With backing from Republicans, two bills to cut the state’s highest income tax rate — a top proposal from Republican Gov. Greg Gianforte — have passed the Legislature.

Another of Gianforte’s priorities, to raise the business equipment tax exemption, also advanced after stalling out in committee and being amended to increase the tax break for businesses.

Senate Bill 159 cuts the state’s top income tax rate from 6.9% to 6.75%. The reduction is expected to mean about $34 million less for the state’s general fund because it would cut the amount of income tax paid by that figure.

It would take effect first and be in place until 2024, when the second bill passed Tuesday, Senate Bill 399, takes over. That legislation broadly simplifies the state’s income tax system to just two brackets, one at 4.7% and one at 6.5%.

It would make Montana’s taxable income levels and standard deductions mirror the federal ones, as well as eliminate nearly two dozen tax credits.

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