This bill proposes significant revisions to Montana's income tax structure, primarily aimed at lowering tax rates and increasing the income thresholds for higher tax brackets. Key changes include raising the income thresholds for various filing statuses: for married individuals filing jointly, the threshold increases from $41,000 to $140,000; for heads of households, from $30,750 to $105,000; and for individuals, from $20,500 to $70,000. Additionally, the highest income tax rate is reduced from 5.9% to 5.65% for all categories of taxpayers. The bill also amends the tax brackets for net long-term capital gains, with similar increases in thresholds and a reduction in the highest rate.

The bill includes provisions for the implementation of a modified inflation factor for tax brackets, which will not take effect until tax year 2028. It establishes specific effective dates for different sections of the bill, with the first section becoming effective on January 1, 2026, and the second section on January 1, 2027. Notably, Section 1 will terminate on December 31, 2026, indicating a temporary adjustment to the tax structure. Overall, the bill aims to provide tax relief to Montanans by revising income tax brackets and rates.

Statutes affected:
LC Text: 15-30-2103
HB0337_1: 15-30-2103