Montana Tax Information

Recent Information On Montana Taxes

The States of Montana…Oregon, New Hampshire, Alaska, Delaware have no Sales Tax

The information below is NEITHER official State of Montana or Internal Revenue Service (IRS) information and cannot be cited as a final authority. 

The Index compares the states in five areas of taxation that impact business:

1. Corporate Taxes
2. Individual Income Taxes
3. Sales Taxes, Unemployment Insurance Taxes
4. Taxes On Property, including residential and commercial property. Neighboring states ranked as follows: Idaho (31st), Wyoming (1st), North Dakota (30th), and South Dakota (2nd).

Tax Foundation US Sales Taxes by State
Tax Foundation US Sales Taxes by State

Montana’s Corporate Income Tax System

2016: Montana’s corporate tax is a flat rate of 6.75% for all corporate income. Montana’s rate ranks 28th highest nationally, among states collecting corporate an income tax. In 2006, per capita state-level corporate tax collections, minus local taxes, were $162.68, ranking Montana 18th highest nationally.

2016 United States Income Tax Rates by State
2016 Income Tax Rates by State

Montana’s Individual Income Tax System

2016: Montana’s personal income tax system is comprised of seven separate tax brackets, from 1% to 6.9%, with the highest rate at 6.9% for income levels above $17,400.

In 2007, Montana ranked 15th highest among states levying individual income taxes.

In 2005, Montana’s individual income tax collections averaged $763 per person, ranking Montana 26th highest nationally.

Photo Facts on Montana’s Tax Climate from The Tax Institute
Facts on Montana’s Tax Climate from The Tax Institute

Montana’s State/Local Tax Burden Is Well Below National Average

Estimated at 8.6% of income, Montana’s state and local tax burden percentage comes in at 40th nationally, which is significantly below the national average of 9.7%.

In 2007, Montana taxpayers paid $3,158 per capita in local and state taxes. From 1977 to 2007, Montana had dropped 22 places, due mainly to maintaining a zero rate on general sales.

Montana Property Taxes Are Modest

Montana is one of 37 states levying both state and local property taxes. As in the majority of states, local governments collect substantially more. Montana’s local governments collected $774,842,000 in property taxes in fiscal year 2004. Unlike most other states, Montana collects significant property taxes, for instance collecting $183,937,000 during Fiscal year 2002, which adds up to a combined state/local property tax collection of $958,779,000, or $1034 per capita, ranking Montana 20th nationally.

2017 State Business Tax Climate Index
Montana #6: 2017 State Business Tax Climate Index

Federal Tax Burdens and Expenditures: Montana the “Beneficiary State”

Per dollar of federal taxes paid, Montana taxpayers receive more federal funding compared to the average state. Per dollar of federal tax collected in 2005, Montana citizens got back approximately $1.47 of federal spending, ranking the state 11th highest nationally. This represents a slight increase from the 1995 level, which was 6th nationally, and at which time Montana received $1.46 per dollar of taxes in federal spending.

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