Polson legislator introduces bill to overhaul Montana income tax

Sen. Greg Hertz, R-Polson

(KPAX) — A Republican state senator has introduced a major rewrite of the state income tax, saying it greatly simplifies the tax, lowers the top rate and eliminates taxes for as many as 50,000 low-income Montanans.

Senate Bill 399, introduced late Friday, would create only two tax brackets, instead of the current seven, and set the rates at 4.7 percent and 6.5 percent. It also would get rid of more than two dozen tax credits and deductions.

“It’s pretty complicated to do your Montana tax return,” the sponsor, Sen. Greg Hertz of Polson, told MTN News Saturday. “This will just make things a little simpler for folks.

“It will save most people taxes and give us a little broader base and a fairer system, where we’re not picking winners and losers, with tax credits and deductions.”

Hertz also is the sponsor of Republican Gov. Greg Gianforte’s main state income-tax reduction bill, which, in its current form, lowers the top rate from 6.9 percent to 6.5 percent.

That bill’s current price-tag is about $80 million a year.

Hertz said SB399 would reduce income-tax revenue by about $45 million a year, and that the governor’s office is open to considering his approach.