I'm just curious as to why Montana has such a relatively high state income tax?

While not outlandish like CA, OR, or MN it seems to be moderately above the average.

https://taxfoundation.org/state-individual-income-tax-rates-brackets-2018/

Also, Montana's property tax rate is slightly higher than Wyoming's (for example) where there is no income tax.

Montana has relatively low taxes on residential real estate. The state's average effective property tax rate is 0.85%, lower than the national average of 1.19%.

Property taxes in Wyoming were the eighth-lowest in the country, according to the most recent data from SmartAsset. The average effective tax rate for the state was 0.61%. Fremont County reported the highest tax rate at 0.68%.

Typically when a state has lower income tax rates, it's made up via higher property tax and sales tax and vice versa.  However, that doesn't appear to be the case with Wyoming, but it does with Montana?

Anyway, I am asking because I'm doing retirement homework and state income tax rates is a pretty significant factor.

Thanks.

No sales tax.

Sales tax makes a big difference in comparison to other states I have lived in.  And really I don't find my property tax all that bad compared to other states either, I live on 5 acres with a 1500 square home and my tax bill this year is about $900, so I am not complaining.  Now remember you have to also balance taxes against services received, where I live, I receive less service than if I lived in town.  But included in my property taxes is also the cost of my garbage service which I have to take to my dump, we have no pickup here.  For most things, I don't have to pay anything to dump at the land fill and I just got rid of a fiberglass boat a couple of months ago, that did cost me a bit extra, it was like $15 where is I have friends that live back east and they would pay hundreds to get rid of one.

But if you are trying to compare apples to apples, you really have to do a line by line comparison and our tax structure here is different than anyplace I have lived n the past.

Gotcha. That's what I was missing.

Thanks.

Yeah, I know.  I was just digging in and those were some of the first things that jumped out at me in my OP.

I guess no sales tax can be a pretty big deal depending on how much you're spending annually.  Especially on large ticket items like vehicles, etc.

I know of a lot of people who have retired from Montana, and moved just over the border into Wyoming; they come into Montana for the majority of their shopping, so still get to enjoy the lack of sales tax, and get the rest of the benefits of Wyoming.

Apparently, this is a common thing.

Try living in Lewis and Clark county. I live on an acre in a house your size and my property taxes are three times that. And for that you only get 3000 lbs free at the dump.

Or in Missoula City limits.  MIL pays over $5K a year, and that's with the senior discount.  City keeps jacking taxes trying to pay for their stupid shit, and now they are trying to annex the airport and Expressway Business Center for more revenue.

Nope, staying right where I am, I know we have it pretty good up here

I’ve lived in multiple states with varying tax structures...my bank balance and paycheck remain about the same when it is all said and done.

Most recently, TX (Houston, Harris county). Sales tax was 8.25%. For vehicles I think it was 6.25%. No sales tax on food from grocery stores. Property tax was an effective rate of about 2% (after homestead exemption).

Biggest difference in MT is the state income tax, prop tax is about 1%, vehicle registration is much higher, and gas/diesel is much higher.

MT income taxes are graduated so you're not paying 6.9% until you hit $17,600.01.

There are six other rates, by income amount categories, below 6.9%.

Here's the gory details if you don't know them already.

1. First $2,900 at 1% rate
2. $2,900.01 - $5,200 at 2%
3. $5,200.01 - $7,900 at 3%
4. $7,900.01 - $10,000 at 4%
5. $10,000.01 - $13,600 at 5%
6. $13,600.01 - $17,600 at 6%
7. $17,600.01+ at 6.9%

I'm in the highest income bracket, paying 6.9% and because of that my wife and I must file married separate to minimize our tax basis. Currently, got hit with a 10% property tax increase on my home...went from $2200 when I bought the house in 2016 to now paying almost $3000 a year, but the house hasn't changed a damned bit since I bought it. So far, I can't see any improvement in services to justify this at all. Seems like as time goes on, the retards from other states come and vote in stupid shit or elect fucktards. That stupid 6-mill tax was just another confiscation of my money. I don't give a damn if it was already there, it needed to be gone. Is it better than the hellhole I lived in before? Fuck yes, but I'm so frustrated by the idiots living/moving here that seem to think money grows on trees. Hell, every time I turn around, there's more crap being foisted on us for more senior living or entertainment shit. But just wait, Logan Airport is gonna be turned into some mega airport to support more flights and international BS which will need funding. There goes our taxes, not to mention the increase in flights and noise. We researched the possible expansion of Billings Airport prior to buying where we did, couldn't find much at all. Now...crap on a cracker there's gonna be a huge mess coming. Thank God, I'm mostly deaf, the flight noise doesn't affect me much. But the traffic will be a bitch and the excessive monies it'll cost will make me think about moving further out.

You don't go straight to the 6.9% rate.

