Latest news with #HouseBill337
Yahoo
29-04-2025
- Business
- Yahoo
Gianforte signs third income tax reduction bill of his administration
Montana Gov. Greg Gianforte signs House Bill 337 into law, giving Montanans a $756 million income tax cut over the next four years. (Micah Drew/Daily Montanan) Surrounded by three dozen Republican lawmakers on the steps of the Montana capitol, Gov. Greg Gianforte on Monday signed into law a bill cutting income taxes — the third reduction over the five years of his administration. House Bill 337, sponsored by House Speaker Brandon Ler, R-Savage, lowers Montana's top tax rate by .5% over two years, expands the eligibility threshold for filers to pay the state's lower tax rate, and doubles the Earned Income Tax Credit. 'Once again this legislative session, we're putting money back in Montanan's pockets through permanent, long term tax reductions, and we couldn't have done it without the legislators that are here with me today,' Gianforte said before affixing his signature to the new law. Calling it the 'largest tax cut in Montana's history,' Gianforte said decreasing the top tax rate was a step closer to his goal of having a single, flat rate in the state, which he said will make the state more friendly to businesses and individuals. 'We still have the highest income tax rate in the region and one of the highest in the nation. It's a drag on our economy, a wet blanket on job creation and a burden on Montana families,' Gianforte said. While the governor focused most of his remarks on the reduction of the top tax rate from 5.9% to 5.4% over the next biennium, Ler remarked that the bill's 'real power comes from how we've restructured the entire system.' The threshold where Montana filers move between the state's two income brackets is substantially raised under the new law — essentially tripling the income individuals and joint filers can earn before paying a higher rate. The law also doubles the state's earned income credit, which targets the state's lowest earners. 'This is reform that reaches everyone,' Ler said. 'We didn't get here overnight. This bill is a result of careful policy work and a clear vision that is a shared belief that Montanans deserve a tax code that works for them, not against them.' The three changes made to the state's tax structure will reduce the revenue flowing to the state's general fund by roughly $756 million by fiscal year 2029, according to a fiscal analysis of the legislation, which was a major sticking point for detractors. Sen. Dave Fern, D-Whitefish, said the bill was 'well meaning, but it's just too expensive,' during debate on the Senate floor. Fern brought his own income tax bill aimed at lower and middle class earners that carried a lower fiscal note but didn't make it through the House. The bill passed both chambers with all Democrats in opposition on their initial votes, and just two Democrats voting for the bill overall. 'Government does not exist to give tax cuts to people who do not need them. Government exists to fund schools, fix roads, and provide public safety. Democrats do not support robbing people of essential services to pay for tax cuts for people who absolutely do not need them,' House Appropriations Committee Vice Chairperson Rep. Mary Caferro, D-Helena, said in a press release. 'The public is not crying out for more tax cuts for people at the top.' Gianforte proposed an even larger tax break in his budget last November, which would have cut the top tax rate by a full percentage point without adjusting the lower rate threshold. The new law emerged as a compromise between the governor's plan and one championed by the conservative wing of the senate. 'I've heard loud and clear from Montanans in every corner of our state, income tax relief is a top priority, and I'm incredibly proud of each person up here for helping deliver that needed relief,' Gianforte said. The Legislature wrapped up its 83rd day in Helena on Monday, and is expected to adjourn later this week after the final details are hammered out on a package of property tax relief proposals.
Associated Press
25-04-2025
- Business
- Associated Press
Major income tax cut heads to Montana governor's desk
A major income tax cut that would reduce state revenues by an estimated $267 million a year by 2028 cleared the Montana Legislature on Tuesday, passing a final vote in the Senate to head toward the desk of Republican Gov. Greg Gianforte. House Bill 337, sponsored by Speaker of the House Brandon Ler, R-Savage, scales back the state's top-bracket tax rate over the next two years while extending a lower-bracket rate to higher incomes. It passed on near-party line votes, with support from all Republicans and opposition from nearly all Democrats. Advocating for the bill during a hearing before the Senate Taxation Committee on April 9, Ler argued the legislation would produce an income tax cut across the income spectrum. 'That means giving the populace more money and not having more money up here in state government,' Ler said. Opponents had worried that continuing to scale back income taxes, the state's primary revenue source, will eventually make it harder to cover the cost of public services. They also argued the lion's share of the savings will go to high-income earners. 'It doesn't target the Montanans who actually need it, who are the lower- and middle- income Montanans,' Senate Minority Leader Pat Flowers, D-Belgrade, argued as the bill was debated on the Senate floor April 18. According to the Montana Budget and Policy Center, a Helena think tank that typically advocates for progressive tax policy and opposed HB 337, about two-thirds of the bill's savings will go to the wealthiest 20% of taxpayers. Higher-income taxpayers also pay a greater share of state taxes under current law. According to figures from the Montana Department of Revenue, the highest earning 20% of individual taxpayers reported 64% of the state's taxable income and paid 70% of state income taxes collected in 2023. Gianforte has made repeated pushes to reduce the state's top-bracket income tax rate a centerpiece of his policy agenda since he took office in 2021 and has signed multiple rounds of Republican-backed income tax cuts that have reduced that rate from 6.9% to the current 5.9%. He routinely argues that lower income taxes will bolster Montana's economy by making it a more competitive destination for entrepreneurs. The Ler bill implements a slightly smaller cut than the one initially included in Gianforte's pre-session budget proposal, which would have implemented a phased cut to the top-bracket tax rate, ultimately reducing it 4.9%. A fiscal analysis concluded that proposal would have reduced state revenues by about $304 million a year by 2028. Instead, Ler's proposal would drop the top-bracket rate to 5.65% in 2026 and then 5.4% in 2027, also phasing in the cut. Unlike the Gianforte proposal, it would also apply a current lower-bracket 4.7% rate to higher incomes, raising the threshold where that lower marginal rate is replaced with the top-bracket one from $21,000 to $47,500 for individual taxpayers. That threshold is doubled for married couples who file joint tax returns. For an individual filer earning $50,000 a year and claiming a $15,000 standard deduction — therefore with $35,000 in taxable income — the Ler bill would result in $167 in annual savings once fully implemented, according to MTFP calculations. For an individual filer earning $200,000 a year and taking that same standard deduction, the annual savings would be $1,004. The Gianforte proposal, in comparison, would have saved that $50,000 taxpayer slightly less, $139 a year and that $200,000 taxpayer substantially more, $1,639 a year. The Ler bill also includes a portion of the governor's proposal that would expand a state Earned Income Tax Credit available to lower-income working families starting next year, doubling it from 10% to 20% of an analogous credit available in the federal tax system. That increase would represent a relatively small share of the bill's overall price tag, about $38 million a year. Other major income tax bills proposed this session have stalled. Senate Bill 323, brought by Sen. Josh Kassmier, R-Fort Benton, to implement the governor's proposal, stalled in its initial Senate committee earlier this month. Another major income tax cut bill, Billings Republican Sen. Mike Yakawich'sSenate Bill 203, passed the Senate but was tabled by the House Taxation Committee on April 16. Income taxes are the major source of funding for Montana's state government. Montana property tax collections, in comparison, almost exclusively flow to fund local services. ___ This story was originally published by Montana Free Press and distributed through a partnership with The Associated Press.
