Taxes in Montana

Tax burdens in Montana are a mixed bag. Retirement income is subject to moderate fees, while purchased goods remain free from taxation. Below, we explain various Montana state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.

For information regarding taxes in other states, see Retirement Taxes by State.

Montana Tax Rates

State Sales Tax	0%
Avg State/Local Sales Tax	4.23%
Gas Tax	$0.33 per gallon
Diesel Tax	$0.30 per gallon
Cigarette Tax	$1.70 per pack
Income Tax	6.75%
Effective Tax Rate:	5.99%
Property Tax	0.84%
Social Security Tax	Partial
Medical/Dental Deduction:	Federal Amount
Federal Income Tax Deduction:	Partial
Retirement Tax	Partial

Montana State Taxes Explained

Montana Sales Tax

Montana has no state sales tax, although local taxes apply in some resort areas, such as Big Sky, Red Lodge, and Yellowstone.

Montana Income Taxes

Montana’s higher income tax brackets kick in at a relatively low threshold, which can mean a heavier tax burden on many residents. But there will be only two tax rates beginning in 2024: 4.7% for up to $20,500 of taxable income for single filers ($41,000 for married couples filing jointly) and 6.5% for all others.

Montana Property Taxes

Montana’s effective property tax rate is 0.84%. Homeowners pay $1,928 on the average $230,600 home value. Properties are assessed at 100% market value. Local governments may impose additional taxes.

Montana’s Property Tax Assistance Program (PTAP) reduces the property tax rate for citizens on a fixed or limited income. The PTAP benefit applies to the first $200,000 of the primary residence market value. Reductions from 30% to 80% are determined by marriage status and income range. For disabled veterans and surviving spouses, property tax reductions range from 50% to 100%, depending on income level and marital status via the Montana Disabled Veterans (MDV) Assistance Program.

Homeowners and renters age 62 or older can apply for an income tax credit if they’ve lived in Montana for nine months, rented, owned or leased a home in Montana for six months, and have a total household income of less than $45,000.

Visit Montana’s tax relief page for information about all available property tax assistance.

Montana Retirement Taxes

Montana taxes all pension, Social Security, and military retirement income.

Some Montana retirees are entitled to a partial exemption from a retirement plan income, including from 401(k) plans and IRAs. Taxpayers must have a federal adjusted gross income of $40,980 or less ($43,300 or less for joint filers). Married spouses can each claim the exemption. Interest income is partially exempt from Montana tax for taxpayers age 65 or older. The exemption is up to $800 for single filers and $1,600 for joint filers.

Retired military income is taxed at the federal amount.

Montana Estate and Inheritance Taxes

There is no inheritance tax and no estate tax in Montana.

For further information, visit Montana Department of Revenue.