Senate Bill No. [insert bill number] proposes to increase the class eight business equipment tax exemption and introduces several key changes to the existing tax framework. Notably, the bill stipulates that the business equipment exemption will be adjusted annually for inflation and establishes that business equipment with a cost of less than $500 will be exempt from taxation. Additionally, the bill amends Sections 15-1-123 and 15-6-138 of the Montana Code Annotated (MCA) to provide definitions and clarify the reimbursement process for local governments and tax increment financing districts under the entitlement share program.

The bill also outlines the reimbursement mechanism for local governments affected by the tax rate reductions and increased exemption amounts, ensuring they receive compensation for lost property tax revenue. The reimbursement growth rate is set at one-half of the average inflation rate for the previous three years for certain calculations, while other reimbursements will not be subject to growth. The changes are set to take effect for tax years beginning after December 31, 2025, thereby allowing for a transition period for local governments and businesses to adapt to the new tax structure.

Statutes affected:
LC Text: 15-1-123, 15-6-138
SB0322_1(1): 15-1-123, 15-6-138
SB0322_1(2): 15-1-123, 15-6-138
SB0322_1(3): 15-1-123, 15-6-138
SB0322_1(4): 15-1-123, 15-6-138
SB0322_1(5): 15-1-123, 15-6-138
SB0322_1: 15-1-123, 15-6-138
SB0322_2(1): 15-1-123, 15-6-138
SB0322_2(10): 15-1-123, 15-6-138
SB0322_2(11): 15-1-123, 15-6-138
SB0322_2(12): 15-1-123, 15-6-138
SB0322_2(13): 15-1-123, 15-6-138
SB0322_2(2): 15-1-123, 15-6-138
SB0322_2(3): 15-1-123, 15-6-138
SB0322_2(4): 15-1-123, 15-6-138
SB0322_2(5): 15-1-123, 15-6-138
SB0322_2(6): 15-1-123, 15-6-138
SB0322_2(7): 15-1-123, 15-6-138
SB0322_2(8): 15-1-123, 15-6-138
SB0322_2(9): 15-1-123, 15-6-138
SB0322_2: 15-1-123, 15-6-138
SB0322_3(1): 15-1-123, 15-6-138
SB0322_3(2): 15-1-123, 15-6-138
SB0322_3: 15-1-123, 15-6-138