January 13, 2015


State & Local Taxes in 2015


Montana Tax Code Features

Progressive Features

• Graduated personal income tax structure

• No statewide sales tax

• Provides a refundable property tax “circuit breaker” credit

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• Provides an income tax deduction for federal income taxes paid

• Provides an income tax credit based on capital gains income

• Fails to provide a refundable Earned Income Tax Credit (EITC)

• Fails to provide refundable child tax credit

Tax Changes Enacted in 2013 & 2014

• Reduced property taxes on business equipment

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Montana has the 47th most unfair state and local tax system in the country. States with regressive tax struc­tures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Appendix B for state-by-state rankings and more details).

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