Everyone pays the previous six graduated rates until they go past $17,600 when the remainder of their income is taxed at the 6.9% rate.

Which, is a hefty amount of each of our income. I'm not another ARFCOM millionaire, not even close, just better off than I was before. Even at a graduate tax to $17,600 anything after that being taxed  at higher rate is punishing achievers, like the Fed AMT.

Just pointed out how the state rates apply to income.

Did not imply anything else.

If MT rates are too high folks always have the other option.

Just to point out to the gent from FL which has no state income tax but a high sales tax and a lot of wealthy people, WY gets a TON of royalties from resource extraction, i.e. oil, coal and other minerals that allows WY to have no state income tax, low property taxes but a modest sales tax.

The revenue that WY gets from royalties provides for pretty nice roads and really well-funded schools.  MT doesn't have those types of royalty revenues so it has what it has.

And FL avoids resource extraction like off-shore oil exploration that could lower its sales tax rate.

As others have said those in MT near the WY border they see a lot of WY residents travel to MT to beat a lot of their sales tax affected purchases.

For being the 4th largest state in the nation compared to much smaller and richer FL, MT gets by fine considering its a relatively low-wage and populated state.

Considering that FL does not tax individual income – retirement or otherwise. Plus..."if 65 years old or older, and have had a permanent Florida residence for at least 25 years, you may be entitled to a 100% exemption for property taxes. Your eligibility depends on the county or city where you live, and having an income below a specified limit. This exemption applies only if your home is worth less than $250,000".

So unless you have other reasons to move to MT it seems to me, as well as all the other retirees and others that move to FL enmass to beat taxation elsewhere, FL is a much better deal and critiquing MT tax rates is pretty silly. Plus your winter heating bill will be a lot lower.

By comparison to the states everyone seems to be leaving from, the tax is tolerable. I didn't come to Montana because of the tax rate, it was other things. I have zero intention of leaving if I can help it. Retirement for me, never entered into the equation, I wanted everything I couldn't have or do if I stayed where I was. Bitch session is exactly that, a bitch session. We all need to coordinate and work together to either reduce or at least stave off further incursions into our pocketbook. The enemy of our financial success are those that come and try to change things and make us like where they just left. These are our enemies.

I'm not exactly sure what you're implying, nor am I clear with the poster above you.

But what I am sure of is this -- if..I were to come to MT, I wouldn't be trying to "change" anything.

Asking about taxes is a fair question. Let's leave assumptions about motives, etc. out of the equation.

Dude, you wanna come....come. The point being, we have people from the screwed-up states that come here and proceed to try to change things here to make it more like what it is they're used to. We don't need that here, if you're liberal (not implying you are) and want more of it but want lower taxes, stay in Florida. Like Talyn said, the weather there is better (unless you like the winter and unstable weather). Property taxes are high, like Kommifornia high, but we don't have the sales taxes to offset lower property taxes. If you're conservative and want to help us stave off the debacle that is starting to emerge in our large cities, come on over and we'll all commune and put our heads together to come up with a plan of attack. We're starting to have the problems of the East and West Coast here because of the transplants that brought their BS baggage with them. You don't come to Montana to get rich (and not implying you are), you should come for the freedoms we temporarily still have. Motives and reasons for relocation ARE important, we don't want to become like the states that have already failed or are failing. Brutally honest and shooting from the hip, it is what it is.

Well, I would think it's pretty clear that I'm looking to leave FL given what has happened down here recently.  Hence my questions in here.  Taxes are certainly part of the bigger picture and depending on how much one makes, they may not matter much, or they may matter a whole lot.  It's obviously situational.

Anyway, I'm not from FL and I can't stand it here.  I'm only here now because I have to be.  However, that might be changing soon, but remains to be seen.  In the meantime I'm just trying to do some homework on the places that appeal to me the most on paper, and the two at the top of the list are Wyoming and Montana.

I prefer states that (as much as possible) respect personal liberties and freedoms and I think that MT is one of those along with WY.

States offset low/high property taxes with higher or lower taxes on income or consumption.

One must pick their poison, which is balanced/offset with other personal priorities/preferences.

I explained why WY is the way that state is.

Another factor is in either MT or WY one must realize that unless you live in/or near-by one of the "island-cities" (my term) in MT travel times to better shopping and medical services can be lengthy and more $$ due to travel distances and time, which does vary and can be complicated due to the seasons.

WY is the same although the major island-cites, like Cheyenne, Casper and Laramie are closer together in the SE portion of the state. But WY gets some nasty winter weather that makes travel through that state very interesting at times. Whereas Jackson Hole (if you have the $$), Cody (the nicest town in WY IMO) and Rock Springs (:() are really spread out.

According to an article I saw on the interwebs today the two best states for retirees tax-wise are Alaska and Wyoming.