Missoula News

A Tax on Thee

Montana Taxes Kind to Business, Survey Finds

By Dana Green, 2-27-06

Just a week ago, Gov. Brian Schweitzer chastised two University of Montana professors who questioned whether the state could encourage business growth by changing state economic and environmental laws. Ironically, a national survey just declared Montana has one of the most business-friendly tax codes in the country. The survey, conducted by the Tax Foundation, was based on corporate income tax; individual income tax, used by many small businesses; sales tax; and property taxes.

At the governor's Office of Economic Development, Chief Business Officer Evan Barrett couldn't be happier about the study's findings. The state will be touting the study, along with a Milken Institute study that ranked Montana in the top five for cheapest states to do business.

"This will help us market Montana," Barrett said. "There's a lot of doom and gloom people in Montana ... who want to say there's a (miserable) business climate."

The foundation's survey was based on tax codes, and states with a flat tax structure and a low sales tax tended to rise to the top: Montana has a flat 6.75 corporate tax rate, and no sales tax, which probably helped, according to Barrett.

People underestimate the value of no sales tax for businesses," he said. "Often business-to-business purchases have a sales tax applied."

Barrett said Gov. Schweitzer will continue to promote Montana as an attractive state to do business – without looking at changing laws, such as the Montana Constitution's guarantee of a clean and healthy environment.

"Historically, that's what attracts people to Montana," he said. "We have a huge opportunity as the (laws) exist today."

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