Reform Eliminates Tax Burden for 5,000 Small Businesses
At Hoven Equipment Company,c Governor Greg Gianforte and Representative Josh Kassmier, R-Fort Benton, celebrated recent reforms to the business equipment tax which permanently eliminate the tax for more than 5,000 small businesses, farms, and ranches.
“Taxing critical business equipment makes it harder to grow a small business and is a wet blanket on job creation,” Gov. Gianforte said. “With hardworking Montanans in mind, we prioritized and secured historic business equipment tax relief, eliminating this tax burden for more than 5,000 Montana small businesses.”
Gov. Gianforte praised Rep. Kassmier, the sponsor of the new law, saying, “I appreciate Rep. Kassmier for championing these reforms so small business owners can grow their operations and create more good-paying Montana jobs.”
Proposed by the governor in his Budget for Montana Families and signed into law in March 2023, Rep. Kassmier’s House Bill 212 cuts taxes for Montana’s small business owners, family farmers, and family ranchers by expanding the business equipment tax exemption from $300,000 to $1 million.
“Montana small businesses, farms, and ranches have been burdened by the business equipment tax for too long,” Rep. Kassmier said. “By raising the business equipment tax exemption to $1 million, small businesses across Montana will be able to save money, invest in their businesses, and be more competitive. I thank Gov. Gianforte for making meaningful tax relief a top priority.”
In 2021, the governor worked with Rep. Kassmier to increase the business equipment tax exemption from $100,000 to $300,000.
Taken together, these reforms eliminate the business equipment tax burden for more than 5,000 small businesses, farms, and ranches.
Montana’s business equipment tax requires businesses, including family farms and ranches, to reallocate resources they would otherwise invest in their operation and create jobs with to pay a tax on the equipment and machinery they need to operate.
The business equipment tax also imposes a costly compliance burden, with businesses required to inventory and report their equipment to the state each year.
Reducing the burden of the business equipment tax on Montanans, Rep. Kassmier’s new law encourages business investment and promotes job creation.
During the press conference, small business owners and agricultural producers praised the recent reforms.
Klayton Lohr, treasurer for the Montana Grain Growers Association, said, “I’m a small farmer southeast of Shelby, and this business equipment tax being raised to a million dollars in exemption is huge for me – being a small operator, that will encompass most of my equipment.”
Praising the governor and Rep. Kassmier, Cyndi Johnson, state president of Montana Farm Bureau Federation, added, “We really appreciate all of your work on behalf of Montana farmers and ranchers. This effort of yours to lower business equipment tax is right in line with the Montana Farm Bureau policy down the line.”
Finally, Brian Hoven, owner of Hoven Equipment Company, said, “It takes investment to create jobs, and that’s what the governor’s done. He’s put more money in the pockets of job creators that have the opportunity to create jobs.”
With locations in Lewistown and Great Falls, Hoven Equipment carries new and used farm and construction equipment.