This bill proposes to reduce income tax rates specifically for income derived from manufacturing in Montana. It amends existing tax code sections, including 15-30-2103 and 15-31-121, to introduce new tax brackets for net income from manufacturing. The new tax rates will be set at 2.7% for the first $41,000 of net income from manufacturing for married individuals filing jointly, with a rate of 3.9% applied to any income exceeding that threshold. Similar rates are established for heads of households and individual taxpayers, with adjustments based on their respective income brackets. Additionally, the bill clarifies the definition of "manufacturing" to include the mechanical, physical, or chemical transformation of materials into new products, as well as the assembly of component parts.

Furthermore, the bill modifies the corporate tax rate for net income from manufacturing, setting it at 5.75% for the tax period. It also includes provisions for annual adjustments to tax brackets based on inflation. The changes outlined in the bill will take effect for income tax years beginning after December 31, 2025. Overall, the legislation aims to incentivize manufacturing in Montana by lowering tax burdens on businesses and individuals engaged in this sector.

Statutes affected:
LC Text: 15-30-2103, 15-31-121