 Senate Republicans July 2023
Income and property tax rebates are on the way
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Income tax rebates are arriving to Montanans! Here are the basics of what you should know about income tax rebates:
- If you paid state income taxes in 2021, you should be receiving money back from the state thanks to a bill passed by Republicans in the state legislature returning budget surplus money back to you, the taxpayers who paid it.
- You don't need to do anything to receive your income tax rebate. It will be direct deposited into your bank account or be mailed to you, depending on how you did your taxes in 2021.
- If you paid $1,250 or less in 2021 state income taxes as an individual, or $2,500 as a married couple filing jointly, you'll receive 100% of your income taxes back!
- If you paid more than those amounts, you'll receive the maximum rebate of $1,250 (individual) or $2,500 (joint).
- Hundreds of thousands of Montanans have already received their income tax rebates. If you haven't received yours yet, you can check the status of it here.
- Legislative Republicans also passed property tax rebates for Montanans. Here are the basics of what you should know about property tax rebates:
- You need to apply for the property tax rebates. You can start applying for your property tax rebate on August 15th, and you must apply by October 1st. More information on how to apply is available from the Department of Revenue here.
- The property tax rebates are $675 (or however much you paid, if it was less than that) for your primary residence.
- There will be a second property tax rebate, also up to $675, next year that you'll need to apply for at that time.
- The application is necessary because the legislation granting the property tax rebates only authorizes the rebates for Montanans' primary residences. Second homes, vacation rentals, seasonal cabins, and homes owned by people who are not Montana residents are not eligible for a property tax rebate.
- Nearly all Democrats in the Montana Legislature voted against both the income and property tax rebates.
Other Key Things to Know
- New unemployment figures from the Department of Labor and Industry show that conservative leadership in Helena is serving Montana well. As of June, the Treasure State has had 20 consecutive months of unemployment below 3 percent. More than 41,000 new jobs have been created statewide since voters gave Republicans unified control of state government. The state's labor force is larger than it's ever been. Governor Gianforte noted: "Wages in Montana grew at the fifth fastest rate in the nation last year, and we have more Montanans working now than ever before."
- Radical environmental groups filed a lawsuit that has temporarily halted two pro-coal bills passed by the Legislature. Read more about the federal judge's temporary block of Senate Bill 392 and House Bill 576 from Montana Public Radio.
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Human trafficking laws lead to arrests
A bill unanimously passed by the 2023 Legislature to clarify and strengthen Montana's laws against human trafficking led to a major development in Bozeman over the weekend. "News of 18 arrests in a Bozeman prostitution sting came with praise for legislation passed earlier this year to strengthen such investigations" is how an article in Lee Newspapers starts off. "It's just going to be the tip of the iceberg" is how Attorney General Austin Knudsen described law enforcement's new capabilities to bust human traffickers in Montana. HB 112 was sponsored by Republican Rep. Jodee Etchart of Billings.
Big improvements at the state prison
There was a lot of concern about major staff shortages at the Montana State Prison in Deer Lodge heading into the 2023 legislative session. In response, the Legislature significantly raised pay for correctional officers. Just three months after the legislative session concluded, the Montana Department of Corrections reported back to legislators that the vacancy rate is now half of what it was. That's a big improvement for the safety of staff, inmates, and visitors at the prison. Read more from Lee Newspapers here.
Emphasis on school safety
The 2021 Montana Legislature passed a bill allowing schools to have school marshals to help keep students and faculty safe. The Big Sky School District is now the first district making use of that new law. The Montana Free Press has an in-depth look at that and much more regarding school safety.
Preparations being made for grizzly bear delisting
Senator Butch Gillespie of Ethridge passed SB 295 to help get Montana ready to manage grizzly bears at the state level, if and when they're delisted from the federal Endangered Species Act. Now, the Fish and Wildlife Commission and FWP are in the process of rulemaking mandated by SB 295.
Policy Spotlight💡
Tax Relief
Senate Bills
Senate Republican leadership identified the top priority for the Legislature heading into the 2023 session as providing financial relief for Montanans. Republicans delivered with the largest tax cut in Montana history, including nearly $1 billion in one-time tax rebates and hundreds of millions more in several ongoing tax reform measures. Nearly all Democrats voted against the tax relief bills.
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SB 121 by Sen. Becky Beard (R-Elliston)
Reduces Montana’s top income tax rate from 6.5% to 5.9% and increases the earned-income tax credit from 3% to 10%, benefiting lower-wage earners. Provides about $170 million annually in ongoing tax relief to most Montanans.
