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Montana’s Republican Governor Greg Gianforte is once again pushing to reduce the state’s business equipment tax by raising the exemption threshold from $1 million to $3 million. Under the proposed Senate Bill 322, businesses with less than $3 million in equipment—such as tractors or industrial machinery—would be entirely exempt from paying taxes on their equipment. Larger businesses would still benefit from exemptions on the first $3 million of their holdings.
The business equipment tax has been a topic of ongoing debate, with Gianforte arguing that it forces businesses, including family farms and ranches, to divert resources that could be used for growth and job creation into paying taxes on equipment. “This is an annual tax on the machinery they need to operate,” Gianforte stated at a press conference on March 20, 2025.
Senate Bill 322 aims to ease this burden by significantly increasing the exemption limit, which has been gradually raised in previous years. In 2013, Democratic Governor Steve Bullock signed a bill raising the exemption threshold to $100,000, and Gianforte’s administration raised it to $1 million in 2023. This new proposal would provide tax relief to an additional 700 businesses, according to the governor’s fiscal analysis.
While supporters argue that the tax reduction benefits smaller businesses, critics point out that the bill could place a heavier burden on homeowners and other non-equipment properties. A fiscal analysis of SB 322 suggests the equipment portion of the statewide tax base would decrease by around 9%, potentially shifting some of the tax burden onto residential properties, resulting in an average increase in school taxes by 0.35%.
The proposal has gained strong backing from business and agricultural groups, including the Montana Chamber of Commerce and the Montana Grain Growers Association. Sen. Josh Kassmier (R-Fort Benton), the bill’s sponsor, highlighted the high cost of agricultural equipment, such as $1 million combines, which makes the tax particularly burdensome for farmers.
On the other hand, opponents like Rose Bender from the Montana Budget and Policy Center argue that the bill disproportionately benefits large businesses while increasing the tax burden on homeowners.
While Gianforte is adamant about raising the exemption threshold, he has stated that he does not intend to eliminate the business equipment tax entirely, but rather aims to remove small businesses from its scope. “The goal is to get all the small businesses off this tax,” Gianforte explained.
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