As Montana faces rising property taxes and growing pressure on public services, economists are again scrutinizing whether a statewide sales tax could reshape the state’s long term revenue system.

The University of Montana’s Bureau of Business and Economic Research made the issue the focus of its 2026 Economic Outlook Seminar, signaling how central the question has become for households, businesses, and policymakers. Supporters see a sales tax as a way to diversify state revenues and ease the burden on homeowners while capturing some spending from visitors who currently contribute little through income or property taxes.

Economists cautioned, however, that a general sales tax would not generate enough revenue to replace property taxes outright and may raise less from tourism than many Montanans expect, since visitors tend to spend more on fuel and outdoor activities than on taxable retail purchases. The debate matters statewide, particularly for rural communities and fixed income residents already feeling squeezed, and it could influence how Montana funds infrastructure, education, and economic development in the coming decade.

The discussion also raises concerns about equity and competitiveness that could ripple through Montana’s economy and workforce. Analysts warned that a broad sales tax would be regressive, placing a heavier burden on lower income households that spend a greater share of their income on taxable goods.

That shift could affect consumer spending and local businesses, especially in smaller communities. Proposals for local option sales taxes add another layer of risk, potentially leaving some regions behind and distorting local decision making. For Montana’s tech sector and education system, the outcome matters because stable and predictable revenue is key to funding universities, workforce training, and research that support growth industries. With voters historically rejecting sales tax proposals and constitutional limits capping any future rate, economists emphasized that public trust and clear guarantees, particularly tying new revenues to property tax relief, would be critical if the idea is to gain traction among Montana citizens.

BBER’s seminar tour will continue this week in Great Falls and Missoula, followed by events later on in Billings, Bozeman, Butte, Kalispell, Lewistown, and Havre.

Montana economists discuss impacts of a potential future state sales tax