HELENA — As lawmakers approach the end of the Montana Legislature’s 2025 session, they’ve tied together two major bills in what could be the final version of their plan for property tax reform.
Senate Bill 542 and House Bill 231 each went to a conference committee on Tuesday morning, to resolve differences between the two chambers’ versions of the bills. SB 542 came out unchanged, but HB 231 was significantly amended – essentially turning it into coordinating legislation to adjust the other bill.
(Watch the video for more on how these bills are now connected.)
SB 542 establishes “homestead” property tax rates – lowering rates on Montanans’ primary residences, long-term rentals and small commercial properties, but raising them on properties that don’t qualify. It also includes a one-time rebate of up to $400, as leaders determined it’s too late to get the homestead rates implemented for this year.
HB 231 contains a similar system, but the conference committee added an amendment that essentially invalidates it if both bills pass. The remaining language would simplify the alternate tax rates that SB 542 implements for the first year – which are graduated so owners pay a higher rate on higher-value residential properties. Supporters of the amendment said the Montana Department of Revenue again determined it would be difficult to accurately implement the earlier rate structure this year.
During Tuesday’s hearings, the two bills drew criticism from a series of business and agricultural groups. They argued the bills weren’t really offering tax relief, just changing who pays property taxes – shifting the burden to companies, farms and ranches.
“These bills today are adding complexity to an already incredibly complex system and adding cost to investment in the state,” said Todd O’Hair, president and CEO of the Montana Chamber of Commerce.
But lawmakers backing the plan said many of the companies affected by these bills benefited from lower property taxes this year. They argued the changes would only “rebalance” to adjust for the greater burden residential properties have experienced since 2023, due to spiking property values.
“We're going to have to recognize that in a state where the residential shift has been so enormous, both relative and real, that something has to be done,” said Rep. Llew Jones, R-Conrad.
The committees sent the bills back for final approval. On Tuesday afternoon, the Senate endorsed both on an initial vote – 28-22 for HB 231 and 29-21 for SB 542.
Those opposing the tax proposals echoed the concerns about the impacts on business and questioned whether the late amendments to the bills had followed the correct process.
“I'm fine if we just kill this thing and kill 542 and come back in a special session,” said Sen. Greg Hertz, R-Polson. “We need to get it right, and we're not getting this right. And that's the problem.”
Supporters said the property tax plan is not a perfect solution, but it’s worth moving forward for the impact it will have for residents.
“I understand the no votes in some areas,” said Sen. Wylie Galt, R-Martinsdale. “There are legitimate concerns. They are legitimate no votes. But there’s a lot of people in this state where this bill does well for them. That's why I came around to support it.”
The Senate will take final votes on both bills on Wednesday. HB 231 is also scheduled for a first vote on the House floor Wednesday morning. SB 542 is not on the agenda. Jones told MTN Tuesday that, because the conference committee didn’t change that bill from the version the House previously approved, it may not need to go through another House vote.
