Montana's 10-bracket personal income tax, which has been indexed to inflation since 1981, ranges from 2% to 11%. The corporate income tax is 6.75% on net income, with a minimum tax of $50; for small business corporations, $10. The rate for corporations filing on a water's-edge-basis (that is, only counting its operations within the boundaries of the US plus a number of tax havens and not its operations other foreign jurisdictions) is 7%. There is no state sales and use tax, but Montana imposes a full array of excise taxes covering motor fuels, tobacco products, insurance premiums, public utilities, alcoholic beverages (the state controls all sales), amusements, pari-mutuels, and other selected items. In 2002, the state tax on gas was raised from $0.27 a gallon to $0.2775¢ a gallon. Montana's estate tax, with a maximum rate of 32%, is tied to the federal exemption for state death taxes, and is therefore set to be phased out in tandem with the phasing out of the federal estate tax credit by 2007, unless the state takes positive action to establish an independent estate tax. Montana's revenue losses from the phasing out of its estate tax are estimated at -$900,000 for 2002/03, -$2.7 million for 2003/04 and -$3.9 million for 2006/07. Death and gift taxes accounted for 0.9% of state collections in 2002. Severance taxes in Montana include a coal severance tax, a metalliferous mines license tax, oil and gas producers' severance tax, a micaceous minerals license tax, a cement license tax and a mineral mining tax. Severance taxes constituted 6.2% of state taxes collected in 2002. Other state taxes include various license fees and a state property tax, although property taxes are also collected at the local level. In Montana's relatively centralized state tax system, 64.5% of all state and local taxes were collected at the state level.
The state collected $1.443 billion in taxes in 2002, of which 35.8% came from individual income taxes, 25.7% from selective sales taxes, 13.8% from license fees, 12.5% from state property taxes, and 3.5% from corporate income taxes. In 2003, Montana ranked 37th among the states in terms of combined state and local tax burden, which amounted to about 9.1% of income.
The following table from the US Census Bureau provides a summary of taxes collected by the state in 2002.
|Sales and gross receipts||370,801||407.72|
|General sales and gross receipts||(X)||(X)|
|Selective sales taxes||370,801||407.72|
|Other selective sales||21,569||23.72|
|Hunting and fishing||33,013||36.3|
|Motor vehicle operators||4,343||4.78|
|Occupation and business, NEC||25,991||28.58|
|Corporation net income||68,173||74.96|
|Death and gift||13,816||15.19|
|Documentary and stock transfer||(X)||(X)|