Montana ‘highly dependent’ on Income & Property Taxes
By Bob Pepalis,The Center Square
Montana’s favorable ranking for low taxes doesn’t mean that property owners aren’t concerned with taxes, according to the head of the Montana Taxpayers Association.
WalletHub recently ranked Montana third after Alaska and Delaware in its report on “States with the Highest and Lowest Tax Rates.” The state has a 7.11% median tax rate, which includes state and local taxes, according to the personal finance website.
“We’re highly dependent on income and property taxes. The property taxes are a concern to a lot of people,” Bob Story, executive director of the Montana Taxpayers Association, told The Center Square.
The nonpartisan group researches tax and government spending, and works with the public and private sectors to develop fair, equitable and predictable tax policies, according to its website.
The state has a corporate income tax. Businesses to some extent that are invested heavily in property and equipment as opposed to those mainly invested in personnel would be affected by the tax rates WalletHub measured, Story said.
“I don’t know how many businesses are really greatly concerned about income taxes in the state, as long as they’re not extremely out of the line,” Story said.
Businesses generally move more for aesthetic reasons unless they are involved in something like mining or heavy manufacturing that requires them to be in a specific location, he said.
People moving to Montana are driving home prices, Story added.
People moving to Montana have a significantly higher income than the average in Montana, according to a recent report by the Montana Legislative Fiscal Division.
“They’re buying houses as a sight-unseen case deal, and they’re just getting out of, getting away from wherever they were, and getting into a more rural area,” Story said.
The report said the growth of Montana’s population accelerated in calendar year (CY) 2020 and especially 2021.
“With these new individuals comes an increasing tax base, and if trends continue with those seen in CY 2019 and CY 2020, these new taxpayers will bring incomes typically larger than existing Montana residents, especially for those aged over 65,” according to the report.
A lot of people who moved to Montana keep their job because they can work over the internet and don’t have to be at their original location, Story said, noting that’s a big change in the economy that has an effect on the tax systems.