Gov. Greg Gianforte said Wednesday that boosting exemptions from taxes on equipment will be one of his priorities during the next legislative session.
Speaking at an agricultural equipment dealership in Kalispell, the governor called for further cuts in Montana’s business equipment tax by raising the tax exemption level. In 2021, Gianforte signed a bill that would increase the tax exemption from $100,000 to $300,000, meaning owners of equipment worth up to $300,000 would not be taxed. The legislation affects approximately 3,400 businesses in the state.
The governor said additional reforms were needed to ease the burden of simply owning equipment.
“The result is that investment in equipment like this is discouraged, and investment in jobs in Montana is not encouraged,” he said of the tax’s impact on businesses.
Gianforte spokeswoman Brooke Stroyke said the governor’s office had not proposed a new exemption level and was still processing the numbers. The governor plans to roll out more policy priorities in the coming year, she said.
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Gianforte campaigned to reform Montana’s tax code and cut taxes. Last year, he signed new laws that lowered the state’s top income tax rate and created new lower tax brackets starting in 2024.
On Wednesday, he touted the state’s economy’s seventh-highest GDP growth in the nation.
The governor was joined on Wednesday by several Republican lawmakers and equipment industry representatives.
“Republican lawmakers broadly support tax cuts for Montana businesses and are excited to hear more about the good work the governor is proposing to reduce taxes on business equipment in the 2021 Legislative Session,” Legislative Republican Spokesperson Kyle Schmer Kyle Schmauch said.
Senate Minority Leader Jill Cohenour said Democrats look forward to seeing financial reports on this proposal and others that Gianforte is expected to present in the next session, while pursuing their own priorities.
“As Democrats, our top priorities on the tax front are meaningful property tax breaks and making sure the super-rich pay their fair share,” she said. “Montana tax policy should benefit everyday Montanas in Montana and small businesses across the state. Unfortunately, so far, the Governor has been focused on helping big corporations and the wealthy.”
House Bill 303, which increases the tax exemption to $300,000 in 2021, is expected to reduce annual tax revenue from about $4.4 million initially to $6.6 million in fiscal 2025, according to fiscal analysis provided by the Montana Department of Revenue in 2021. . The legislation uses funds from the state general fund to compensate local governments for lost property tax revenue.
The state’s current surplus is projected at $1.7 billion heading into its next session.
Tom Kuglin is Associate Editor of the National Bureau of Lee’s Newspapers. His reporting focuses on the outdoors, recreation and natural resources.