Gianforte Pushes Flat Income Tax Rate

Saying it was the “best policy around,” Gov. Greg Gianforte said a flat income tax rate was a goal of his heading into the 2027 Legislative session.

Gianforte has cut state income taxes significantly since taking office in 2020 – the highest bracket taxpayers paid 6.9 percent in 2021. In 2027, after legislation passed during the 2025 session, that number will be 5.4 percent for the highest bracket and 4.7 percent for the lower bracket.

On Tuesday, Feb. 24, at a meeting of the Mountain States Policy Center, Gianforte said he’d like to see all Montanans pay 4.7 percent. It’s a change that would be hard to undo, he said.

“The real advantage of a flat tax is, once you get there, it’s very hard for future legislatures to raise it, because they got to raise the tax on everybody, right? So the penalty is higher,” Gianforte said. Montana also lowered income tax rates in 2021 and 2023. More Montanans are eligible for the lower tax rate as well. The last adjustment to the tax brackets, made through House Bill 337, also raised the threshold for where the two tax brackets split, so single filers in 2027 will pay the 4.7 percent rate on their first $65,000 of income, compared to $42,200 in 2025.

Gianforte has called high income tax rates a drag on the economy. And that economic future is bright according to the Mountain States Policy Center, a conservative think tank.

“Nationally, Montana ranks in the top five states in most of the economic indicators that we have looked at,” MSPC’s vice president Jason Mercier said. “And that’s partly the story heading into next legislative session, there’s been fantastic work bringing down the income tax rates, regulatory reform, permitting reform — the Treasure State has put itself on the map as a place that people want to come to.”

The governor had pushed for a lower tax rate during the 2025 session. Sen. Josh Kassmier, R-Fort Benton, ran Senate Bill 323 last session, the governor’s preferred proposal, which would have which would have lowered the top tax bracket all the way to 4.9 percent. Kassmier supports a flat-tax rate, saying it is the “fairest policy.” His bill ran into problems, including a blockage by a group of mostly Freedom Caucus members, adding there could be resistance from Democrats as well.

It’s likely future attempts enact a flat-tax rate could see resistance to the idea, which comes in the midst of discussions about rising property taxes and adding a potential sales tax.

“There are legislators that want to use income tax dollars to provide property tax relief which makes it very difficult to cut the income tax rate,” Kassmier said.