Bill > SB203

This bill revises Montana's income tax brackets to significantly increase the income thresholds at which higher tax rates are applied. Specifically, the bill raises the threshold for the 4.7% tax rate from $20,500 to $100,000 for single filers and from $41,000 to $200,000 for joint filers, effectively lowering income taxes for many Montana residents. The bill also modifies the tax rates for long-term capital gains, using the same expanded income brackets and maintaining the existing lower tax rates for these types of income. Additionally, the bill introduces a new method for adjusting tax brackets annually using a "modified inflation factor" based on the consumer price index, with a transition provision that delays this adjustment until the 2026 tax year. The legislation is set to be effective immediately upon passage and will apply retroactively to income tax years beginning after December 31, 2024, meaning taxpayers will see the benefits of these revised tax brackets for the 2025 tax year when they file in 2026.