Montana's Tax Advantage: Low State Income Tax and No Sales Tax

Missoula, MT (KGVO-AM News) - Here’s a little good news for Montana taxpayers.

Compared to the rest of the country, Montana has the second lowest state income tax for those in the lower income brackets, but the state did almost as well tax-wise for all incomes.

Montana Fared Well Nationally from an Income Tax Perspective

KGVO News spoke to WalletHub analyst Cassandra Happe regarding a study released on Thursday about how all states fared from a tax perspective.

Happe described the parameters of the study.

“We generated estimates of the state-specific tax burden on residents at three different income levels,” began Happe. “For low income, we looked at around $25,000 a year and for medium incomes around $50,000 a year and for high incomes being around $150,000 a year in each of the states, and Montana came in second overall for low-income earners as far as the tax burden goes.

That means Montana’s income tax burden for those in the lowest income group was the second lowest in the entire country.

Montana is one of the Few States without a Sales Tax

Happe said Montana was ranked number one in the sales tax category, but that property taxes just took a big bump from the recent reappraisals.

“They ranked one, that’s first overall for sales and excise taxes out of all the 50 states,” she said. “So that's great, in fact, it is one of the lowest numbers that we're seeing for low-income. Now, unfortunately, they didn't do quite as well when it came to property taxes. They came in 34th overall for low-income earners in that particular category.”

When informed that Montana has no sales tax, Happe said that fact was excluded from WalletHub’s research.

No Matter the Income, the Report said Montana is an Attractive Place to Relocate

Happe said looking at the overall tax burden for all income ranges; she understood why Montana has been a popular choice for relocation over the past few years.

“When we looked at the income tax or the tax burden for middle and high-income earners, Montana also did really well,” she said. “They ranked eighth overall for middle-income earners and ninth overall for high-income earners. So it seems that regardless of what your income is, it's a pretty good deal to move to Montana if you're looking to cut back on your tax burden.”

Click here to see the entire WalletHub report on tax burdens throughout the U.S.