Gianforte announced the pressure to reduce the business equipment tax again

In an appearance Wednesday, the first in a series of events announcing policy priorities for next year’s legislative session, Gov. Greg Gianforte said he wants to raise Montana’s business equipment tax exemption limit.

Speaking at a John Deere dealership in Kalispell, surrounded by businessmen and Republican lawmakers, Gianforte said the move was meant to encourage industry leaders to invest in equipment that could help boost the state’s economy.

“Ultimately, this is not government money. It’s hard-earned Montanans’ money,” the governor said.

Gianforte, a Republican, did not say directly what new cap he plans to seek, or elaborate on how much the shift would reduce state collections. “I’m proud to be here today to support Gov. Gianforte’s proposal to increase the personal property tax exemption from $300,000 to $1 million,” said Brad Griffin, board president of the Montana Realtors Association, a speaker at the event.

The governor’s office declined to confirm Wednesday afternoon whether the $1 million was actually what he intended.

“We’re still crunching the numbers and don’t have specifics to report, but we’ll let you know when we do,” Gianforte press secretary Brooke Strike said in an email. Griffin did not specifically answer a follow-up question asking for clarification on whether or not she accurately represented the governor’s intentions.

If approved by the state Legislature next year, the change would lower taxes that large Montana businesses pay on equipment such as excavators, threshers and brewing gases. Gianforte signed a bill last year that raised the exemption amount from $100,000 to $300,000.

“We’re going to cut taxes again,” Gianforte said Wednesday, pitching the proposal as a way to provide Montanans with “permanent, long-term tax relief.”

Small businesses valued below the current $300,000 threshold are exempt from paying the equipment tax and, in most cases, from reporting the value of their equipment to the state Department of Revenue.

The equipment tax is similar to the residential property taxes paid by Montana homeowners, except that the assessment is based on the market value of the equipment owned in excess of the exemption threshold.

Under current law, the first $6 million of business-owned equipment is taxed at 1.5%, and additional equipment is taxed at 3%.

The state’s corporate income tax rate was as high as 12 percent in the 1980s, but has fallen sharply in recent decades under Republican and Democratic administrations under bills that cut the tax rate and increased exemptions.

Democratic Senate Minority Leader Jill Cohenor, D-East Helena, said in a statement Wednesday that the caucus is waiting to review the resolution’s fiscal memo and review it with other tax proposals. She also accused the governor’s tax policy of being too favorable to big businesses.

“As Democrats, our priorities on taxes are meaningful property tax relief and making sure the super-wealthy are paying their fair share,” she said. Montana’s tax policy should benefit everyday Montanans and small businesses across the state. Unfortunately, the governor has so far focused on helping big corporations and the wealthy.

Gianforte has drawn calls from Democrats and some Republicans to use the state’s large budget surplus for tax cuts, particularly aimed at individuals who feel the state’s cost of living, particularly around housing. As part of a list of legislative priorities released in July, Democrats called for a $250 million property tax relief effort. Some Republican lawmakers have raised the idea of ​​discount checks.

This story was published by the Montana Free Press as part of the Long Streets Project, an in-depth report on Montana’s economy. This work was supported in part by a grant from the Greater Montana Foundation, which promotes communication on issues, trends and values ​​important to Montanans. Discuss MTFP’s Long Streets work with Chief Correspondent Eric Dietrich at editrich@montanafreepress.org.