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SB 124 by Sen. Greg Hertz (R-Polson)
Revises corporate income taxes to a “single sales factor.” Rather than corporations paying taxes based on sales, physical presence in the state, and employees in the state, companies would only pay taxes based on sales they make in Montana. This has the effect of making out-of-state corporations like Amazon pay a little more in taxes while reducing taxes for Montana-based businesses like Applied Materials in Kalispell. SB 124 will encourage businesses to expand or relocate to Montana, creating more good-paying jobs.
- Yes, most Montana Democrat legislators voted against this bill to make out-of-state corporations "pay their fair share" of taxes. We couldn't believe it either.
House Bills
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HB 192 by Rep. Bill Mercer (R-Billings)
Provides about $480 million in one-time-only income tax rebates to Montanans from the state’s budget surplus. Individuals will receive up to a $1,250 tax rebate, joint filers will receive up to $2,500.
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HB 222 by Rep. Tom Welch (R-Dillon) and HB 816 by Rep. Josh Kassmier (R-Fort Benton)
Provide about $384 million in rebates to property taxes paid on principal residences from the state’s budget surplus. Each household that is a primary residence will receive two rebates of up to $675 over the next two years, for a total of $1,350 per household in one-time-only tax rebates. HBs 222 and 816 do not provide any rebates to second homes, commercial properties like short-term or long-term rentals, or out-of-state property owners.
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HB 189 by Rep. George Nikolakakos (R-Great Falls)
Raises the portion of a home’s value that can qualify for property tax assistance under the state’s Property Tax Assistance Program, upping the limit from $200,000 to $350,000 to address rising home values. Also increases the income threshold for qualifying in the program, making ongoing property tax relief available to individuals who make up to $27,621 a year and couples who make up to $37,019. Especially helpful for Montana seniors on fixed incomes. Learn more about the Property Tax Assistance Program here.
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HB 212 by Rep. Josh Kassmier (R-Fort Benton)
Raises the exemption from Montana’s businesses equipment tax from the first $300,000 of equipment to the first $1 million of equipment. Removes essentially all Montana small businesses, including farmers and ranchers, from paying the business equipment tax, saving them about $9 million annually.
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HB 221 by Rep. Tom Welch (R-Dillon)
Revises income tax rates for net long-term capital gains, replacing the current tax deduction for capital gains with a reduced tax rate. Creates $16+ million per year in ongoing tax relief.
Further Tax Reform
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SB 123 by Sen. Greg Hertz (R-Polson)
Helps promote transparency on local property taxes by requiring more realistic property values be used on ballot language for local bonds. Bond elections will have to include the tax impact on properties with values of $100,000, $300,000, and $600,000 instead of only referencing $100,000 and $200,000 valuations, which currently artificially make tax increases appear lower than they actually are when voters are reading their ballots.
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SB 332 by Sen. Greg Hertz (R-Polson)
Requires local governments to include information on property tax increases in budget documents, and requires the budget resolution to include information on property tax increases.
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HB 497 by Rep. Fred Anderson (R-Great Falls)
Revises property tax notification requirements by mandating that the property tax bill must include a comparison with taxes owed in the previous year.
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SB 253 by Sen. Greg Hertz (R-Polson)
Raises the contractor's gross receipts (CGR) tax threshold, reducing red tape and expenses for small local contractors and local governments charged with implementing the tax.
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SB 540 by Sen. Daniel Zolnikov (R-Billings)
Requires the state to use the revenue generated by the lodging facility use tax to support Montana’s rural communities instead of funneling money to popular tourist destinations that do not need the state’s help to increase tourism. Additionally, it allows for the transfer of funds from the state's lodging facility using tax allocation to finance the revolving loan program account to provide workforce housing infrastructure so tourism destinations that are far from urban areas can provide affordable housing.
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Senator Becky Beard
Senator Becky Beard, a Republican from Elliston, wrote an op-ed that was published in papers across the state this month explaining the how and why of Montana's income tax rebates and her bill that permanently reduces income tax rates.
Montanans are Getting Their Money Back
"Nearly all working-age Montanans, more than half the state’s total population, are getting some welcome news this month: the state is sending them money.
Let’s be clear. The money being sent to over 530,000 Montanans is their own money. Montana collected more income taxes, the primary source of revenue for state government, than it needed to fund its obligations during the pandemic recovery year of 2021, leading to a historic budget surplus. The Republican supermajority in the state legislature recognized that that over-collection is working Montanans’ money, not the government’s. So we’re returning it to the people who paid it...
While these rebates are one-time-only, I’m proud to have sponsored the bill that permanently cuts income taxes going forward. My Senate Bill 121 cuts the top income tax rate down from 6.5% to 5.9%, while also raising the earned-income tax credit from 3% to 10% to benefit lower-wage earners. The bill will save Montanans about $170 million per year going forward. All Democrats voted against providing this permanent tax relief.
