Provide income tax deduction for qualified business income

SB 538 would allow Montana taxpayers to claim the same qualified business income deduction they use on their federal tax returns under Section 199A of the Internal Revenue Code. This directly affects Montana business owners who operate as sole proprietors, S-corps, or partnerships and qualify for the federal deduction. The bill amends Montana's tax code to automatically include this deduction when calculating state taxable income, aligning Montana's rules with the federal provision. It applies retroactively and takes effect immediately upon enactment. The bill died in committee in May 2025 and was not enacted.