that to 10%. The governor’s funds workplace estimated the change would increase the claimed credit from $4.7 million a yr to $15.8 million a yr.

“Montanans are struggling to make ends meet and have been paying extra earnings taxes than the state must fund important providers,” Beard stated Monday in an announcement from Senate Republican management. “This can be a frequent sense conservative strategy, giving Montanans a increase by completely reducing the taxes they pay.”

The Home Taxation Committee will maintain hearings Tuesday on two different proposals. Home Invoice 222, sponsored by Rep. Tom Welch, R-Dillon, would supply a property tax rebate of as much as $1,000 every of the following two years on a Montana property proprietor’s main residence inside the state. Gianforte stated that might return about $500 million to taxpayers.

Home Invoice 212, from Rep. Josh Kassmier, R-Fort Benton, would vastly enhance the exemption for Montana’s enterprise tools tax. Presently, companies should pay a tax on all kinds of kit, from farm implements to mining and oil and fuel equipment to business furnishings and fixtures. Smaller companies are exempted if their whole tools values lower than $300,000. HB 212 would increase that restrict to $1 million.

The Legislature already elevated the exemption from $100,000 to $300,000 within the 2021 session, and Gianforte stated these will increase would hold greater than 5,000 companies, farms and ranches from paying any enterprise tools tax.

Gianforte has additionally proposed different tax modifications, together with a toddler tax credit score and a credit score for adoptions. Nevertheless, his proposals aren’t the one concepts for tax reductions.

Final week, the Home Appropriations Committee held a listening to on Home Invoice 192, from Rep. Invoice Mercer, R-Billings. It might put aside $250 million for property tax rebates – a single $1,000 cost in comparison with HB 222’s two funds – however one other $650 million for particular person earnings tax rebates. People would obtain as much as $1,250, and married {couples} would stand up to $2,500.

Mercer instructed MTN it made sense to dedicate a number of the surplus to paying again particular person earnings taxpayers, since that’s largely the place the excess got here from. He stated utilizing $900 million for rebates would nonetheless depart properly over $1 billion accessible for lawmakers to make use of for different wants. He stated as a result of his invoice was utilizing one-time-only funds, he would not consider it could intervene with a long-term lower within the earnings tax charge.

Moreover, Senate GOP leaders are highlighting one other invoice, from Sen. Greg Hertz, R-Polson, that might simplify the state’s company earnings tax calculations to make use of a single issue primarily based on gross sales.

With extra tax proposals coming, it’s clear determining simply how a lot state income to offer again to taxpayers – and the way to do it – can be an enormous debate proper by means of the top of the session.