Hertz touts tax reductions passed by Legislature

The 2023 Montana legislature began its legislative session with an unprecedented surplus, mainly due to the over-collection of state taxes from Montana taxpayers. Since this is ultimately taxpayers’ money, I – along with other conservatives in the legislature – was determined to return money to Montana taxpayers and to reduce your taxes in the future.

Tax relief has long been an objective of mine, like in the 2021 session when I passed a bill that effectively moved Montana's standard deduction from $5,000 for a single person and $10,000 for a married couple to beginning in 2024 to $14,000 for a single person and $28,000 for a married couple. This change eliminated taxes for almost 100,000 low-income taxpayers in Montana and benefits all taxpayers with taxable income above the standard deduction. This change could result in savings of $600 for married taxpayers making $50,000 per year or more compared to what they may pay on their 2023 income.

This year we passed a bill to move the top marginal rate from 6.5% to 5.9% – this bracket starts at $20,500 of taxable income for single individuals and $41,000 for married couples, so anyone making $20,500/$41,000 or higher will benefit. Since taxes are paid as a percentage of your income, the more you make, the more you will save due to this tax-rate reduction.

This bill also raised the earned income tax credit from 3% of the federal amount to 10%. This may result in a refundable credit of $275 or more for low-income taxpayers with children.

I also passed Senate Bill 124, which will increase taxes on large, out-of-state corporations doing business in Montana who have very few employees or property in Montana. Large corporations like Amazon will now be required to pay their fair share of taxes in Montana. This will result in a state revenue increase of up to $17 million per year and save taxes for Montana based corporations that also do business in other states.

I, along with our GOP super majorities, passed legislation this year so that Montana resident taxpayers will receive a tax rebate of up to $1,250 for a single taxpayer and $2,500 per couple for married taxpayers. The rebate is equal to what you paid but cannot exceed the $1250/$2,500 amounts.

Also, a property-tax rebate of up to $500 will be coming to Montana resident taxpayers for taxes paid on their principal residence. No second homes or investment property are eligible for these rebates. Resident taxpayers may claim these rebates for both 2023 and 2024, resulting in property tax savings of up to $1,000.

Even with all these rebates and tax reductions, our legislature still has up to $1.5 billion to address many other issues in Montana. We have accomplished a great deal this session to lessen Montanans’ tax burden and plan to build on those successes in the final month of the 2023 legislative session.

Polson Senator Greg Hertz chairs the Senate Taxation Committee.