Our Dash of SALT Blog provides the most recent developments and changes in state and local tax regulations. Here are the latest updates for Montana.

March 20, 2024

Montana Releases Pass-Through Entity Tax Common Issues to Avoid

Authored by: Jessie Racioppi and Penny Sweeting, CPA

The Montana Department of Revenue released “Common Errors to Avoid when Filing Form PTE – Tax News You Can Use.” The guidance addresses issues that are commonly brought up by tax preparers and common errors that cause processing issues for the Department. The Department warns taxpayers and preparers that there have been reports of certain tax software requiring the PTET election and reiterates the election is optional. The guidance includes checkboxes that are required to be checked off and the appropriate way the credit should be calculated and flow to the applicable K-1s. For additional information, please refer to the Department’s News You Can Use.

If you have questions about State pass-through entity tax elections, please reach out to a member of the Withum SALT Team.

January 22, 2024

Changes to Montana’s Business Equipment Reporting Requirement

Authored by: Jonathan Weinberg, JD, LLM, Principal and Ryan Schupp

On January 10, 2024, the Montana Department of Revenue published a “Tax News You Can Use” that beginning in tax year 2024, the business equipment tax exemption increases from $300,000 to $1 million. Businesses possessing equipment totaling $1 million or less FMV are exempt from the business equipment tax and do not have to file a report in 2024. Businesses possessing equipment with a total value greater than $1 million FMV will be required to report the equipment owned by March 1, 2024.

December 9, 2023

Montana Releases Pass-Through Entity Tax Guidance

Authored by: Bonnie Susmano, JD, MBA and Breea Boylan, CPA

The Montana Department of Revenue released Publication 4, which is the Pass-Through Entity Tax guide. Senate Bill 554, passed during the 68th Legislature, created a new elective tax for partnerships and S corporations. The pass-through entity tax (PTET) is an elective tax paid by the pass-through entity on an owner’s distributive share of Montana source income. Publication 4 provides additional guidance on this new elective tax, effective for Tax Year 2023.

If you have questions about PTET elections, please reach out to a member of the Withum SALT Team.

March 17, 2023

Montana Enacts Single Factor Sales Apportionment Effective 1/1/2025

Authored by: Jessie Racioppi and Bonnie Susmano, JD, MBA

Effective January 1, 2025, C Corporations and pass-through entities that file Montana income tax returns will be required to use single sales factor apportionment. Until January 1, 2025, taxpayers will continue to use Montana’s double weighted sales apportionment.

If you have questions about apportionment, please reach out to a member of the Withum SALT Team.

January 17, 2022

Montana Reduces the Highest Tax Rate for Individuals, Trusts, Estates, and Partnerships for 2022

The Montana legislature recently passed Senate Bill 159, which reduced the highest marginal tax rate for individuals, estates, trusts, and pass-through entities beginning with the 2022 tax year. The highest marginal tax rate will be reduced to 6.75% (from 6.9%) on taxable income over $17,400. Montana has seven marginal tax rates, and the passage of this bill does not affect the six lower marginal tax rates. After the 2022 tax year, the bill is subject to the ARPA Savings Clause, and the rate can revert to 6.9% if the savings clause is triggered.

May 13, 2021

Montana on Cusp of Enacted Double-Weighted Sales Factor Formula for Corporate Income Tax

On April 22, 2021, Montana legislature passed senate bill 376, which would change the Corporate Income Tax apportionment formula from an equally weighted three-factor formula (i.e., property factor, plus the payroll factor, plus the sales factor and a denominator of three) to a double-weighted sales factor formula (i.e., property factor, plus the payroll factor, plus two times the sales factor and a denominator of four). If enacted, the new apportionment formula would be effective for tax years beginning after June 30, 2021.

March 23, 2021

Individual Taxpayers Deadline

The Montana Department of Revenue has announced that Montana Governor Greg Gianforte has extended the filing and payment deadlines for 2020 Montana individual income tax returns to May 17, 2021. The governor explained that it was appropriate to extend the deadline without having taxpayers worry about interest and penalties, and the new May 17, 2021 deadline follows the new federal filing deadline of May 17, 2021 which was announced on March 17, 2021. The Department also noted that quarterly estimated payment deadlines for 2021 income taxes have not changed. ( Governor Gianforte Extends Tax Filing Deadline to May 17, Mont. Dept. Rev., 03/18/2021.)

April 1, 2020

Individual Taxpayers Deadline

The filing date for individual income taxpayers has been extended to July 15, 2020.

Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.

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The State and Local Tax (SALT) laws vary from state to state and are constantly changing. Reach out to Withum’s SALT Team for guidance on how to navigate your state’s local tax laws.