Most Montana families and businesses lawfully pay the taxes they owe, and in the process they help fund public education, infrastructure, public health, and job training programs that move our economy and our communities forward. Unfortunately, not all taxpayers are paying the money they owe, and the result is less funding for the public structures and services that drive growth and recovery.
The Department of Revenue has estimated that the state has a tax gap of $312 million. The tax gap is the difference between the amount of tax legally due in a given year and the amount that taxpayers voluntarily pay in a timely manner. Recently, the Department of Revenue has substantially improved audit collections. However, in order to further close the tax gap and raise needed revenue for public services, additional tools are needed. By implementing these tools, Montana can improve tax compliance, maintain a system where everyone plays by the same rules, and raise revenue for essential public services, simply by enforcing our current tax laws.
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.