Montana’s equipment tax for small businesses is being reevaluated this legislative session. The new legislation in Helena could be more beneficial to small businesses, including farms and ranches.
Sponsored by Rep. Josh Kassmier (R-Fort Benton), the Big Jobs Act, or Business Investment Grows Jobs Act, doubles the business equipment tax exemption in Montana from $100,000 to $200,000.
Last week, Gov. Gianforte visited the Hayhook Ranch south of Clyde Park to discuss how farmers and ranchers may benefit from the legislation.
“For all these businesses, whether it's a contractor, or a rancher, that money is going to be available to invest back into their businesses,” said Gov. Gianforte as he stood in front of a John Deere tractor. “That then ripples through the community and helps the other Main Street businesses that are supplying services.”
Currently, the business equipment tax requires small business owners, farmers, and ranchers to value their property, file paperwork, and pay tax on their business equipment.
The Big Jobs Act will relieve 4,000 small businesses across Montana of the burden of paying the business equipment tax, encouraging those businesses to grow their operations and create jobs. Approximately 1,500 of the 4,000 small businesses are Montana farms and ranches.
“Agriculture is our number one industry,” said Gianforte. “Equipment like this tractor sits around most of the year. Yet every single farmer and rancher must pay an annual tax. With this Big Jobs Act, we're going to help 1,500 farms and ranches. Allow them to keep more of their own money. They can invest it back into new equipment, maintenance, fence or whatever to make sure we can maintain viability these operations.”
Montana Farm Bureau member Sky Anderson of the Hayhook Ranch explained that the tax savings will go a long way for his family operation.
“For us, it's going to just eliminate that first $200,000 that we pay on every year,” said Anderson. “And, we go beyond that. So, we'll still be paying on our business equipment.”
Anderson said the tax savings will help agriculturists reinvest in their operations, through new equipment and other purchases that untimely spread dollars across local communities.
“The reinvestment of whatever tax dollars you can save is a positive thing for the overall operation,” explained Anderson. “We are trying to just stay in business, and you look at the bottom line at the end of the year after the calves are sold. What do we do for the next year? Did we have a loss? What do we do with any profits? If we save some money on the operation, and we're able to, we'll just reinvest that in more new equipment or other upgrades.”
The Big Jobs Act passed the Montana House of Representatives on February 19th and is under consideration in the Senate.