Gov. Greg Gianforte introduces his property tax reduction bill proposal during a town hall meeting Tuesday in Billings.
Gov. Greg Gianforte has signed a property tax relief package that passed last month through a Legislature that remained stubbornly divided on the matter.
House Bill 231 from Rep. Llew Jones, R-Conrad, and Senate Bill 542 from Sen. Wylie Galt, R-Martinsdale, create a system that will lower property taxes for primary homeowners and long-term rentals while eventually raising them on second homes and short-term rentals, large businesses and utilities.
After crushing tax increases struck Montana property owners in 2023, the governor's office and the state Legislature were under intense pressure to pass a relief package in some form. Gianforte, during his State of the State address in the session's second week, urged lawmakers to ferry his tax proposals through the session to his desk by mid-February in order for them to take effect in the current cycle. Instead, both bills passed in the final hours of the Legislature's last day on April 30.
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The package will deliver a $400 rebate this year for an estimated 240,000 primary residences. That's compared to the 2023 property tax rebates, which saw about 226,000 claimants approved.
The governor's office did not respond Friday evening to a request for comment on the bills' signing.
While the bills' proponents trumpeted the package as meaningful tax relief, the specter of litigation only grew as HB 231 and SB 542 drew closer to passing the Legislature. Some raised concerns about the effects on Billings and Sunburst, where the city charters would not interlock with the provisions of those bills, but instead could create a budget shortfall for both municipalities. Others said the bills had grown too far outside of their original titles, which could be unconstitutional.
Sen. Greg Hertz, the Republican chair of the Senate Tax Committee, has been a vocal critic of the bills.
"We now have the most complicated tax system in the United States, which required $4 million to be allocated to the Department of Revenue to implement the new law," he said in a text on Friday. "Various organizations and individuals, including myself, are looking into possible litigation of these bills and others."
Not all Republicans have rebuked the new tax scheme. In a Letter to the Editor last week, Jones -- the engineer behind the HB 231 -- and several moderate Republican and Democratic lawmakers heralded the packages' many provisions, including relief to small businesses and agricultural land.
"Nearly a quarter of Montana's residential home value is owned by non-residents who benefit from our infrastructure but pay no income tax," the letter reads. "To offset the permanent property tax rate relief we passed, vacation homes and short-term rentals will see higher tax rates so that primary residents who live, work and go to school here in Montana will see real relief without cuts to services."
Democrats, meanwhile, made up 35 of the 60 votes to get HB 231 over the finish line last month; said another way, the bill wouldn't have passed without Democratic support.
House Minority Leader Katie Sullivan last week called the property tax package imperfect but declared relief had been delivered.
"Over the next 18 months, Democrats will be holding the governor accountable to make sure everyone who qualifies for property tax relief gets money back in their pocket," she wrote in a May 10 column.
Seaborn Larson has worked for the Montana State News Bureau since 2020. His past work includes local crime and courts reporting at the Missoulian and Great Falls Tribune, and daily news reporting at the Daily Inter Lake in Kalispell.
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