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Taxation in Montana
- Montana charges state income tax ranging from 1% to 6.75%.
- The state offers tax deductions and credits to reduce your tax liability.
- Montana is one of four states that don’t charge a sales tax at the state or local level.
- Areas designated as resorts are permitted to charge sales tax of up to 4%.
Changes in Tax Withholdings
- The income tax withholdings for Montana have changed with the annual amount per withholding allowance now at $2,070.
- No action by the employee or personnel office is necessary.
Sales Tax in Wyoming
- All purchases of goods and services in Wyoming are subject to a 4% state sales tax.
- Many counties assess an optional 5th penny or 5% general purpose tax.
- The minimum sales tax rate for Laramie County is 5%.
Overview of Montana’s Tax System
- Montana’s state income tax ranges from 1% to 6.9% with seven income brackets.
- The state has a regressive tax system with various features including graduated income tax, combined reporting, and refundable property tax credit.
- Montana residents must pay state income tax on wages earned in the state.
Tax Rebate in Montana
- Montana offers a $1,250 tax rebate to residents who paid income tax in 2021.
- Eligible taxpayers receive the rebate automatically in July.
Residency and Taxation in Montana
- Montana is not a fully tax-free state but has no statewide sales tax and relatively low income tax rates.
- To be a Montana resident, one must live in the state for at least 180 consecutive days.
- Nonresidents pay Montana tax on Montana source income based on a ratio of their Montana income to total income, with a tax rate of up to 6.9% on Montana source income.
