Mont. Admin. R. tit. 42 | Mont. Admin. R. Title 42 — Revenue

Chapter 42.1 Organizational Rule

Subchapter 42.1.1 Organizational Rule

Mont. Admin. R. 42.1.101 Organizational Rule

(1) Organization of the Department of Revenue.

(a) The Department of Revenue (department) was implemented under the Executive Reorganization Act of 1971 by executive order of the Governor on August 9, 1971. 2-15-1301, MCA.

(b) The department is organized into a Director's Office and five divisions, each supervised by an administrator:

(i) Business and Income Taxes Division;

(ii) Cannabis and Alcoholic Regulation Division;

(iii) Information Management and Collections Division;

(iv) Property Assessment Division; and

(v) Technology Services Division.

(c) The director is the chief administrative officer of the department. The director is appointed by and serves at the pleasure of the Governor, as set forth in 2-15-1302, MCA. The director is responsible for faithfully executing the laws and programs delegated to the department within the resources and authority assigned to it. The director has authority over all departmental activities and department employees.

(d) The deputy director is the staff officer responsible for the management, leadership, and oversight of the Executive, Human Resources, Security, Tax Policy and Research, and Taxpayer Advocate offices. The deputy director assists the director with general oversight of the department and serves as director in the director's absence.

(e) The operations director is the staff officer responsible for the management, leadership, and oversight of the Financial Services, Citizen Outreach, Procurement, Contracts, and Facilities, and Enterprise Planning and Analysis offices as well as department daily operations and strategic planning.

(f) A division administrator is the staff officer responsible for the management, leadership, and oversight of all programs within a division. The division administrator advises the director and deputy director on matters related to the resource management and administration of programs within the division and is responsible for policy and program development.

(2) Functions of Department Divisions.

(a) The Director's Office provides guidance and oversight for the department and coordinates the department's legislative efforts and administration of the Citizen Services, Communications, Enterprise Planning and Analysis, Financial Services , Human Resources , Legal Services, Dispute Resolution, Procurement, Contracts, and Facilities , Security, Taxpayer Advocate, and Tax Research, Information, and Policy offices.

(b) The Business and Income Taxes Division consists of five bureaus, the Analytics and Planning Bureau, Individual Income Tax Compliance and Audit Bureau, Regulatory Taxes, Fees and Valuation Bureau, the Withholding and Individual Income Tax Processing Bureau, and the Corporation and Pass-through Bureau. The division is responsible for equal tax administration, tax type expertise, taxpayer education and outreach, auditing, identification of non-filers, and overall tax compliance.

(i) The Analytics and Planning Bureau houses the division's management analysts and tax specialists. These employees focus on the division's compliance efforts, forms and administrative rule development, and finding and implementing efficiencies.

(ii) The Individual Income Tax Compliance and Audit Bureau is responsible for administering certain aspects of Montana's individual income tax laws found in Title 15, chapter 30, MCA. To facilitate this work, the bureau is organized into two units: the Compliance Unit and the Field Audit Unit. The Compliance Unit is responsible for less complex compliance activities relating to individual income taxpayers. The Field Audit Unit performs compliance activities related to complex income tax issues found on Montana's individual income tax form.

(iii) The Regulatory Taxes, Fees and Valuation Bureau manages over 25 taxes and fees. The bureau is organized into four units: Business Tax Unit, Unclaimed Property/Contractor Gross Receipts Unit, the Centrally Assessed Property Unit, and the Natural Resources Unit. The Natural Resources Unit administers the state's natural resource taxes, which includes the federal royalty program. The Centrally Assessed Unit values all centrally assessed property in the state.

(iv) The Withholding and Individual Income and Tax Processing Bureau is responsible for the daily management and compliance of individual and withholding taxes. The bureau is organized into two units: the Taxpayer Accounting Unit and the Withholding Unit.

(v) The Corporation and Pass-through Bureau is organized into two units: the Corporate Income Tax Unit and the Pass-through Unit. The Corporate Income Tax Unit ensures compliance with Montana's corporate income tax code. The Pass-through Unit processes, analyzes, and audits the pass-through returns filed with the department. The unit is also responsible for managing the Montana Economic Development Industry Advancement (MEDIA) Act Tax Credit.

