The short version: Montana Senate leaders are drafting a flat income tax for the 2027 session. Most households in the Billings Heights already pay Montana’s lowest income tax rate, so a flat tax would either pass us by entirely or raise what we owe. Before anyone votes on it, I want one question answered: where does the money come from?
Since 2021, Helena has cut Montana’s income tax in every single legislative session. Four times now.
Did you feel it?
Here is what most of us felt instead. The property tax bill arrived, and the number on it was bigger. Again. And somebody on the news explained that our taxes had just been cut.
Both of those things are true at once. And Helena is about to do it again.
What is the flat income tax proposal?
On July 10, 2026, the President of the Montana Senate requested a bill for the 2027 session titled “Lower Montana state income tax rate,” backed by Senate leadership and the chair of the Senate Tax Committee. The plan is a flat income tax: one single rate for every Montanan, no matter what they earn. The session opens January 4, 2027.
Who would a flat income tax actually help?
Montana has two income tax brackets today. For 2027, a married couple pays 4.7 percent on taxable income up to $130,000, and 5.4 percent on anything above that. For a single filer, the 4.7 percent rate runs to $65,000.
The median household income in House District 39 is about $74,000. That falls below the $130,000 line before a single deduction is subtracted. The typical Heights family already pays 4.7 percent on every dollar they earn. The lower bracket is our bracket.
So watch what a single flat rate does on either side of that line:
| If the flat rate is set at… | A Heights household at our median income | A household with $400,000 in taxable income |
|---|---|---|
| 4.7 percent (the rate we already pay) | Saves nothing | Saves about $1,900 a year |
| Anything above 4.7 percent | Pays more than today | Still gets a cut |
Illustration uses 2027 married-filing-jointly brackets published by the Montana Department of Revenue.
Both outcomes are bad for this neighborhood. Set the flat rate at 4.7 percent and the tax cut passes us by, because we already pay 4.7 percent, and every dollar of it flows to income above $130,000. Set the flat rate any higher and we owe more than we do today.
I have looked hard for a third outcome and I cannot find one. If Senate leadership has found one, I would like to see the math.
Why does a paycheck get taxed more than a stock sale?
Montana taxes long-term capital gains, the money made from selling investments, at 3.0 percent and 4.1 percent. Wages are taxed at 4.7 percent and 5.65 percent.
In Montana, the money a nurse earns on a night shift is taxed at a higher rate than the money someone earns selling stock. That is the rate table, published by the Department of Revenue.
In 2025, Representative Scott Rosenzweig brought HB 868 to revise how Montana taxes long-term capital gains. The House Taxation Committee tabled it on March 31 by a vote of eleven to ten. One vote.
I will vote for a bill like that, and I will push to get it to the floor where every legislator has to go on record.
If income taxes keep going down, why does my property tax keep going up?
Montana is one of five states with no general sales tax, so the income tax carries the state budget. Every income tax cut widens the distance between what Montana collects and what Montana has already promised: schools, roads, nursing homes, search and rescue, and the state’s share of what our local governments would otherwise raise on their own.
That distance gets closed somewhere, and historically it gets closed in two places.
It gets pushed down onto local property taxpayers. That is the bill on your counter. That is how a tax cut announced in Helena arrives as an increase in Billings.
And it revives the proposal that circles back every few years: a statewide sales tax. A flat income tax and a sales tax are the same policy arriving in two shipments. The first one takes the money out of the state budget. The second one takes it out of your grocery cart. I oppose a sales tax in Montana and I will keep opposing it.
What I will push for
- Fair revenue first. Bring back a bill like HB 868 and close the gap between what Montana asks of a paycheck and what it asks of an investment sale.
- Circuit breaker relief. Cap property taxes as a share of household income, so a senior on a fixed income or a young family in a first home never faces a bill that outruns what they earn.
- Honest math, in public, before the vote. Every rate change should arrive with a clear public accounting of what it costs and who closes the gap.
Ask the question
Ask it of me, and ask it of every candidate who knocks on your door between now and November: where does the money come from?
If the answer is a shrug, a slogan, or a promise that growth will cover it, you have learned something. Government belongs to us, and we reclaim it when we show up and ask.
If your property tax bill climbed while Helena announced tax cuts, tell me about it. That is the story I intend to carry to the Capitol.
Common questions
Does Montana have a flat income tax? No. Montana has two brackets: 4.7 percent and, in 2027, 5.4 percent. Senate leadership has requested legislation to move Montana to a single flat rate in the 2027 session.
How much would a flat tax save a typical Billings family? If the flat rate is set at 4.7 percent, a household at House District 39’s median income of roughly $74,000 saves nothing, because it already pays 4.7 percent on all of its income. The savings go to households earning well above that.
Has Montana already cut income taxes? Yes. Montana has cut income taxes in every legislative session since 2021. The top rate has fallen from 6.9 percent to 5.9 percent, then 5.65 percent, and reaches 5.4 percent in 2027.
Would a flat income tax lead to a sales tax in Montana? Montana has no general sales tax, so income tax revenue carries the state budget. Cutting it widens the state’s revenue gap, and that gap has historically been closed by shifting costs onto local property taxpayers and by reviving proposals for a statewide sales tax.
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