SENATE BILL NO. 1
INTRODUCED BY L. GROSFIELD
A BILL FOR AN ACT ENTITLED: "AN ACT REDUCING TAXES BY LOWERING INCOME TAX RATES AND BY EXPANDING THE STANDARD DEDUCTION; PROVIDING THAT THE PROPOSED ACT BE SUBMITTED TO THE QUALIFIED ELECTORS OF MONTANA; AMENDING SECTIONS 15-30-103 AND 15-30-122, MCA; AND PROVIDING AN EFFECTIVE DATE AND A RETROACTIVE APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 15-30-103, MCA, is amended to read:
"15-30-103. Rate of tax. (1) There shall must be levied, collected, and paid for each taxable tax year commencing on
or after December 31, 1968 January 1, 2000, upon the taxable income of every taxpayer subject to this tax, after making
allowance for exemptions and deductions as hereinafter provided in this title, a tax on the following brackets of taxable
income as adjusted under subsection (2) at the following rates:
(a) on the first $1,000 of taxable income or any part thereof of that amount, 2% 1.9%;
(b) on the next $1,000 of taxable income or any part thereof of that amount, 3% 2.85%;
(c) on the next $2,000 of taxable income or any part thereof of that amount, 4% 3.8%;
(d) on the next $2,000 of taxable income or any part thereof of that amount, 5% 4.75%;
(e) on the next $2,000 of taxable income or any part thereof of that amount, 6% 5.7%;
(f) on the next $2,000 of taxable income or any part thereof of that amount, 7% 6.65%;
(g) on the next $4,000 of taxable income or any part thereof of that amount, 8% 7.6%;
(h) on the next $6,000 of taxable income or any part thereof of that amount, 9% 8.55%;
(i) on the next $15,000 of taxable income or any part thereof of that amount, 10% 9.5%;
(j) on any taxable income in excess of $35,000 or any part thereof of that amount, 11% 10.45%.
(2) By November 1 of each year, the department shall multiply the bracket amount contained in subsection (1) by the
inflation factor for that taxable tax year and round the cumulative brackets to the nearest $100. The resulting adjusted
brackets are effective for that taxable tax year and shall must be used as the basis for imposition of the tax in subsection (1)
of this section."
Section 2. Section 15-30-122, MCA, is amended to read:
"15-30-122. Standard deduction. (1) A standard deduction equal to 20% of adjusted gross income is allowed if
elected by the taxpayer on a return. The standard deduction is in lieu of all deductions allowed under 15-30-121. The
minimum standard deduction is $665, as adjusted under the provisions of subsection (2), or 20% of adjusted gross income,
whichever is greater, to a maximum standard deduction of $1,500, as adjusted under the provisions of subsection (2).
However, in the case of a single joint return of husband and wife or in the case of a single individual who qualifies to file as
a head of household on the federal income tax return, the minimum standard deduction is $1,330, as adjusted under the
provisions of subsection (2), or 20% of adjusted gross income, whichever is greater, to a maximum standard deduction of
$3,000, as adjusted under the provisions of subsection (2). The standard deduction may not be allowed to either the
husband or the wife if the tax of one of the spouses is determined without regard to the standard deduction. For purposes of
this section, the determination of whether an individual is married must be made as of the last day of the tax year unless
one of the spouses dies during the tax year, in which case the determination must be made as of the date of death.
(2) By November 1 of each year, the department shall multiply both the minimum and the maximum standard deduction for single returns by the inflation factor for that tax year and round the product to the nearest $10. The minimum and maximum standard deduction for joint returns and qualified head of household returns must be twice the amount of the minimum and maximum standard deduction for single returns. The resulting adjusted deductions are effective for that tax year and must be used in calculating the tax imposed in 15-30-103."
NEW SECTION. Section 3. Effective date. Subject to section 5, this act is effective upon approval by the electorate.
NEW SECTION. Section 4. Retroactive applicability. Sections 1 and 2 apply retroactively, within the meaning of 1-2-109, to tax years beginning after December 31, 1999.
NEW SECTION. Section 5. Contingent voidness. If LC 2 is passed and approved, then this act is void and may not be submitted to the electorate.
NEW SECTION. Section 6. Submission to electorate. The question of whether this act will become effective shall be submitted to the qualified electors of Montana at the general election to be held in November 2000 by printing on the ballot the full title of this act and the following:
[] FOR reducing taxes by lowering income tax rates and by expanding the standard deduction.
[] AGAINST reducing taxes by lowering income tax rates and by expanding the standard deduction.
- END -
Latest Version of SB 1 (SB0001.01)
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