(c) The Cannabis and Alcohol Regulation Division is responsible for the effective and efficient administration of the Montana Marijuana Regulation and Taxation Act (MMRTA) and the Montana Alcoholic Beverage Code (MABC) with an emphasis on customer service and public safety. The division provides customer service, data analysis, and support to individuals and to industry. The division consists of the Alcoholic Beverage Licensing Bureau, the Cannabis Licensing Bureau, the Cannabis Compliance Bureau, the Liquor Distribution Bureau, seven regulatory support units, and the Cannabis Laboratory Program.

(i) The Alcoholic Beverage Licensing Bureau protects the welfare and safety of the public by regulating alcoholic beverage licensing laws in a uniform and fair manner.

(ii) The Cannabis Licensing Bureau is responsible for approving registered cardholders and licensing marijuana businesses such as cultivators, manufacturers, dispensaries, transporters, and issuing worker permits. The bureau's focus is to protect the welfare and safety of the public by ensuring those who apply for a license meet the legal criteria for the cultivation, sale, and use of marijuana products in a uniform and fair manner.

(iii) The Cannabis Compliance Bureau is responsible for inspection, education, and enforcement of the MMRTA and consists of the Inspection, Synthetic Marijuana Inspection, Resolution, and Education and Outreach units. The bureau’s Resolution Unit and Education and Outreach Unit also provide education and enforcement functions relative to the department’s enforcement of the MABC.

(A) The Inspection Unit is responsible for the health and safety of the public through the tracking of all products from seed-to-sale and holding licensees accountable for any violations of the marijuana laws.

(B) The Synthetic Marijuana Inspection Unit works to prevent synthetic products from being sold in the state and is responsible for inspecting unlicensed businesses and educating and enforcing the prohibition on all synthetically-derived cannabinoids.

(C) The Resolution Unit assures that appropriate resolutions are made with either cannabis or alcoholic beverage licensees or registrants who are in violation of the law. This is done through a review of deficiencies found at inspection and an assignment of potential civil penalties, suspensions and/or revocations based on severity. This unit also entertains settlement negotiations in coordination with the department’s Legal Services Office.

(D) The Education and Outreach Unit provides education to internal and external stakeholders.

(iv) The Liquor Distribution Bureau maintains a regulated channel of distribution to fulfill the public demand for distilled spirits and fortified wine through agency liquor stores.

(v) The Cannabis Laboratory Program is responsible for auditing third party testing laboratories to ensure product safety and consumer protection. This is achieved through onsite laboratory audits and continuous offsite seed-to-sale monitoring of testing activities, test results, and sampling. This program is also responsible for staying current with the latest in cannabis science, public health, and laboratory science along with providing technical expertise for the department.

(d) The Information Management and Collections Division is responsible for collecting, managing, and processing payments and tax returns and consists of two bureaus.

(i) The Collections Bureau collects delinquent department liabilities and debts owed to other state agencies and local government entities through a variety of collection activities. In addition, the bureau coordinates the offset of payments from state agencies against debts owed to other state agencies and local government entities considered uncollectible.

(ii) The Information Management Bureau processes tax information, returns, and payments, and ensures the integrity and security of that data. The bureau also maintains and advances electronic alternatives for submission of data to meet the changing demands of tax compliance.

(e) The Property Assessment Division administers Montana's property tax laws, including the valuation of all taxable property for property tax purposes. The division ensures that property classes for agricultural and forest land, residential and commercial property, and business equipment are valued uniformly and equally throughout the state. The division provides each tax jurisdiction with the total taxable value of property in the jurisdiction and local governments use these certified values to determine property taxes used to fund important services such as public schools and road construction.

(f) The Technology Services Division serves as the technological foundation for the department and consists of two bureaus.

(i) The Applications Development Bureau provides software development and maintenance support for the department's core systems and business and individual income tax and property assessment software applications.

