Bill > SB322

This bill increases the business equipment tax exemption in Montana by several key provisions. First, it raises the exemption amount for Class Eight property (which includes agricultural implements, mining machinery, manufacturing equipment, and other business-related personal property) from $1 million to $3 million, with a further adjustment to $1.5 million. The bill introduces an annual inflation adjustment mechanism for the exemption amount, calculated using the Consumer Price Index. Additionally, the bill provides that any individual piece of personal property with a cost of less than $500 is completely exempt from property taxation. The legislation also maintains a complex reimbursement system for local governments and tax increment financing districts to offset potential revenue losses from these exemptions. For manufacturing machinery installed after December 31, 2022, the bill preserves an existing 5-year tax exemption program with a gradual phase-out period. The bill is designed to provide tax relief for businesses by reducing their property tax burden, particularly for smaller pieces of equipment and newer manufacturing investments, while ensuring local governments are compensated for potential revenue reductions. The changes will apply to tax years beginning after December 31, 2025.

Budget and Finance

https://bills.legmt.gov/#/laws/bill/2/LC0446