Governor Gianforte Supporting 4.7% Flat Income Tax for Montana Taxpayers

Governor Greg Gianforte's proposal to make Montana's individual income tax a flat 4.7 percent could have a relatively small effect on many lower- and middle-income taxpayers, while producing larger savings for people with higher taxable incomes.

That's because Montana's tax system is already scheduled to have a 4.7 percent rate on the first $65,000 of taxable income for single filers in 2027.

The rate above $65,000 is scheduled to be 5.4 percent.

For married couples filing jointly, the 4.7 percent bracket will extend to $130,000.

Valley County's median household income was about $71,700 in 2024, according to Census data.

But that doesn't mean the typical Valley County household would save money under the proposal. Household income is different from taxable income, and filing status and deductions also affect the final tax bill.

As an example, if a single Valley County taxpayer had $71,695 in taxable income, the proposed flat tax would save that taxpayer roughly $47 a year compared with the scheduled 2027 rates.

Someone with $200,000 in taxable income would save about $590.

At $500,000, the savings would be about $2,690.

And at one million dollars of taxable income, the savings would be about $6,190.

The bigger question is what the proposal would mean for Montana's budget.

Governor Gianforte and supporters say lowering the rate could encourage economic growth. The governor's office cites an economic analysis projecting about $525 million in additional economic output and more than 2,400 additional jobs.

The proposal would also mean less individual income-tax revenue for the state, making the overall budget impact an important issue for lawmakers to consider when they meet in 2027.

The Montana Legislative Fiscal Division estimates a 4.7 percent flat tax could reduce state individual income tax collections by up to $130 million a year by fiscal year 2029.

Gianforte is making the 4.7 percent flat tax one of his priorities for the upcoming legislative session.