Second Lawsuit Targets Montana Property Tax Overhaul

BOZEMAN, Mont.—Three current and former state lawmakers have filed a second lawsuit challenging Montana’s 2025 property-tax overhaul, arguing that the law violates constitutional requirements for uniform taxation and equal protection.

Senate Taxation Committee Chairman Greg Hertz, Senate Majority Leader Tom McGillvray and former state Sen. Keith Regier filed the complaint in Gallatin County District Court against the state of Montana, the Department of Revenue and Revenue Director Brendan Beatty.

The lawsuit challenges Senate Bill 542, which created a new system of graduated property-tax rates within Montana’s Class 4 property classification.

The plaintiffs argue that the Legislature may establish different property classifications but cannot impose substantially different tax rates on properties that remain within the same classification.

Under the law, qualifying residential property can be taxed at rates ranging from 0.76% to 1.9%, depending on the property’s value relative to the statewide median. Commercial and industrial properties also face different rates based on value.

The complaint argues those differences improperly shift the tax burden among property owners who remain within the same statutory class.

Hertz said the case is intended to determine whether Montana’s new property-tax system complies with the state Constitution’s uniformity requirements.

“Montanans deserve a property tax system that is fair, transparent, and constitutional,” Hertz said. “The Legislature has the authority to establish property classifications, but once property is placed within the same class, the constitution requires that taxpayers be treated equally.”

McGillvray said the challenge is not aimed at eliminating property-tax relief but at determining the constitutional limits on how lawmakers distribute that relief.

“Tax relief for one group of Montanans should not come at the expense of unfairly taxing their neighbors,” McGillvray said.

The complaint notes that McGillvray and Regier each own cabins that saw their tax rates increase from 1.35% to 1.9% beginning Jan. 1, while Hertz alleges his residential property taxes also increased under the law.

The plaintiffs are asking the court to declare the portions of SB 542 imposing multiple rates within Class 4 unconstitutional under Montana’s uniformity doctrine and equal-protection guarantees.

The case adds another legal challenge to the property-tax restructuring adopted by lawmakers in 2025 as Montana continues debating how tax relief should be distributed among homeowners, landlords, businesses and other property owners.

By: Politics406 Newswire

View a copy of the lawsuit HERE