Josh Margolis - NBC Montana - Mar. 25, 2025
HELENA, Mont. — Legislators are taking up a bill that would provide an income tax credit to long-time residents of the Treasure State.
House Bill 839 has nine Republican sponsors and had its first hearing on Tuesday in the House Taxation Committee.
The legislation provides a $500 credit for taxpayers who have resided in the state for 10 years and have an annual income of less than $100,000. A taxpayer must have resided in Montana for at least seven months of each year to qualify.
The sponsor says it is a simple way to help Montanans facing the burden of rising costs, while opponents say it is constitutionally dubious and would complicate the tax code.
“We’ve all seen how rising property values and taxes, inflation, and out-of-state money are putting pressure on long-time residents. This bill doesn’t solve that in its entirety, but it does send a clear message that if you’ve invested in Montana, Montana will invest in you,” said State Rep. Lukas Schubert (R-Kalispell), lead sponsor of HB 839. “This credit is fiscally conservative in its design. It’s non-refundable. It’s not a blank check, it doesn’t create any dependency. It’s a modest tax break that encourages personal responsibility and commitment to our state. This is how we protect Montana values, by standing up for the people who live them every day.”
“One of our tax principles is equity and fairness. We define that as similarly situated taxpayers should be taxed similarly. This bill would provide a benefit to one group of taxpayers, whereas similar taxpayers just by virtue of not being here quite long enough, would receive a different treatment,” said Allen Lloyd, executive director of the Montana Society of CPAs. “Our other concern related to that is our reading of this bill is if we had one of our young folks choose to go to another state for college and then move back home, they’ve got to start that clock back over and they wouldn’t get this benefit until they’ve been back here for 10 years.”
Also opposing the bill is the Montana Budget and Policy Center.
“I know Montanans are asking for property tax relief, perhaps even structural changes to that tax system. This income tax credit is not the solution,” said Rose Bender of the Montana Budget and Policy Center’s director of research.
A fiscal note has yet to be attached to the bill, but Schubert estimates monetary costs could be in the hundreds of millions of dollars.
“Don’t let that scare you because this is a tax reduction,” said Schubert. “This is taking the government tax burden off of the people of our state.”
A legal review note says it could violate the equal protection rights of newer citizens. The bill, which did not go up for a committee vote on Tuesday, would apply to tax years beginning in 2026.
Schubert says he’d like to amend the bill so that those who are married filing jointly with a combined income of under $200,000 would also qualify.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.