Montana is #1 (well actually #50)

[LFC911]

Would a sales tax help take some of the burden off of property taxes or just give more money to the govt?

 

[Dust Rider]

I am not looking forward for the upcoming property tax bill. I’ll be crying tears of pain, not joy.

 

[Idaboy]

If there were only buyers and sellers this might be valid, but you've got hedge fund builders and investors (a new development near me was built by BlackRock) doing things to local economies via overbuilding and densifying that negatively affect the rest of the world. Sure, my house value goes up, but not enough to even get close to incentivize me to sell because i can afford nothing else in the area.

It is yet again the Tragedy of the Commons. Apparently we can't learn...

Completely agree...."Tradegy of the Commons"....theme for the US unfortunately

 

[Montcoyote]

Last Legislative session the Montana Property Tax issue was a hot topic, but the Legislature chose to use an enormous budget surplus to "fix" other issues. The Legislature was aware the property tax rate needed to be addressed or residents would be hit by a large bill once property values were reassessed. The bean counters provided the exact rate to offset the likely effects of high property values. Instead, the short-term solution was the two Property Tax rebates (I just applied for my second). Montana residents should all be paying close attention in the next three months as the Executive budget gets finalized after the election. The Governor's Property Tax Task Force was used to identify a suite of "solutions" to shift the tax burden from property tax. Add in that both red and blue Counties are pulling together (Montana Association of Counties met in Missoula last week) to make sure these "solutions" don't just make the Governor look good while passing the expense to local governments. Sales Tax, local tourist taxes, and other ideas are resurfacing. Gonna be a wild ride!

 

[LFC911]

The other thing I was thinking of is I know of at least three people in my circle that make a whole lot more money than I do that incorporate LLC’s in Montana, just so they can avoid their local state sales tax. These are six figure boats, RVs, horse trailers, etc., that people are taking advantage of the law in their favor. If Montana was to correct that issue, maybe it would generate more revenue? I’m not sure?!?

 

[Turkeygetpwnd38]

There will definitely be some folks in Montana (because they bought their home 20+ years ago) that simply won't be able to pay the property taxes, maybe already is.

Not sure if there other states, but California "freezes" your appraised value at the time you purchase your home—this is what they calculate your taxes with and as along as you continue to reside in it. This only applies to residents of the state and the home has to be your primary place of abode- not your second, third home.

We had a similar initiative come up last legislative cycle and evidently it didn't have required number of signatures—I never saw sign up sheets, but would gladly have signed. Local, county and state officials and legislators were up in arms about it and vowed to fight it in the courts, which told me the people that drafted the initiative were definitely on the right track.

Yup, Florida has something similar called a homestead exemption. If it is your primary residence and you are a resident, the value at purchase gets locked in for property tax purposes (-50k) and can only rise 3% max a year.

I purchased property in MT about 10 years ago and was surprised they didn’t offer their residents something similar. Seems common sense to take the pressure off long time residents and put it on the second homes and big money coming in. I was also surprised purchase price isn’t public record. I’m sure it would help now but might be too little too late for a lot of folks. The trade off with that might be implementing a sales tax though?

I love Montana and spend a ton of time there, hope y’all get some of these growing pains figured out, things are changing rapidly.

Before I catch flak for being part of the problem, my property is off grid, not in a “desirable/vacation” area and unreachable 4 months out of the year. It’s not pushing any residents out and didn’t raise anyone’s taxes!

 

[mtwarden]

Would a sales tax help take some of the burden off of property taxes or just give more money to the govt?

I look at Wyoming who have had a sales tax for decades. If I understand their legislation that enacted it, it stays at 4% forever unless the the voters want it higher- Wyoming guys can correct that if wrong.

Not sure it impacts their property tax, BUT with that legislation they completely eliminated their state income tax. Now that tourism/recreation closely vies with agriculture as the number one industry- getting rid of our income tax while paying 4% on goods (sans exceptions like medical services, prescriptions and food (grocery store food) would be a worthwhile trade

I’m definitely writing my representative and senator letting them know I’m watching their work on this property tax debacle.

 

[180ls1]

San Diego guy here. A LOT of friends (I'm in my 30's) are leaving or have already left. You need an income of $274,000/yr to afford the average house currently. Combine that with being young and trying to raise kids and they don't really have a choice.

 

[TaperPin]

Would a sales tax help take some of the burden off of property taxes or just give more money to the govt?

The percentage of a person’s income that goes to sales taxes is the least for high incomes and hurts lower income families. Sales taxes are known as one of the the most regressive. Eliminating sales tax on food and basic necessities goes a long way to help.

 

[TaperPin]

I look at Wyoming who have had a sales tax for decades. If I understand their legislation that enacted it, it stays at 4% forever unless the the voters want it higher- Wyoming guys can correct that if wrong.

Not sure it impacts their property tax, BUT with that legislation they completely eliminated their state income tax. Now that tourism/recreation closely vies with agriculture as the number one industry- getting rid of our income tax while paying 4% on goods (sans exceptions like medical services, prescriptions and food (grocery store food) would be a worthwhile trade

I’m definitely writing my representative and senator letting them know I’m watching their work on this property tax debacle.

We’re not really comparable to many states - the biggest driver that lets us avoid income tax is the large amount of money raised on oil&gas, and mining.

