October 17, 2018

Montana: Who Pays? 6th Edition


MONTANA

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MONTANA STATE AND LOCAL TAXES

Taxes as Share of Family Income

Top 20%
Income Group Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next
15%
Next
5%
Top
1%
Income Range Less than
$18,000
$18,000 to
$35,800
$35,800 to
$56,500
$56,500 to
$92,200
$92,200 to
$185,400
$185,400 to
$448,500
over
$448,500
Average Income $9,700 $26,800 $42,800 $73,600 $123,200 $261,900 $1,126,400
Sales & Excise Taxes 2.1% 1.7% 1.2% 0.9% 0.6% 0.3% 0.1%
General Sales – Individuals 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Other Sales & Excise – Ind. 1.7% 1.4% 0.9% 0.7% 0.4% 0.2% 0.1%
Sales & Excise on Business 0.4% 0.3% 0.3% 0.2% 0.1% 0.1% 0.0%
Property Taxes 5.3% 3.5% 3.0% 2.6% 2.4% 2.0% 1.6%
Home, Rent, Car – Ind. 4.6% 2.9% 2.5% 2.1% 1.9% 1.2% 0.4%
Other Property Taxes 0.7% 0.6% 0.6% 0.5% 0.5% 0.8% 1.2%
Income Taxes 0.5% 1.0% 2.8% 3.1% 3.9% 3.8% 4.8%
Personal Income Tax 0.4% 1.0% 2.8% 3.1% 3.8% 3.7% 4.7%
Corporate Income Tax 0.0% 0.0% 0.1% 0.0% 0.1% 0.1% 0.1%
TOTAL TAXES 7.9% 6.3% 7.1% 6.6% 6.9% 6.1% 6.5%

Individual figures may not sum to totals due to rounding. Download the table

TAX FEATURES DRIVING THE DATA in Montana

Progressive Features

Regressive Features

  • Graduated personal income tax structure
  • No statewide sales tax
  • Provides a refundable Earned Income Tax Credit (EITC)
  • Provides a refundable property tax “circuit breaker” credit via the personal income tax
  • Requires the use of combined reporting for the corporate income tax
  • Comparatively low EITC
  • Provides an income tax deduction for federal income taxes paid
  • Provides an income tax credit based on capital gains income
  • Does not levy a tax on estates or inheritances

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Montana’s state and local tax system does not worsen income inequality and ranks 43rd on the index. The large income gap between lower- and middle-income taxpayers, as compared to the wealthy, is somewhat narrower after state and local taxes than before. (See Appendix B for state-by-state rankings and the methodology for additional detail on the index.)

Note: Figures show permanent law in Montana enacted through September 10, 2018, at 2015 income levels. Top figure represents total state and local taxes as a share of non-elderly income. The sixth edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.