You might hear attacks from Democrats claiming that Republicans’ tax reforms are only benefitting the wealthy, but those talking points don’t make sense for two reasons: most Montanans pay the top income tax rate, and we already cut taxes for the lowest income Montanans. Senator Greg Hertz’s SB 399 from the 2021 legislative session, which goes into effect this upcoming year, removed tens of thousands of the lowest-income Montanans from paying any income taxes at all. Democrats voted against that bill as well."
You can read Sen. Beard's full column here.
Senator Greg Hertz
Senator Greg Hertz, R-Polson, wrote an op-ed in June explaining the basics of property tax appraisals.
What You Should Know About Property Tax Appraisals
"If the value of your property increased by 30% that does not mean your taxes will increase by 30%...
Property tax calculations are complex and understood by few. To calculate your taxes, you must know the formula. The calculation is: the market value of your property X tax rate X mill rate = taxes...
As you can see, the main item that determines your taxes is the mill rate. Mill rates are controlled by your county commissioners, city councils, school boards and voters. The more amenities your elected officials or voters desire, the higher the mill rate. If voters recently voted for new school levies, open space bonds, libraries, parks, law enforcement, new buildings, road improvements, etc., then your taxes will increase as a result of these voter-approved levies."
Read Sen. Hertz's full column here.
Senator Shelley Vance
Republican Sen. Shelley Vance of Belgrade is encouraging Gallatin County residents to get involved in their local city and county budget meetings, where they can have the biggest impact on their property taxes.
To all real property owners in Gallatin County
"Based on the Classification & Appraisal Notice, I’m certain the total taxable value of property in each jurisdiction will be much higher than it was last year. Your Clerk and Recorder should have a record of taxable value certifications from previous years should you choose to compare.
When municipalities and Gallatin County apply the formula above, they should lower the number of mills they levy because the taxable value is much higher.
If you want to do something about your upcoming property tax bill (payment due November 30th), I suggest you attend City and County budget meetings. Speak up. Send emails. Hold your elected officials accountable. Let City and County Commissioners know they should REDUCE THE NUMBER OF MILLS THEY LEVY this year."
You can read Sen. Vance's full letter-to-the-editor here from the Three Forks Voice.
Senator Jason Small of Busby and the Northern Cheyenne Tribe has taken the helm as the new Executive Secretary of the Montana AFL-CIO federation of labor unions. As far as anyone can recall, Sen. Small is both the first Republican and first Native American to ever lead the organization. Read more from Montana Talks here.
Congratulations, Senator Small!
Sen. Small speaking at the AFL-CIO conference.
On the subject of taxes
- The Montana Free Press has a great article explaining the nuances of how property taxes work in Montana, complete with illustrations. Montana Free Press: Property taxes, explained — with pictures
- As you can see in the Free Press's story above, by far the biggest driver of property taxes is local government taxing & spending. The nonpartisan Montana think tank The Frontier Institute released a new report about that local government spending this month. Frontier Institute: The 2024 Real Local Budgets
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Frontier Institute founder and CEO Kendall Cotton explained the main findings of their report in a recent op-ed. He highlights that "The report once again finds most major local governments continued a spending spree last year, burdening Montana taxpayers with hundreds of millions in excessive spending. The cities of Missoula, Bozeman and Kalispell have each more than doubled their budgets since FY 2014, outpacing population growth plus inflation by a combined average 95%. Yellowstone, Gallatin and Missoula top the county spenders since FY 14, growing past population growth plus inflation by an average 41%." Frontier Institute: Uncontrolled Spending Burdens Taxpayers
- Montana Department of Revenue Director Brendan Beatty penned an op-ed explaining why the recent property tax estimations made by his agency are probably much higher than the actual property tax impacts that local governments will set this fall. Billings Gazette: Montana property taxes explained
- The Montana Television Network covered the income tax rebates that are on their way to more than 530,000 Montana taxpayers. MTN: 190K income tax rebates already going out to Montanans
- The Montana Free Press has a handy Q&A guide about the income and property tax rebates passed by Republican legislators. Montana Free Press: See money from the state in your bank account? It’s probably your Montana income tax rebate.
- After voting against tax relief in the legislative session, Montana Democrats have lately been spreading a lot of misinformation about taxes in Montana. But if you'd like to read a reasonable opinion on taxes from a Democrat's perspective, check out this op-ed from Rep. Dave Fern of Whitefish (Fern was one of the very few Democrats who voted for several of Republicans' tax relief bills). Flathead Beacon: More You Should Know About Property Tax Appraisals
On all other topics
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