HELENA — Lawmakers heard first testimony Wednesday on a flagship property tax bill that would essentially shift property taxes away from primary residences, long-term rentals and small businesses.
Rep. Llew Jones, R-Conrad, is carrying House Bill 231, which is the so-called “homestead” bill championed by Gov. Greg Gianforte’s office. Jones said about 230,000 homeowners would see a 17% reduction in taxes on their primary residences under the bill.
The burden would then fall on properties like vacation homes and short-term rentals, which would see a 53 percent increase — a hike Jones justified with what he called the “significant likelihood” that their often out-of-state owners do not contribute to Montana income tax, and therefore limit the support of state services.
“Well, who cares? Right? They don't pay Montana income tax. If you look at what property tax is forecasted to bring in, it's $2.34 billion. If you look what income tax is forecasted to bring in, it's $2.55 billion,” Jones said.
The bill also includes an exemption to agricultural land, making sure those taxes are not affected by the shift.
But Rose Bender with the Montana Budget and Policy Center said HB 231’s relief is not targeted enough.
“ Currently, extremely high-value homes will see tax decreases that could be used as more significant tax reductions for more moderate value homes,” Bender said.
Other opponents said they worried the bill would make taxes for larger industries too high.
The bill is one of several in front of lawmakers this week aimed at relief for rising property taxes in Montana. The House Taxation Committee also heard from proponents and opponents on Wednesday on House Bill 213, which would lower the property tax rate for residential properties. A similar bill in the Senate, Senate Bill 189, hasn’t yet been scheduled for an initial hearing.
On Tuesday, the House Taxation Committee heard two Democrat-supported bills, one that would offer relief in the way of a tax credit for low-income homeowners and renters and another that would add a tiered structure to property tax. Meanwhile, in the Senate, lawmakers are considering Senate Bill 90, which would divert some income from taxes on lodging and rental cars to credits for property taxes on primary residences.
Clayton Murphy is a reporter with the UM Legislative News Service, a partnership of the University of Montana School of Journalism, the Montana Broadcasters Association, the Montana Newspaper Association and the Greater Montana Foundation. Murphy can be reached at clayton.murphy@umconnect.umt.edu.
