Montana Tax Guide: No Sales Tax State

Tax Overview

Montana is one of only five states with no general sales tax, making it a unique destination for consumers. The state recently transitioned to a flat income tax rate of 5.9%, replacing a progressive system that previously had rates up to 6.75%. This simplification, combined with the absence of sales tax, creates a distinctive tax profile.

The lack of sales tax means all purchases in Montana are tax-free at the state level, including clothing, electronics, vehicles, and groceries. This provides significant savings for residents, particularly on large purchases. Some resort communities do impose small local resort taxes on certain goods and services, but these are limited in scope.

Property taxes in Montana are moderate, with effective rates around 0.74%. The state uses a complex assessment system with different rates for different property classes. Montana offers property tax assistance programs for low-income homeowners and renters, including the Montana Elderly Homeowner/Renter Credit. The state also provides a $200,000 exemption on the market value of a primary residence for property tax purposes.