Yahoo
22-04-2025
- Business
- Yahoo
Compromise legislation cutting income taxes headed to governor's desk
Gov. Gianforte, Grover Norquist speaking about income tax cuts during a press conference at the State Capitol on Jan. 30, 2025. (Courtesy photo) Tax breaks could soon be coming to Montanans, but not in the form of property tax relief — at least not yet. Instead, the Montana Legislature on Friday passed a bill cutting income taxes and increasing the earned income tax credit, sending the measure to the governor's desk. House Bill 337, sponsored by Speaker of the House Rep. Brandon Ler, R-Savage, ended up as a compromise between the governor's preferred plan for the largest tax cut in state history and a middle-class tax cut preferred by a more conservative wing of the GOP and some Democrats. Under current Montana income tax laws, there are two tax brackets for regular income — a 4.7% bracket and a 5.9% bracket — which splits at $21,100 for single filers and $42,200 for joint filers. The new system would increase the threshold for the lower tax rate during the next two tax years so that single filers would pay the 4.7% rate on their first $47,500 in 2026, and $65,000 in 2027. For joint filers, they would pay 4.7% on their first $95,000 of income in 2026 and on the first $130,000 in 2027. Above those thresholds, taxpayers would pay a top tax rate of 5.65% in 2026 and 5.4% in 2027. The increased income threshold would also apply to long-term capital gains income, which is taxed at 3.1% and 4% rates. 'Montanans work hard for their money, and HB 337, ensures they keep more of it—now and in the future. HB 337 delivers real, meaningful income tax relief for working families across our state,' Ler said in a press release following the Senate vote. The bill also increases the Earned Income Tax Credit from 10% of the federal EITC to 20%. The Senate passed the bill without any amendments from the upper chamber on Friday to expedite its path to the governor's desk. All Senate Republicans supported the bill, while all Democrats opposed it due to the cost of lowering the top tax rate. Sen. Dave Fern, D-Whitefish, said he wants to see taxes as low as possible. However, while he was campaigning for office, he said he didn't hear anyone asking for income tax cuts. With property tax relief still left to be hammered out by the Legislature — which Fern said he was expecting to be a costly endeavor — spending more money on income tax cuts is not the direction he wants the chambers to take. According to the bill's fiscal note, the income tax breaks will decrease the state's general fund collections by $20 million during the 2026 fiscal year; $190 million during 2027 and increasing to $277 million by 2029. '$277 million is a little bit too much,' Fern said. 'I'm going to oppose this bill because I think that it's well meaning, but it's just too expensive.' The compromise bill costs roughly $40 million per year less than the governor's preferred plan starting in 2027. Gov. Greg Gianforte has long touted his plan to bring about the largest income tax cut in state history by cutting the top income rate — which most Montanans are subject to — by a full percentage point over the biennium, and pairing that with an increase of the EITC to 15% to target lower-income residents. However, his plan met resistance in the Legislature. A plan backed by Senate President Matt Regier, R-Kalispell, and more conservative Republicans in the Senate, would have kept the top rate in place, but greatly expand the threshold where the top rate would kick in — by more than twice what Ler's bill did. Another bill, introduced by Democrats, would have created an income-based tax credit targeting exclusively the lower and middle-income taxpayers. Both bills were tabled in the House Taxation Committee earlier this month. Sen. Greg Hertz, chairman of the Senate Taxation Committee, previously criticized the governor's plan because it 'started at the top.' But he called HB 337, as a compromise, 'a good bill for everyone.' The final income tax package seems to appease all factions in the government — by reducing the top rate and increasing the EITC as the governor wanted, while targeting middle-class Montanans, as was the target of Democrats and conservative Republicans. But the governor, who has spoken extensively about the desire to deliver a larger tax cut for Montanans, still has the final say. 'I still believe our income tax cut is the most conservative proposal before the Legislature, reducing the tax that most Montanans pay, benefiting Montanans at every single income level,' Gianforte said at a press conference last Thursday, before HB 337 had passed the Senate. 'While I know there's a lot of different ideas out there, we must keep this principle at the top of our minds. The money belongs to the people of Montana and not the government.' The governor's office did not respond to questions about whether Gianforte supports the compromise bill or will sign it.
