(The Center Square) – A favorable tax climate may draw businesses and entrepreneurs to Montana, but two economic development experts think the quality of life is the state's stronger draw.

Brian Obert, executive director of the Montana Business Assistance Connection in Helena, thinks the idea that low taxes will attract businesses is a mantra that probably is not as strong as it used to be in the past. Quality of life and availability of talent have become increasingly important, he told The Center Square.

Montana makes it easy for residents who are interested in outdoor activities and culture, according to Obert, who said he’s a stone’s throw away from one of the biggest state or city parks in the nation known for its mountain biking trails.

“One of the phrases that we use locally is there are people who want to be seen fishing. We want to go fishing,” he said.

The state’s outdoor recreation component attracts employees who work remotely for companies that might not be based in the state, Bridger Mahlum, government Relations director for the Montana Chamber of Commerce, told The Center Square.

“I would say that Montana is making gains in recent years to become a more competitive tax climate for business,” Mahlum said.

Gov. Greg Gianforte, who last month sent an open letter to Minnesota businesses urging them to relocate to Montana for a better tax climate, shares that motivation with the chamber, Mahlum said. Some work his administration spearheaded in the 2021 legislative session shows that.

“Specifically, we've made a significant reduction in the business equipment tax burden on business personal property for Montana business owners, as well as reducing the top marginal income tax rate which impacts a lot of sole proprietors and other independent businesspeople,” he said.

Changing the apportionment formula to incentivize businesses to bring their operations and payroll to Montana helps with the corporate income tax, Mahlum said.

“I'd also say that Montana continues to rank among the top states when it comes to entrepreneurial climate,” he said.

The percent of startups in the state that are still active after one year in 2020 was 80.96 percent, compared to 78.1 percent of startups at the national level, according to the Kauffman Indicators of Entrepreneurship.

Something the Chamber would like to see changed is the business property tax system, Mahlum said.

“The property tax system in Montana is a bit complicated in part because we rely on it so much in absence of a general sales tax in that we have 16 classes of property that are taxed at different rates, and frankly, some of them are a little bit more arbitrary,” he said.

Another difficulty is the ability of businesses to find workers.

“Like so many states we’re struggling with talents, developing enough talent … for the workforce needed for businesses, especially business attraction right now,” said Obert, who also serves as chairman of the Montana Economic Development Association.