Republicans Sue to Overturn Montana Property Tax Bill Over Procedure

Three leading Republicans filed a lawsuit Wednesday seeking to nullify a key Montana property tax bill from 2025, arguing it breached state constitutional procedures. The lawsuit targets one of two bipartisan bills designed to reduce 2025 property taxes for many Montana homeowners. Senate Taxation Committee Chair Greg Hertz, Senate Majority Leader Tom McGillvray, and former state Sen. Keith Regier claim the bill increased their tax bills, violating legislative procedures.

“I’ve heard from many of my constituents who are suffering from the tax shift these bills created,” said Hertz. The court victory would reinstate the 2024 tax system, reversing changes that raised some bills. It could trigger more tax debates when the Legislature meets in 2027.

The 2025 property tax bills, Senate Bill 542 and House Bill 231, aimed to rework Montana’s property tax system to alleviate taxes on modest homes, increasing taxes on high-value properties. The legislation also applied higher rates to second homes and short-term rentals. Led by Gov. Greg Gianforte, the bill faced opposition from Republicans while gaining support from Democrats.

Hertz, McGillvray, and Regier argue that procedural tactics violated the 1972 Montana Constitution. They claim SB 542 was improperly altered, bundling a $90 million rebate to secure passage. Similar strategies previously led courts to overturn unconstitutional bills, like a 2021 campaign finance bill.

Legal experts state the lawsuit’s success could mean an uncertain impact on taxpayers. Hertz does not expect rebates to be rescinded or tax calculations redone. The lawsuit aims to revert to the 2024 tax code and prevent future legislative procedural violations.

The plaintiffs’ legal fees are supported through a political committee, Montana Policy Action, managed by Republican strategist Jake Eaton. Hertz declined to disclose financial backers, citing potential retribution concerns.

Figures from the Montana Department of Revenue show last year’s tax changes saved most median homeowners statewide. Yet, high-value properties like lakefront homes saw tax increases.

Tom Lutey contributed reporting.