Provide income tax credit for certain long-time residents
Summary
HB 839 creates a new Montana individual income tax credit for certain long-time residents. A taxpayer qualifies if they have lived in Montana for the prior 10 years and have income under $100,000. For purposes of the bill, a year of residence means living in the state at least seven months of the year. The credit amount is $500, it is nonrefundable, and it cannot be carried forward to another tax year.
The bill also amends Montana’s tax-credit review statute to add this new “Montana 10-year resident credit” to the list of credits that the Revenue Interim Committee must periodically review. That review process requires the committee to evaluate whether the credit changes taxpayer behavior, who benefits, whether there are out-of-state beneficiaries, the timing of costs and benefits, any adverse impacts, and the broader economic effects. The bill applies to income tax years beginning after December 31, 2025.
Impact
HB 839 would add a new credit to Title 15, chapter 30 of the Montana Code Annotated and make a conforming amendment to the state’s tax-credit review provisions in 15-30-2303. Its practical effect would be to reduce income tax liability for eligible long-term residents with incomes below the stated threshold, while also placing the credit under the Legislature’s ongoing review framework. Because the credit is nonrefundable and nontransferable, it would only benefit taxpayers with sufficient tax liability to use it.
Sentiment
The available voting history suggests the bill was not controversial at the committee level, as the House Taxation Committee vote to table the bill was unanimous at 21-0. The bill ultimately died in process, indicating it did not advance through the legislative process despite the lack of recorded opposition in the vote shown. No committee transcript is available, so there is no recorded floor or committee debate to show broader support or criticism.
Contention
The main policy tension in HB 839 is between providing targeted tax relief to long-time Montana residents and the cost or fairness of creating a residency-based tax preference. Supporters would likely view the credit as a way to reduce the tax burden on established residents, while critics could question whether the credit rewards behavior that many taxpayers would have done anyway, whether it excludes newer residents, and whether it benefits some taxpayers at the expense of others. The bill’s income cap and residency test are the key eligibility limits, and the Legislature’s required review criteria reflect concerns about effectiveness, distributional effects, and economic impact.