Montana has the Fifteenth Lowest Tax Burden in the Nation for 2011

Jan 18, 2014

In Fiscal Year (FY) 2011, Montana collected $3.4 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average Montana taxpayer can afford this level of taxation.

As shown in the charts below, Montana’s state and local tax burden (tax collections divided by personal income) was the fifteenth lowest in the nation for FY 2011 at 9.7 percent—or 7.3 percent below the national average of 10.5 percent. Montana’s tax burden has increased over time by a modest 22.3 percent to 9.7 percent in FY 2011 from 7.9 percent in FY 1950.

Montana’s low state and local tax burden is driven by the fact that it does not have a state sales tax.  Of course, Montana can essentially pay for not having the sales tax because of money stemming from natural resource extraction—all other taxes are significantly higher than the national average (3.8 percent, 7th highest).

Montana levies a coal severance tax (pdf) which raised $52.8 million in FY 2012—half of the revenue goes into the General Fund and half goes into the Coal Severance Tax Trust Fund. In FY 2012, the Trust Fund had assets worth nearly $900 million. The interest on the Trust Fund goes to fund numerous programs in education, infrastructure, and economic development.

Click here to view tax burden data by state, type of tax, and for years 1950 to 2011.



Category: Tax Burdens

J. Scott Moody

Scott has nearly 20 years of experience as a public policy economist. He is the author, co-author and editor of over 180 studies and books. His professional experience also includes positions at the American Conservative Union Foundation, Granite Institute, Federalism In Action, Maine Heritage Policy Center, Tax Foundation, and Heritage Foundation.

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