Montana hearing on SB 99 would treat rental income from agricultural leases as unrelated business income for nonprofits

Sen. Becky Beard told the House Taxation Committee that Senate Bill 99 would classify rental income from leasing agricultural property as unrelated business taxable income for tax-exempt organizations, potentially making some conservation and land‑trust lease revenue subject to state income tax beginning in tax year 2026.

Proponents said the change would align state law with the goal of taxing income that is not related to an organization’s exempt purpose. Charles Denow, representing United Property Owners in Montana, said an organization such as the American Prairie Reserve has reported grazing lease income as related to its exempt purpose and not as unrelated business income; Denow urged the committee to “level the playing field” for for‑profit ranchers. The fiscal note attached to the bill says the change would…