(ii) The Technical Operations Bureau provides server and computer support for department hardware and software systems, as well as quality assurance oversight on new and system upgrades. The bureau is made up of two groups: Technical Operations Support (TOS) and Quality Assurance (QA). TOS manages the server and endpoint support, and QA ensures the integrity and performance of department systems by providing guidance, direction, and training for testing and maintaining systems.

(3) Two advisory committees are statutorily attached to the department for administrative purposes only. The committees have no rulemaking or adjudicating authority.

(a) The Agricultural Land Valuation Advisory Committee, with members appointed by the Governor, was created under the authority of 15-7-201, MCA.

(b) The Forest Lands Taxation Advisory Committee, with members appointed by the Governor and legislative leaders, was created under the authority of 15-44-103, MCA.

(4) The Board of Review, established by 30-16-302, MCA, is attached to the department for administrative purposes only. The board oversees the eStop Business Licenses Program and has separate rulemaking authority under 30-16-104, MCA.

(5) General inquiries regarding the department may be addressed to the Director's Office. Specific inquiries regarding the functions of the divisions may be addressed to the division administrator. All requests for hearings, declaratory rulings, and participation in rulemaking activities may be addressed to the Director's Office.

(6) The department's division offices may be contacted at the following addresses:

(a) For Director, Deputy Director, Director's Office, Business and Income Taxes Division, and Technology Services Division:

Sam W. Mitchell Building - 125 North Roberts

P.O. Box 5805, Helena, Montana 59604-5805

(b) For Legal Services Office

Sam W. Mitchell Building - 125 North Roberts

P.O. Box 7701, Helena, Montana 59604-7701

Alcoholic Licensing Bureau and Liquor Distribution Bureau

2517 Airport Road

P.O. Box 1712, Helena, Montana 59624-1712

For Cannabis Licensing Bureau and Compliance Bureau

Sam W. Mitchell Building - 125 North Roberts

P.O. Box 5835, Helena, Montana 59604-5835

(d) For Information Management and Collections Division

Donovan Building - 340 North Last Chance Gulch

P.O. Box 5805, Helena, Montana 59604-5805.

(e) For Property Assessment Division, Central Office

Donovan Building - 340 North Last Chance Gulch

P.O. Box 8018, Helena, Montana 59604-8018.

(7) Web Site: mtrevenue.gov.

(8) Customer Service Call Center: (406) 444-6900.

(9) The Department of Revenue organizational and division functional charts follow.

Official policy figure

History

Authorizing statute(s): 2-4-201, MCA
Implementing statute(s): 2-4-201, 2-15-1301, 2-15-1311, MCA
History: Eff. 12/31/72; AMD, Eff. 11/5/73; AMD, Eff. 8/5/74; AMD, Eff. 10/5/75; AMD, Eff. 1/2/77; AMD, Eff. 7/1/80; AMD, Eff. 7/1/81; AMD, Eff. 3/31/82; AMD, Eff. 4/30/86; AMD, Eff. 12/31/89; AMD, Eff. 9/30/91; AMD, Eff. 9/30/93; AMD, Eff. 6/30/98; AMD, Eff. 12/31/98; AMD, Eff. 12/31/01; AMD, Eff. 12/31/02; AMD, Eff. 9/30/03; AMD, Eff. 12/31/03; AMD, Eff. 3/31/04; AMD, Eff. 12/31/04; AMD, Eff. 3/31/06; AMD, Eff. 3/31/08; AMD, Eff. 9/30/10; AMD, Eff. 3/31/12; AMD, Eff. 9/30/13; AMD, Eff. 12/31/13; AMD, Eff. 6/30/14; AMD, Eff. 6/30/16; AMD, Eff. 6/30/17; AMD, Eff. 6/30/18; AMD, Eff. 10/31/19; AMD, Eff. 7/1/21; AMD, Eff. 8/9/25.

Chapter 42.2 General Department Rules

Subchapter 42.2.1 Procedural Rules

Mont. Admin. R. 42.2.101 Model Procedural Rules

(1) The Department of Revenue adopts and incorporates by reference the model procedural rules, as amended, promulgated by the Attorney General.

