Personal income tax
Montana's income tax system covers seven income brackets:
- 1 percent on the first $2,700 of taxable income.
- 2 percent on taxable income between $2,701 and $4,800.
- 3 percent on taxable income between $4,801 and $7,300.
- 4 percent on taxable income of $7,301 and $9,900.
- 5 percent on taxable income of $9,901 and $12,700.
- 6 percent on taxable income of $12,701 and $16,400.
- 6.9 percent on taxable income of $16,401 and above.
Montana tax returns are due April 15 or the next business day if that date falls on a weekend or holiday.
Effective Jan. 1, 2008, royalty payments made to owners of Montana mineral rights are subject to state income tax withholding if certain thresholds are met. This amount is in addition to production taxes that also are taken out of royalty payments.
Sales taxes
Montana has no sales tax at either the state or local levels.
It does, however, allow for resort and local option taxes as a funding source for some communities. The fundamental idea behind resort taxes is to allow places with high numbers of visitors, but relatively few residents, to local infrastructure costs without overburdening local citizens. The maximum rate of the resort tax is 3 percent and at least 5 percent of the revenue must offset property taxes.
Personal and real property taxes
The Property Assessment Division of the Montana Department of Revenue is responsible for administering Montana's property tax laws, including the valuation and assessment of real and personal property throughout the state for property tax purposes.
In Montana, household goods are exempt from property taxes. However, property taxes are assessed on farm machinery, heavy equipment, automobiles, trucks and business equipment. Per capita fee also is collected on livestock.
The amount of property tax owed is not determined solely by the property's value. The property's value is multiplied by a tax rate, set by the Montana Legislature, to determine its taxable value. The taxable value is then multiplied by the mill levy established by various taxing jurisdictions -- city and county government, school districts and others.
A wide variety of property is exempt from taxation.
Montana property owners can have their property taxes reduced if they meet certain qualifications.
Inheritance and estate taxes
Montana's inheritance tax was repealed on Dec. 31, 2000.
Montana's estate tax is equal to the maximum credit allowed against the federal estate tax. Since federal tax-law changes have eliminated the state credit for deaths occurring in 2005, no Montana estate tax is imposed and no estate tax return is required for deaths occurring after Jan. 1, 2005.
Other Montana tax facts
Montana offers its residents several ways to contribute to nonprofit groups with tax form checkoffs.
Free filing of state forms is available to some Montana residents at Montana Free File.
Montana does not assess tax on intangible personal property.