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HB 132

Exempt a portion of interest earnings from individual income tax

2025 Regular Session Introduced by Terry Falk

HB 132 would have exempted portions of interest earnings from Montana income tax but died in committee without advancing.

(H) Died in Process
#revenue #state #taxation--individualincome #taxation
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Bill Summary · HB 132

Legislative bill overview

HB 132 would have exempted a portion of interest earnings from Montana's individual income tax. The bill did not advance past the committee stage, ultimately dying in process during the 2025 legislative session. The exact portion of interest income to be exempted would have been specified in the bill's language.

Why is this important

Interest income exemptions affect how Montana taxes savings, investments, and fixed-income investments held by residents. This directly impacts tax revenue for the state and the after-tax returns for Montanans with savings accounts, bonds, CDs, and similar interest-bearing assets. The fiscal note indicates this would have had measurable budget implications.

Potential points of contention

  • Revenue impact: Exempting interest income reduces state tax collections, requiring either spending cuts or alternative revenue sources to maintain state services
  • Equity concerns: Interest income is disproportionately earned by higher-income and older Montanans, raising questions about whether tax relief should be targeted differently
  • Complexity: Defining and administering which interest qualifies for exemption could create compliance and administrative burdens for taxpayers and revenue officials

Compiled from official sources — confirm details with the bill’s official record.

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