(2) The model procedural rules may be found in Title 1, chapter 3, of the Administrative Rules of Montana.

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-4-201, 2-4-202, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 1690, Eff. 12/28/79.

Mont. Admin. R. 42.2.102 Introduction

(1) A person taking or wishing to take a particular action may be unsure whether a department rule or statute applies to that action. Section 2-4-501 , MCA, provides a person the opportunity to petition the department for a declaratory ruling as to the applicability of a statute, regulation, or order applicable to a petitioner's activity or proposed activity.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-501, MCA
History: NEW, 2000 MAR p. 1340, Eff. 5/26/00.

Mont. Admin. R. 42.2.103 Content of Petition

(1) A petition for declaratory ruling must be typewritten or printed.

(2) The petition must include:

(a) the name and address of petitioner;

(b) detailed statement of the facts upon which petitioner requests the department to base its declaratory ruling;

(d) the statute, rule or order for which petitioner seeks a declaratory ruling;

(e) the questions presented;

(f) propositions of law asserted by petitioner;

(g) the specific relief requested; and

(h) the name and address of any person known by petitioner to be interested in the requested declaratory ruling.

(3) The following sample form should be used.

BEFORE THE DEPARTMENT OF REVENUE

OF THE STATE OF MONTANA

In the matter of (summary) Example: ) PETITION FOR

the application of John Doe, a liquor ) DECLARATORY RULING

license owner, for a declaratory ruling )

on the applicability of 16-4-413 , MCA, )

to his new location )

Petitioner's name and address is (provide name and address of petitioner) .
(Provide summary of facts) . (Example: Petitioner previously applied for the transfer of ownership and location of a Montana beer/wine license for on-premises consumption, pursuant to the floor plan submitted with the application. Petitioner's application to transfer was granted by the department's hearing examiner on July 17, 1997, but was denied by the Director of the department on December 19, 1997.

Petitioner intends to apply to the department for transfer of license to a new premises to be located in an addition to the same building.

The new license application will apply only to the proposed new premises defined by the submitted floor plan. The new premises would have its own entrance/exit door to the outside, and would also have its own restrooms. The connecting door to the old premises is able to be locked blocking it off from the new premises.

Petitioner contends that the proposed new premises constitutes a different premises than the old premises for which the previous license transfer application was denied. Section 16-4-413 , MCA. Before taking any further action, the Petitioner must know whether the department considers that the new premises constitutes a different premises than the premises previously denied.)

The statute, regulation, or order to which Petitioner requests a declaratory ruling is (list statute, regulation or order) which provides (list the pertinent provisions of the statute, regulation, or order identified above) .
The question presented for declaratory ruling by the department is (explain the questions being presented to the department) (Example: Petitioner seeks a declaration that the proposed new premises constitutes a different premises than that which was previously denied, thus negating the five-year moratorium of section 16-4-413 , MCA.)
Petitioner contends that (provide reasons) . (Example: The proposed new premises constitutes premises that are different from that which were previously applied for and denied, and thus the five-year moratorium under 16-4-413 , MCA, is inapplicable to such proposed new application and the department may consider such proposed new application and issue a license for the proposed new premises.)
Petitioner requests a declaratory ruling that (provide the ruling that is sought by the petitioner) . (Example: The proposed new premises constitutes a different premises from that which was denied a transfer application, and thus the five-year moratorium outlined in 16-4-413 , MCA, is inapplicable to such proposed new application and the department may consider such proposed new application and issue a license for the proposed new premises.)
(Option 1:) Petitioner knows of no other party similarly affected or otherwise interested.

(Option 2:) Petitioner knows of the following parties who are similarly affected or otherwise interested: (list the parties that are similarly affected) .

Dated this ____ day of ___________, ____.

____________________________

(Name of Petitioner)

(4) The department reserves the right to ask additional questions if the petitioner's intent is not clearly stated.

(5) The petition should be mailed directly to the director of the Department of Revenue, P.O. Box 5805, Helena, Montana 59604-5805.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-501, MCA
History: NEW, 2000 MAR p. 1340, Eff. 5/26/00.

