HELENA, Mont. — Lawmakers are considering a new bill that would provide an income tax credit to Montanans who have lived in the state for at least a decade.
House Bill 839, sponsored by nine Republican legislators, had its first hearing Tuesday in the House Taxation Committee. The bill offers a $500 tax credit to residents who have lived in Montana for at least 10 years and earn less than $100,000 annually. To qualify, taxpayers must have resided in the state for at least seven months per year.
Supporters argue the bill helps long-time residents facing rising costs, while opponents question its constitutionality and impact on the tax system.
“We’ve all seen how rising property values, inflation, and out-of-state money are putting pressure on long-time residents. This bill doesn’t solve everything, but it sends a clear message that if you’ve invested in Montana, Montana will invest in you,” said Rep. Lukas Schubert (R-Kalispell), the bill’s lead sponsor.
“This credit is fiscally conservative. It’s non-refundable, doesn’t create dependency, and rewards commitment to our state. Protecting Montana values means standing up for those who live them every day.”
Opposition and Concerns
Critics argue the bill violates tax fairness principles by favoring certain residents over others.
“One of our tax principles is equity. This bill benefits one group while treating others differently simply because they haven’t lived here long enough,” said Allen Lloyd, executive director of the Montana Society of CPAs.
“For example, if a young Montanan moves out of state for college and returns, they would have to wait another 10 years to qualify.”
The Montana Budget and Policy Center also opposes the bill, arguing it fails to address property tax relief—a more pressing concern for many residents.
“Montanans want property tax relief, perhaps even structural changes to the tax system. This income tax credit is not the solution,” said Rose Bender, director of research at the Montana Budget and Policy Center.
Cost and Legal Challenges
While a fiscal note hasn’t been attached yet, Schubert estimates costs could reach hundreds of millions of dollars.
“Don’t let that scare you—this is a tax reduction, not new spending. It takes the government’s tax burden off the people,” Schubert emphasized.
A legal review warns the bill could violate equal protection rights by treating newer residents differently. The proposal, which wasn’t voted on Tuesday, would apply to tax years beginning in 2026.
Schubert has proposed an amendment allowing married couples filing jointly with a combined income under $200,000 to also qualify.
