Even though Montana’s individual subsidy deals hardly ever exceed a few million dollars, the state does have an arsenal of fiscal tools for subsidizing businesses, such as no sales tax, a reduced tax rate for data centers, tax holidays for oil and natural gas companies, film incentives, and a host of corporate income tax credits and local property tax abatements.
In April 2023, the state legislature considered a proposal to restructure municipal uses of Tax Increment Financing (TIF). The bill would have taken the school share of the increment off the table and limited TIF terms from 40 to 30 years total. Public comment reached record engagement on this issue, with citizens speaking both for and against SB 253, though the bill died in the Standing Committee in May 2023. Additionally, Montana adopted SB 124, ushering in a single sales factor apportionment for corporate income tax effective January 1, 2025.
The Department of Commerce administers most programs, while the Department of Revenue oversees a few. The Montana Board of Investment reviews loan applications from local governments to offset infrastructure costs required by businesses.
There is a data portal for all of Montana’s loans and grants, but there are no disclosures for tax breaks. The Department of Revenue publishes tax expenditures biennially. The Annual Comprehensive Financial Reports contain just one tax abatement program with an approval process. Few of Montana’s localities report tax abatements as required by Statement No. 77.
Montana does not have in place a process for evaluating incentives. It came close in 2015 when a bill passed the Legislature that would require tax credits to be reviewed prior to expiration, but the governor vetoed it.
Last Updated October 2023