Mont. Admin. R. 42.2.104 Acceptance or Denial of a Petition for a Declaratory Ruling

(1) Upon receipt of a petition, the department will make its best effort to either accept or deny the petition within 60 days of receipt of the petition.

(2) If the petition is accepted, the department will notify the petitioner of the acceptance and how the department intends to proceed regarding the matter.

(3) If for good cause shown, the department determines an oral hearing is necessary, the petitioner will be provided notice of the date, time, and place for the hearing.

(4) If the department denies a petition for declaratory ruling, the department shall mail a copy of the order denying the petition to all persons named in the petition.

(5) An order denying a petition must include a statement of the grounds for the denial and the petitioner's right to appeal the denial for a declaratory ruling within 30 days to the district court.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-315, 2-4-501, 2-4-702, MCA
History: NEW, 2000 MAR p. 1340, Eff. 5/26/00.

Mont. Admin. R. 42.2.105 Record of Declaratory Ruling

(1) The record in a declaratory ruling proceeding shall include:

(a) the petition;

(b) a statement of matters officially noticed;

(c) if for good cause shown the department has held hearings on the petition, a stenographic record of the proceedings when requested by a party; and

(d) the department ruling.

(2) The stenographic record of oral proceedings or any part thereof shall be transcribed on request of any party. Unless otherwise provided by statute, the cost of transcription shall be paid by the requesting party.

(3) Pursuant to 2-4-703 , MCA, the petitioner may appeal the declaratory ruling within 30 days to the district court.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-501, 2-4-614, MCA
History: NEW, 2000 MAR p. 1340, Eff. 5/26/00.

Mont. Admin. R. 42.2.106 Effect

(1) A declaratory ruling is binding between the department and petitioner concerning the set of facts presented in the petition.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-501, MCA
History: NEW, 2000 MAR p. 1340, Eff. 5/26/00.

Mont. Admin. R. 42.2.115 Final Agency Decisions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-217, 16-1-303, MCA
Implementing statute(s): 2-4-621, 2-4-623, 2-4-631, 2-15-112, 2-15-1302, 15-2-302, 16-1-302, 16-4-411, MCA
History: NEW, 2003 MAR p. 487, Eff. 3/14/03; REP, 2007 MAR p. 477, Eff. 4/13/07.

Subchapter 42.2.2 Administrative Summons

Mont. Admin. R. 42.2.201 Restriction on Use of Taxpayer or Licensee Lists

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-6-106, MCA
History: Eff. 12/31/72; REP, 1992 MAR p. 2077, Eff. 9/11/92.

Mont. Admin. R. 42.2.202 Definitions

The following definitions apply to terms found in this subchapter:

(1) "Contact person" means the department representative designated to answer questions regarding the information contained in the administrative summons.

(2) "Interested person" means the taxpayer to whom the summons relates or any other person to whom the records or testimony pertains, including a third-party record keeper.

(3) "Records" means books, papers, and other data, whether in paper or electronic form.

(4) "Third-party record keeper" means, but is not limited to:

(a) an attorney;

(b) an accountant;

(d) a conservator;

(e) a bank or credit union;

(f) a broker-dealer or investment advisor; or

(g) any other person engaged in the making or keeping of records involving transactions of other individuals.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-104, 15-1-301, 15-1-302, MCA
History: NEW, 2006 MAR p. 681, Eff. 3/10/06.

Mont. Admin. R. 42.2.203 Administrative Summons

(1) Section 15-1-301 , MCA, authorizes the department to summon witnesses to appear and give evidence and produce documents and records. The statute also provides for taking the depositions of witnesses on notice to the interested party if necessary.

(2) The rules in this subchapter govern department investigatory actions that may or may not result in a tax assessment against a particular taxpayer and do not apply to a disputed matter that has been referred to the department's Office of Dispute Resolution as provided in ARM 42.2.615.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-104, 15-1-301, 15-1-302, MCA
History: NEW, 2006 MAR p. 681, Eff. 3/10/06.

