Montana lawmakers approved a complex 2025 tax package that shifts property and income burdens, senators say

Senator Ellie Boldman and Senator Greg Hertz told a City Club Missoula forum audience that the 2025 Legislature passed a package of tax changes that provides a one-time property tax rebate and narrows top income tax rates while reshaping property-tax rules. Boldman said the property relief "didn't pass till the last 2 days of the session" and noted taxpayers will have to apply for the one-time $400 rebate.

The package matters because it changes who pays and how much. "We're shifting taxes from one taxpayer to another taxpayer, particularly some regulated utilities," Boldman said, adding that higher utility property assessments are likely to show up on customer bills. Hertz warned the package also contains provisions that could be exploited as loopholes.

Key elements described at the forum included: a one-time $400 rebate that requires an application; changes in income-tax brackets that reduce the top rate (Senate Bill 203 was discussed on the floor as the vehicle for rate changes); and a lengthy property-tax bill referenced in the session as "Senate bill 5 42 2 31," which Boldman described as having been amended late in the process. "The top line actually has a misinformation. You're gonna get a $400 tax rebate, but you do have to apply for that," Boldman said.

Senator Greg Hertz described how bracket changes will affect different taxpayers and the state budget. He said the Senate version of an income-tax cut "flew across second reading 47 to 3" but that the final package differed and some proposals died in the House. Hertz said the governor's preferred tax changes would reduce state revenue substantially over multiple years; he cited a projection that the change will reduce state revenues by about $278 million by 2028.

Speakers at the forum emphasized distributional effects and local variability. Boldman said Missoula homeowners are likely to see smaller percentage reductions than owners in other counties because Missoula house values are higher than the statewide average. She estimated Missoula homeowners could see roughly a 10% reduction in property taxes over two years but cautioned that voter-approved levies could restore higher local tax bills later.

Both senators highlighted provisions that could shift tax burdens. Boldman pointed to provisions allowing property to be reclassified for agricultural valuation and said this could be used to lower tax bills for high-value properties with agricultural classifications. "There are some loopholes in here that you can drive a freight train through," she said.

For next steps, speakers said legal challenges are likely. Hertz said he expects lawsuits over the property-tax package and described procedural concerns about how the bill was amended during the conference process. "I do. I expect to see lawsuits over several bills that we passed in the legislature," he said.

Clarifying details available at the forum included estimates of the statewide rebate cost ($90 million for roughly 230,000 taxpayers, as described by Boldman), and local examples of how a Missoula home's higher market value will change the effective relief compared with other counties. Boldman and Hertz urged residents to watch for application procedures and to consult county offices for specific impacts.

Questions raised at the forum ranged from impacts on renters and landlords to whether the package will be reversed or adjusted in coming sessions. Boldman and Hertz both said long-term budget forecasts and potential federal changes could require the Legislature to revisit tax policy in future sessions.