Montana Senate Republicans announced their backing for Gov. Greg Gianforte’s effort to establish a flat state income tax rate, signaling unified Republican support as the 2027 legislative session approaches. Senate President Matt Regier requested draft legislation titled “Lower Montana state income tax rate,” advancing what has been a central fiscal priority for the governor since his 2020 election.

Gianforte has pursued incremental income tax reductions in each budget cycle over the past six years. He initially pushed legislation in 2021 to condense Montana’s seven tax brackets into two, with the top rate set at 6.75 percent. That top bracket fell to 5.9 percent in 2023 and again to 5.4 percent in 2025. The lower bracket currently stands at 4.7 percent for single filers earning up to $65,000 and joint filers earning up to $130,000. Gianforte is now seeking to apply that 4.7 percent rate uniformly across all income levels.

Regier stated that “Gov. Gianforte has made it abundantly clear that getting Montana to a flat income tax rate is best for our great state.” The governor has positioned the flat tax proposal as consistent with neighboring states’ competitive tax structures. Idaho’s top rate stands at 5.69 percent, North Dakota taxes at 2.5 percent, and Wyoming and South Dakota collect no state income tax at all. Montana remains one of only four states without a sales tax.

Previous Legislative Attempts and Revenue Concerns

A similar tax-reduction measure sponsored by Republican Sen. Josh Kassmier during the 2025 session sought a 4.9 percent rate but failed to achieve unified Republican support. That bill passed nearly along party lines, with no House Democrats supporting it and only two Senate Democrats—Jonathan Windy Boy and Shane Morigeau—voting yes. The division within the Republican caucus indicated earlier resistance to deeper tax cuts.

Revenue projections present a fiscal challenge for lawmakers. Analysts estimate that a 4.7 percent flat tax would reduce state revenues by approximately $130 million annually, though modest growth is projected to begin in 2029. Despite the projected decline, Montana’s income tax revenue actually grew 4.1 percent in 2025, exceeding the initial forecast of a 1.7 percent decline.

Democratic opposition to the flat tax proposal has centered on its distributional effects. Sen. Mary Ann Dunwell characterized the approach as regressive, stating that “a flat tax is a reckless move when we have all these needs Montanans have.”

Setting Up the 2027 Debate

Unified Republican support in the Senate positions the flat tax as a flagship item for the 2027 session, which convenes in January. Gianforte’s consistent pursuit of tax reduction—from his election as Montana’s first Republican governor in 16 years through six years of bracket compression—reflects a core policy agenda unlikely to shift. How House Republicans and potentially swing Democrats respond will determine whether this latest proposal advances beyond committee or becomes law.

The governor’s economic development strategy, including his energy task force plan to expand Montana’s power supply and support for major projects like Janicki Industries’ $800 million aerospace campus in Great Falls, frames the tax proposal as part of a broader effort to position Montana as competitive for business investment and growth.