Gov. Greg Gianforte signed two measures into law on Thursday, effectively cutting Montana’s income tax rate and simplifying the state’s tax code – two pillars of his statewide economic plan.
Gianforte signed the measures during a tour of Thompson Precision Manufacturing in Kalispell.
“As we continue to lead the Montana comeback, we’re letting hardworking Montana families keep more of what they earn and reforming our tax system to make Montana more competitive,” Gianforte said in a release. “These new laws will cut Montana’s income tax rate, simplify our complex tax code, and create more jobs and greater opportunities for Montanans.”
Gianforte signed the Personal Income Tax Relief Act, or Senate Bill 159, which passed the Montana Senate on a largely party line vote. Democrat opponents argued that the reductions will result in budget cuts that would undermine various services funded by the state.
The measure reduces Montana’s top income tax rate to 6.75% beginning next year. Montana had one of the highest income tax rates in the Rocky Mountain West, making the state less competitive, Gianforte has contended.
Sen. Greg Hertz, Polson, who sponsored several of the tax-related measures, praised the bill becoming law.
“Montanans deserve tax relief and an easy-to-understand tax system free of unnecessary complications and paperwork,” Hertz said. “I was glad to carry these pro-jobs, pro-growth tax reform bills through the legislature, and am pleased Governor Gianforte signed them into law today.”
Thursday’s signing also include Senate Bill 399, which creates only two tax brackets instead of the current seven. It also sets the rates at 4.7% and 6.5%.
The measure nixes more than two dozen tax credits and deductions and is expected to reduce income tax revenue by around $45 million a year.
“Working with the governor, we set out to provide Montanans much-needed tax relief, create more good-paying jobs, and help get the economy going again,” said Sen. Mark Blasdel, R-Kalispell. “Together, we created $120 million in broad based tax relief and kept our promise to deliver conservative leadership that will make a real, positive difference for hardworking Montanans across the state.”