Montana State Tax Rates 2025-2026 Complete Guide – Montana offers one of the most taxpayer-friendly environments in the U.S., with no state sales tax, competitive income tax rates, and significant property tax reforms taking effect in 2025 and 2026. Whether you’re a resident, business owner, retiree, or planning a move to Big Sky Country, understanding Montana’s state tax rates for 2025 and 2026 is essential for accurate tax planning and maximizing savings.
This complete guide covers individual income tax brackets, capital gains treatment, property tax changes, corporate taxes, sales tax, and more—based on official data from the Montana Department of Revenue and trusted sources like the Tax Foundation. All information reflects the latest legislative updates, including House Bill 337 (HB 337) and property tax reforms.
Montana Individual Income Tax Rates for 2025
For tax year 2025 (returns filed in 2026), Montana uses a two-bracket graduated income tax system. Rates apply to taxable income (after federal adjusted gross income, standard or itemized deductions, and Montana-specific adjustments, but excluding net long-term capital gains).
Here are the 2025 brackets:
- Single / Married Filing Separately:
4.7% on $0 – $21,100
5.9% on income over $21,100 - Head of Household:
4.7% on $0 – $31,700
5.9% on income over $31,700 - Married Filing Jointly / Qualifying Surviving Spouse:
4.7% on $0 – $42,200
5.9% on income over $42,200
Note: These brackets were in effect following earlier reforms that simplified the tax code and removed the marriage penalty by doubling joint filer thresholds.
Montana conforms to the federal standard deduction (approximately $16,100 for single filers and $32,200 for joint filers in 2026, with 2025 amounts adjusted similarly under federal law). Additional Montana-specific deductions include a $5,660 exemption for those 65 and older and up to $4,600 for Medical Savings Account contributions (per 2025 tables).
Montana Individual Income Tax Rates for 2026
HB 337, signed in 2025, delivers further tax relief starting in tax year 2026. The lower 4.7% bracket expands significantly, and the top rate drops to 5.65% (with an additional reduction to 5.4% scheduled for 2027).
2026 Brackets (taxable income excluding long-term capital gains):
- Single / Married Filing Separately:
4.7% on $1 – $47,500
5.65% on income over $47,500 - Head of Household:
4.7% on $1 – $71,250
5.65% on income over $71,250 - Married Filing Jointly / Qualifying Surviving Spouse:
4.7% on $1 – $95,000
5.65% on income over $95,000
These changes make more Montanans eligible for the lower rate and provide meaningful savings for middle- and upper-income households.
Bonus 2026 Change: The Montana Earned Income Tax Credit (EITC) doubles to 20% of the federal EITC starting in 2026, offering extra support for working families.
Long-Term Capital Gains Tax Treatment in Montana
Montana provides preferential rates on net long-term capital gains, separate from ordinary income tax:
- For 2025: 3.0% on the first portion (aligned with the $21,100 / $31,700 / $42,200 thresholds depending on filing status), then 4.1% on the excess.
- For 2026 and beyond: Brackets for capital gains are adjusted to match the new ordinary income thresholds, but the preferential rates (3.0% and 4.1%) remain in place.
This favorable treatment makes Montana attractive for investors and retirees with significant investment income.
Montana Sales Tax Rates 2025-2026
Montana has no general statewide sales tax—one of only five states without one. This applies to most goods and services, making it especially beneficial for residents and visitors.
- Local exceptions: Some resort communities may impose a small local option tax (up to 3%) or a statewide 8% lodging tax on accommodations.
- Online purchases: No sales tax collection requirement for most out-of-state sellers due to the absence of a state sales tax.
This zero sales tax policy remains unchanged for 2025 and 2026.
Montana Property Tax Rates 2025-2026
Montana implemented major property tax reforms in 2025, with further refinements in 2026 that favor primary residences and long-term rentals.
2025 Property Tax Rates (Class 4 Residential & Commercial)
- Tiered structure:
- 0.76% on the first $400,000 of market value
- 1.10% on $400,001 – $1.5 million
- 2.20% on amounts over $1.5 million
- Multifamily rentals over $2 million: Maximum rate capped at 1.89%.
- One-time 2025 rebate: Up to $400 for qualifying primary residences.
2026 Property Tax Rates (Fully Implemented Tiered System)
Rates are now based on property type and market value (using statewide median home value of approximately $378,000–$379,000):
Primary Residences & Long-Term Rentals (7+ months occupancy/rental):
- 0.76% on first $378,000
- 0.90% on $378,001 – $756,000
- 1.10% on $756,001 – $1,511,999
- 1.90% on amounts over $1,512,000
Non-Primary Residences / Short-Term Rentals (e.g., vacation homes, Airbnbs): Flat 1.90% rate.
Multifamily Long-Term Rentals: Flat 1.10%.
Commercial & Industrial: Tiered at 1.50% (under ~$2.274 million) to 1.90% (above).
Qualified Agricultural & Forest Land: Significantly lower flat rates (2.05% and 0.37% on land, respectively).
These reforms lower taxes for most homeowners while shifting more burden to commercial and non-primary properties.
Montana Corporate Income Tax Rate
Montana imposes a flat 6.75% corporate income tax on net income apportioned to the state (unchanged for 2025–2026). A $50 minimum tax applies, with an alternative 0.5% gross sales tax option for qualifying small businesses.
Other Montana Taxes and Considerations
- Gas Tax: Approximately 33.75 cents per gallon (subject to minor adjustments).
- Estate / Inheritance Tax: Montana has no estate or inheritance tax.
- Excise Taxes: Apply to tobacco, alcohol, and certain other items.
Montana does not tax Social Security benefits for most retirees.
Who Must File Montana State Taxes & Key Deadlines?
You must file a Montana return (Form 2) if you are a resident, part-year resident, or nonresident with Montana-source income and you have a federal filing requirement (or certain Montana additions/subtractions). Filing follows federal rules closely.
- Deadline: April 15, 2026 for 2025 returns (extensions available to October 15).
- Estimated payments: Quarterly deadlines apply for higher earners.
Why Montana’s Tax Climate Stands Out in 2025-2026?
With no sales tax, falling income tax rates, and homeowner-friendly property tax tiers, Montana ranks highly in tax competitiveness (6th overall in recent indices). These changes benefit families, retirees, investors, and businesses alike.
For the most accurate calculations, always consult the official Montana Department of Revenue website (revenue.mt.gov), your tax professional, or use Montana’s tax tables and withholding updates. Tax laws can evolve, and individual circumstances vary.
Stay informed and take advantage of Montana’s pro-taxpayer policies in 2025 and 2026. Planning ahead with these rates can help you keep more of your hard-earned money in the Treasure State.
Sources: Montana Department of Revenue official publications, Tax Foundation reports, and HB 337 legislative updates.