HELENA — A Great Falls legislator said Tuesday that he wants to simplify Montana’s individual income taxes and make it so married couples who filed their taxes jointly aren't penalized.
Rep. Brian Hoven, R-Great Falls, presented his House Bill 393 to the House Taxation Committee.
Federal taxes are “pretty simple” for married couples to fill out, he said. People gather all information about their income and expenses and fill it out in a single column. They get to the end and either get a refund or owe additional taxes.
He contrasted that with the Montana income tax forms.
“The Montana state income tax form has a reputation for being horrible to fill out,” Hoven said.
On Montana tax forms, married couples with separate incomes can file either jointly or separately. Married couples filing separately is the source of the complexity, he said. They have to take all the information from the single column in their federal tax forms and split it into two columns — one for each spouse — on the state returns.
Another problem, he said, the single rate “really benefits married people filing separately” and hurts those married couples filing jointly.
His bill would propose a new tax rate structure for couples who choose to file under the married filing jointly status on their state returns.
Holly Franz, a Helena lawyer representing the Montana Society of Certified Public Accountants, endorsed the bill.
“This bill results in a significant simplification of Montana tax forms,” Franz said. “The married filing single situation causes a lot of confusion for taxpayers, particularly those who are self-preparers.”
Alan Peura, deputy director of the Department of Revenue, called himself “a very soft opponent” to the bill.
“The department really appreciates Rep. Hoven’s goals, but on behalf of the (governor’s) budget office, I’m here as an opponent,” Perura said. “It costs a great deal. It’s a very expensive bill.”
A fiscal note on House Bill 393 estimated it would cost $35 million over the next two fiscal years and about $15 million a year after that.
Peura said the department stands ready to work with Hoven to make the bill more revenue neutral.
The committee didn’t vote on the bill immediately.