Helena, Monte. — Gov. Gianforte’s proposal to reform the state’s business equipment tax to help small businesses and family farms and ranches, a top priority in the Montana household budget, garnered broad support at legislative hearings this morning.
Sponsored by Rep. Josh Kassmier, R-Fort Benton, House Bill 212 passes the expansion of the business equipment exemption from $300,000 to $1 million for small business owners, family farmers and family ranchers in Montana tax cuts.
Montana’s business equipment tax forces businesses, including family farms and ranches, to reallocate resources that would otherwise be invested in their operations and create jobs, to tax the equipment and machinery they need to operate.
The business equipment tax also creates a costly compliance burden, requiring businesses to take an annual inventory of equipment and report it to the state.
The Act reduces the business equipment tax burden for Montanans, encourages business investment and promotes job creation.
In 2021, the Governor works with the House of Representatives. Kassmier increased the business equipment exemption from $100,000 to $300,000.
Altogether, these reforms eliminated the business equipment tax for more than 5,000 small businesses, farms and ranches.
Many testified in support of the bill in their committees this morning.
Montana Chamber of Commerce President and CEO Todd O’Hair: “From neighborhood print shops to farms and ranches, lower taxes on the equipment needed to run businesses allows these businesses to reinvest in their success and drive economic development in local communities. Approximately 5,000 Montana businesses will benefit from lower business The equipment tax, which makes it a top priority for the Montana Chamber of Commerce, and we applaud Governor Gianforte for his business-savvy approach to growing Montana’s economy.”
Ronda Wiggers, Montana Director, National Federation of Independent Business: “More than 4,000 small businesses in Montana will be directly impacted by this. These businesses will no longer have to fill out this document. They are very grateful for this bill and the Governor’s Office for supporting more efficient tax and tax cuts.”
Montana Retail Association President Brad Griffin: “On behalf of equipment dealers, retailers and restaurateurs in Montana, we proudly support increasing the business equipment tax exemption to $1 million. A tax break for small businesses in Montana, this proposal will help Protect their bottom line, invest in their operations, and create more jobs.”
Cary Hegreberg, President and CEO of the Montana Bankers Association: “The banks themselves don’t pay much in business equipment taxes, but they finance tens of thousands of businesses across the state and they do. Many small businesses, farms and ranches have experienced a price tag when they renew their loans shock. This bill will help some of these small businesses lessen the burden that inflation has on not only the prices of the goods they buy and the labor they pay, but also the cost of financing.”
Cindy Johnson, president of the Montana Farm Bureau Federation: “Farmers and ranchers – members of the Montana Farm Bureau Federation – thank Governor Gianforte for his commitment to making Montana a more business-friendly state. HB 212 will allow and encourage farmers and ranchers to invest in equipment that will improve their productivity and efficiency of the family business.”
Tryg Koch, past president of the Montana Grain Growers Association: “As producers, we’re always looking for ways to keep our food cheap, a way to keep taxes down and keep up with the times.”
Krista Lee Evans, representing the Montana Agricultural Business Association and the Montana Grain Elevator Association: “By reducing the business equipment tax we have to pay, we can get more money to invest in our business and increase innovation and diversification. This is a fantastic opportunity not only for our business but for growers.”
Sarah Converse, Executive Director, North Central Montana Economic Development District: “Increasing the business equipment exemption will benefit our agricultural sector and small businesses. These reforms are an important step in supporting the business economy, keeping Montana competitive and reducing the tax burden on Montana residents.”
Dan Brooks, Director of Business Advocacy, Billings Chamber of Commerce: “One of the top priorities of the Billings Chamber of Commerce is to reduce the cost of doing business in Montana, and we have long supported lowering the business equipment tax. In Yellowstone County, we have approximately 502 entities with business equipment taxes for the 2022 tax year obligation, so raising the exemption threshold to $1 million would fully exempt more than half of entities. We are very grateful to the Governor for his emphasis on lowering the cost of doing business in Montana.”
Lorraine Clarno, President and CEO, Kalispell Chamber of Commerce: “We have identified over 120 thriving and growing manufacturers in our community and we want to see that continue and allow them access to additional resources through this bill to create more good paying jobs . We ask for your support as this is a great opportunity to also make Montana more competitive with its neighbors.”
Jennifer Hensley, representing Fidelity Diagnostics: “[Fidelity Diagnostics Laboratory] Employs 35 well-trained, well-paid, highly educated individuals with $1.8 million worth of complex scientific equipment. This will go a long way in helping them hire more people and scale their business more predictably. “
Henry Kriegel, American Prosperity Montana Legislative Liaison: “At Americans for Prosperity, we are committed to removing barriers to success…We see this business equipment tax as a barrier and we want to see it removed. We see this bill as a positive step in the right direction , enabling business owners to retain their hard-earned income and reinvest in their business, creating more value for their community and delivering a great service or product.”