The state has a pretty good thumbnail sketch of revenue sources and which get used to fund state, county and local uses.

https://www.wyoleg.gov/2023/Databook/Operations/Revenue/a%20Revenue%20Introduction.pdf

 

[mtwarden]

Looks like Montana does pretty good on mineral/oil/gas revenues

https://mtrevenue.gov/wp-content/uploads/2019/01/2018-Biennial-Report-Natural-Resources.pdf

 

[LFC911]

The percentage of a person’s income that goes to sales taxes is the least for high incomes and hurts lower income families. Sales taxes are known as one of the the most regressive. Eliminating sales tax on food and basic necessities goes a long way to help.

If sales tax hurts lower income familles and property taxes hurt the presumably middle to higher income families, I’m not sure we’re going to solve this issue. Kind of like if we should do otc tags in ID vs a draw, the money has to come from somewhere.

 

[IDVortex]

End all taxes all together. Make a smaller goverment, a federal goverment that primary goal is to keep is safe. And make local residents to maintain their own roads if they choose. Make it go back to the wild west and have no LE just guns for hire. What could go wrong?

 

[TaperPin]

I really feel for communities or entire states that are trying to figure out a better tax structure - it’s difficult at best. Human nature wants to fight any tax, special interests often get away with paying less than they should, and the rapid change in “portable” personal income sources makes it easy for many to take advantage of the situation.

In many ways the average small community is at the mercy of the wealthy - one of my clients wanted to do something completely against a long tradition of land use in the area and the county commissioners laughed at him. He funded the replacement of a number of elected officials until getting his way - and it didn’t make a dent in his income because of the extra profit from what he built where it was built. Multiply this kind of spending ability by a dozen, or 4 dozen, and long established political figures at all levels are easily bought off or replaced.

The crazy thing about lots of money changing hands is it builds on itself. Another client was a full time attorney for a developer in Jackson Hole - he lived a state away and commuted a few days a week, but essentially works remotely. Same for his neighbor. Either of these guys will gladly steam roll someone standing up to the companies they represent - they describe it as “sport.”

Once you get an island of big money guys living in a development, it attracts their friends.

Enjoy it while you can - in our lifetimes bigger changes are coming - slowly like boiling a frog with gradually increasing temps in the pot so it doesn’t jump out or complain much.

 

[OKHunter84]

This is happening in a lot of traditionally red states, just on a larger scale in mountain west. Mainly due to folks fleeing liberal policies and unaffordable living costs in blue states.

I was talking to an acquaintance the other day and she said, "I just feel like the country could do more. We have enough resources to be able to do four day work weeks." When asked what about fast food workers, folks working at stores you want to go to on a Friday afternoon, do they get a four day work week too or do they matter? What about the 35 trillion dollar debt that's more of an existential threat then anything we're facing?.... Crickets

There's too many idiots running the country and voting so things will continue to get more expensive and unaffordable.

 

[Cheddar]

https://www.nar.realtor/research-an...rs-affordability-distribution-curve-and-score

simply born too late. young people will need a miracle at this point. anyone looking to adopt and pass down an inheritance?

 

[H@mstar19x3]

Would a sales tax help take some of the burden off of property taxes or just give more money to the govt?

just gives more money to the state. Texas is well on its way to destroying ourselves. 8.25% sales tax. property taxes are generally over 3% and the appraisal districts just keep ratcheting up the values.

there is supposed to be a 3.5% cap on rate increases. anything over that is supposed to go to a vote. but the state created a new law that allows an exception in the case of a disaster. counties and cities can raise the outright rates by 8.5% without a vote after a disaster. Harris county where Houston is located just used Hurricane Beryl to bypass the cap. They will raise an estimated $89mm from the county. The city has said they will follow suit. The biggest problem? the state did not mandate that the funds raised via the disaster exception had to be used for disaster recovery/prevention.

so the county has said they will spend $20mm on recovery and the rest will just go into the general fund. simultaneously, the county is putting a proposition on the november ballot for a special tax to raise $100mm for disaster prevention.

our county is run by an unqualified clown because "feels". this is the result.

 

[mtwarden]

^ you guys have NO state income tax

If tourism wasn't our #2 industry (might be close to tying for #1) I would never even consider a sales tax. As it is, tourists get a free ride—on us. They would contribute a healthy share of $ with a sales tax.

I'd only support it if it got rid of our state income tax AND could only be raised by a vote of the people of Montana.

We're paying right at 6% for income tax, there is no way in hell I'd be paying that much with a 4% sales tax (exempting groceries/medical). Montana even wants income tax on Social Security!

 

[H@mstar19x3]

^ you guys have NO state income tax

If tourism wasn't our #2 industry (might be close to tying for #1) I would never even consider a sales tax. As it is, tourists get a free ride—on us. They would contribute a healthy share of $ with a sales tax.

I'd only support it if it got rid of our state income tax AND could only be raised by a vote of the people of Montana.

We're paying right at 6% for income tax, there is no way in hell I'd be paying that much with a 4% sales tax (exempting groceries/medical). Montana even wants income tax on Social Security!

this is true and is oft cited to make Texas seem like a low cost state. Reality is that it's just not as true as it once was.

 

[Customweld]

We're paying right at 6% for income tax, there is no way in hell I'd be paying that much with a 4% sales tax (exempting groceries/medical). Montana even wants income tax on Social Security!

Idaho has entered the chat. 5.7% state income tax and 6% sales tax.