BILLINGS, Mont. (AP) — Montana’s congressional delegation may benefit financially under the new federal tax overhaul, but caps on deductions from state and local taxes may largely undo those benefits.
Under the measure Congress approved Wednesday, Sens. Jon Tester and Steve Daines would likely save a few thousand dollars, while Rep. Greg Gianforte would likely pay more.
The lawmakers shared their past tax returns with The Billings Gazette to show how the $1.5 trillion overhaul would affect the taxes of the legislators voting on it. Republicans Daines and Gianforte voted in favor of the tax bill, and Democrat Tester opposed it.
Tester and Daines would see benefits tied to the new 20 percent deduction for pass-through businesses, which do not pay corporate income tax. Daines said that about two-thirds of farms in Montana are pass-through businesses.
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The new deduction will take off about $38,000 from Daines’ taxable income of $254,446. His adjustable gross income was $336,919 at the last filing.
Tester will see about $9,000 taken off of his taxable income of $159,032. His adjustable gross income was $196,582 last year.
Gianforte’s 2015 filling shows an adjustable gross income of $6.4 million with $2.3 million coming from capital gains. The new tax bill made few changes to capital gains.
Gianforte will lose deductions on state and local taxes. The amount of state and local tax deductions was capped at $10,000 in Montana, so a person who pays beyond the cap will not be able to deduct for the extra amount. Gianforte would lose a deduction of $367,000 as a result.
Under the new bill, Gianforte would pay about $210,000 more, totaling $1.1 million paid in taxes.
Tester and Daines will also see a deduction loss for the state and local taxes. Tester’s total tax bill would come to less than $30,000, and Daines’ would be more than $60,000.
Information from: The Billings Gazette, http://www.billingsgazette.com