Montana State Tax Guide for the Year 2025
Montana, known for its breathtaking landscapes and outdoor activities, offers a unique tax system that sets it apart from many other states. Here's a breakdown of the key aspects of Montana's tax system.
Firstly, it's worth noting that Montana does not have a statewide sales tax. However, some areas with populations under 5,500 might impose a resort tax. When it comes to fuel, the tax rate for gasoline is 27 cents per gallon, and for diesel, it's 28 cents per gallon.
In terms of property taxes, Montana's average effective property tax rate is 0.6%, according to the Tax Foundation. Property taxes are generally lower than in many other states, and Montana cites the rate as a percentage of the property's assessed value, rather than an absolute amount. Property taxes in Montana are also subject to rebates and other relief for homeowners, as detailed in related articles.
Montana taxes Social Security retirement benefits, but the amount taxed may differ from the federal taxable amount. Pensions, 401(k) and IRA distributions are also taxable in Montana. However, a silver lining is that Railroad Retirement benefits are not taxed in Montana.
The state has a graduated state individual income tax rate, ranging from 4.70% to 5.90%. The lowest income tax rate applies to taxable income up to $21,100 for single filers and $42,200 for joint filers. The highest income tax rate, 5.9%, applies to taxable income exceeding the aforementioned thresholds.
Montana does not have estate or inheritance taxes, making it one of the states without such taxes.
In the realm of consumer goods, the tax rate for cigarettes is $1.70 per pack, and for other tobacco products, it's 50% of the wholesale price. The tax rate for wine is $1.06 per gallon, the tax rate for beer is 14 cents per gallon, and the taxation of liquor is state-controlled.
Lastly, Montana offers a homeowner/renter credit of up to $1,150 for eligible homeowners and renters who meet certain criteria. To qualify, residents must be age 62 or older, have lived in Montana for a minimum of nine months, have lived at the same residence for a minimum of six months, and have household income under $45,000.
For more detailed information on property tax rebates and other relief for homeowners, as well as Montana tax rebate checks, please refer to related articles.
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