Montana

Moving from Texas to Montana would RAISE your total state and local tax burden from 8.6% of income to 10.1% of income — an increase of +1.5 pts. On a $100K household budget, that is roughly $1500 more per year in combined state and local taxes.

Montana has a state income tax with a top rate of 5.9%, while Texas has NO state income tax. Moving would expose your wage income to state taxation for the first time.

Montana has NO state sales tax (one of only 5 states). Combined rate: 0.00% (local only where applicable).

Montana median effective property tax rate is 0.74% of home value. On a $400,000 home, that is roughly $2,960/year. Property tax typically funds schools, municipalities, and county services — rates vary sharply within a state by school district.

Montana imposes annual vehicle property or ad valorem tax. Expect a recurring annual assessment based on the vehicle's value or registration class, in addition to one-time sales tax at purchase. Budget for this ongoing cost.

Montana has NO state estate tax and NO state inheritance tax. Heirs are subject only to federal estate tax (over $13.99M in 2025). This is favorable for wealth transfer.

In Montana: Social Security is partially taxed. Pensions and 401(k)/IRA withdrawals are partially taxed.

Montana capital gains treatment: Qualified long-term capital gains taxed at 3.0% (preferential rate below 5.9% top ordinary). Compare to federal long-term capital gains rates (0%, 15%, or 20%) — some states offer preferential treatment for long-term holdings, while others tax capital gains as ordinary income.

Montana gas tax is 33.8¢/gal — 13.8¢/gal higher than Texas's 20.0¢/gal. For a 15,000 mile/year driver getting 25 mpg, each 1¢/gal of gas tax = about $6/year.

Montana residency rules: Domicile + physical presence. No strict 183-day test but extended presence creates residency. To establish residency for tax purposes, typical steps include: update driver's license and vehicle registration, register to vote, file a homestead declaration, close home-state bank accounts where possible, and spend clearly more than 183 days in your new state. If your former state is aggressive (e.g., CA, NY, NJ, OR), keep documentation of every day spent in each state.

Montana recent tax law changes: Two-bracket system effective 2024 (4.7% / 5.9%). Capital gains preferential rate (3%/4.1%) enacted 2024.

For the most current tax information in Montana, visit the official source at https://revenue.mt.gov/. Tax laws change annually; verify rates and rules before making a permanent move. Consult a CPA for advice specific to your situation.