Montana Senate Republicans back governor’s flat income tax plan

Republican leaders in the Montana Senate will back Gov. Greg Gianforte’s push for the state to have a single, flat income tax rate during the 2027 session. 

In a press release on Monday, Senate President Matt Regier, R-Kalispell, announced he officially requested a draft bill titled “Lower Montana state income tax rate” to match Gianforte’s goal for his final session as governor. 

“Gov. Gianforte has made it abundantly clear that getting Montana to a flat income tax rate is best for our great state. We’re committed to delivering that major conservative policy win that will keep more money in the pockets of Montana families,” Regier said in a statement. “Republicans have long recognized that flat tax rates are the simplest and most fair version of taxation, rather than so-called ‘progressive’ tax policies that punitively target different citizens.” 

Since his election in 2020 — becoming the first Republican governor of Montana in 16 years — Gianforte has made lowering the state’s top income tax bracket a priority. 

At least one Democrat views the move as “reckless” given state budget needs, but the move seems to be uniting some Republicans who have been at odds on state budget policies in the past. In 2025, Republican Sen. Josh Kassmier ran a governor-backed bill that sought a more aggressive tax cut, down to 4.9%, but a divided Republican caucus was unable to unite behind it. 

“I’m happy to see leadership get behind a flat tax rate after they killed it last session,” said Kassmier, who has also requested similar bill draft titles for 2027. “Hopefully leadership will support the bill no matter who sponsors it.”

During his first legislative session in 2021, Gianforte pushed legislation to simplify the state’s tax brackets from seven to just two, with the top bracket at 6.75%. 

Each subsequent Legislature has voted to reduce the top tax bracket further — to 5.9% in 2023, and to 5.4% in 2025. The lower tax bracket, for single filers earning up to $65,000 or joint filers up to $130,000, is 4.7%

Gianforte wants all Montanans to pay 4.7%, calling a flat tax rate the “best policy around,” at an event with conservative think tank Mountain State Policy Center earlier this year. 

Previous cuts to the state’s income tax bracket were anticipated to cause a decrease in revenue, first evident during the 2025 fiscal years, according to the state Department of Revenue.
But in a report published last month, the department indicated that income tax revenue grew at a rate of 4.1%, instead of declining by an expected 1.7%. 

An projected analysis of future state revenue based on the governor’s 4.7% flat tax rate goal, which would take effect by 2028, could lead to a decrease in revenue by an estimated $130 million annually, according to the report, but revenue is expected to grow modestly from 2029 onward. 

“We’ve simplified and cut income taxes in every legislative session since 2021, enabling Montanans to keep more of their hard-earned money,” said Republican Sen. Greg Hertz, who leads the Senate Taxation Committee. “During that time, the state’s economy and wages have continued to grow and state revenue has continually outpaced projections, allowing us to further reduce taxes and now to move to a flat income tax.” 

Part of the push for a low, flat tax rate for Montana is to bolster the state’s appeal compared to its neighbors. 

Idaho has a top tax rate of 5.69%, while North Dakota is among the nation’s lowest at 2.5%. Both Wyoming and South Dakota do not collect state income tax. 

However, Montana is one of just four states without a sales tax, which means Montana lawmakers have to balance out lowering income taxes with not having another revenue source to fund state government. 

Americans for Prosperity-Montana applauded the Senate Leadership’s tax reform proposal as treating all Montanans “equally under the law.”

“Government should never punish success or pick winners and losers through the tax code,” said AFP-MT director Jesse Ramos in a statement. 

Regier’s draft bill to lower income taxes is supported by all members of Senate Republican leadership, according to the press release. . 

But Democrats are likely to oppose legislation that further reduces taxes on higher-earning Montanans. 

The bill that saw income taxes lowered in 2025 passed both houses of the Legislature nearly along party lines, with no Democrats in the House supporting it and just two Democrats getting behind the legislation in the Senate, Sens. Jonathan Windy Boy of Box Elder and Shane Morigeau or Arlee. 

Sen. Mary Ann Dunwell, a Democrat from Helena, said Republicans in the Legislature have chipped away at the top tax rates for decades, and there is no need to go to a flat tax rate. 

“We’ve done enough damage,” she told the Daily Montanan. “A flat tax rate is super regressive. And I would go so far as to say it’s already pretty flat if you look at the effective tax rate.”

An effective tax rate includes taxes on unearned income such as investments, and Dunwell said that since higher earners tend to have more money from those sources, taxed at a lower rate than regular income, it flattens out the brackets. 

Plus, there have been concerns about Montana’s budget, including shortfalls at the Department of Public Health and Human Services, which led to the cancellation of a 3% Medicaid provider rate increase the Legislature approved last session. 

“There are places we need that money — not just that we would use it, but where we need it,” Dunwell said. “A flat tax is a reckless move when we have all these needs Montanans have.”