Montana’s economy appears to have received a significant boost from the Federal Tax Cuts and Jobs Act passed by congress in December of 2017. Montana Bureau of Business and Economic Research Director Patrick Barkey explains.

“There has been some increase in spending power, both on companies and in households, due to the Tax Cut and Jobs Act,” Barkey said. “Regardless of whether you think that was a fiscally prudent thing to do at the federal level or not, I think the evidence is that the decline to marginal rates, certainly on the cooperate side, impacted that and increased the money left over for other things, in some cases, not anticipated.”

Montana doesn’t collect a state-wide sales tax, so it’s difficult to track spending rates by the general public, but Barkey says there is evidence that Montana companies are able to keep more money and spend more in the state.

“Consider for example that Northwestern Energy, which is a publicly regulated utility, recently announced that they are intending to increase their rebate back to customers of their gains that they have made as a company from the changes in tax at the federal level,” Barkey said. “That is just one company and one example. You happen to know about it because it is regulated.”

According to Barkey, the tax law likely had a lot bigger impact on Montana than most projected resulting in a decrease of tax liabilities for most households and an increase in spending power.