Mont. Admin. R. 42.2.204 Issuance of an Administrative Summons

(1) An administrative summons issued under the authority of 15-1-301 , MCA, will be issued by the director or the director's designee.

(2) Financial institutions may, at their discretion, designate a specific office where service of administrative summons may be accepted. If no such designation is made, the department shall serve the summons on the financial institution in the city where the department believes the requested information may be found.

(3) The summons may require the personal appearance and testimony of a person in addition to the production of records, or it may require only the production of records.

(4) If the personal appearance and testimony of a person is required, the summons will specify the date, time, and place where the appearance shall occur.

(5) If only the production of records is required, the items must be delivered to the department at the Sam W. Mitchell Building, 125 N. Roberts, Helena, Montana 59604, or to the location designated on the administrative summons on or before the date and time specified in the summons.

(6) The summons will:

(a) to the best of the department's knowledge, identify the taxpayer to whom the summons relates or the other person to whom the records pertain;

(b) will provide information to enable the person summoned to locate the records required under the summons;

(d) be personally served as provided in Rule 45(b) of the Montana Rules of Civil Procedure;

(e) state the fees for appearing, which shall be the same amount witnesses are compensated in Montana district court; and

(f) include a state warrant (check) for one day's witness fee and mileage.

(7) A form for claiming additional witness fees will be provided when the person appears before the department.

(8) Questions about the identity of any person or the scope of a record request should be addressed to the contact person.

(9) If the summons requires the giving of testimony or relates to the production of any records with respect to any person, known to the department at the time of the issuance of the summons, other than the person who is identified in the summons (third-party recordkeeper) , the department shall, within three days, mail a copy of the summons by registered or certified mail, to that person. Additionally, the department will explain the person's right to bring a proceeding to quash the summons. In no event shall the department require the production of documents or the giving of testimony earlier than 30 days from the issuance to the third-party recordkeeper.

(10) On receipt of a summons to which this section applies for the production of records, the summoned party, including a third-party record keeper shall proceed to assemble the records requested, or such portion thereof as the department may prescribe, and shall be prepared to produce the records pursuant to the summons on the day on which the records are to be examined.

(11) In the event that a third-party recordkeeper incurs copying costs in excess of $50 for any one administrative summons issued by the department, the department shall reimburse the third-party recordkeeper for those copying costs in excess of $50. Reimbursement will be at reasonable commercial rates, such as a rate charged by a private copy service. Calculating the amount of copying costs incurred by a third-party recordkeeper will be determined by examining the actual costs expended (as shown on a receipt or invoice) or by applying a reasonable commercial rate per page copied and produced to the department, whichever amount is lower.

(a) Taxpayers will not be reimbursed for their own copying charges.

(b) Taxpayers or third-party recordkeepers will not be reimbursed for any other costs associated with the production of the requested information, except for the payment for mileage and witness fees stated in this rule.

(12) Nothing in this section may be construed to limit the department's ability to obtain information, other than by summons, through formal or informal procedures authorized by 15-1-301 , MCA.

History

Authorizing statute(s): 15-1-201, 25-5-103, MCA
Implementing statute(s): 2-4-104, 15-1-301
History: NEW, 2006 MAR p. 681, Eff. 3/10/06.

Mont. Admin. R. 42.2.205 Process to Quash an Administrative Summons

(1) Interested persons served with notice of an administrative summons may begin a proceeding to quash the summons in either the district court in the county in which the person resides or in the district court of the first judicial district not later than the 20 days after the notice of summons is received by the interested person. Notice is deemed given as provided for in Rule 45, Montana Rules of Civil Procedure.

(2) If a person begins any such proceeding, such person shall mail, by registered or certified mail, a copy of the petition to the person summoned and to the department's contact person.

(3) In any proceeding to quash the summons, the department may seek compliance with the summons.

(4) If no proceeding to quash is brought within the period proscribed in (1) , the interested person may not interfere with the voluntary giving of testimony or disclosure of records sought in the department's summons. Failing to initiate such a proceeding to quash, however, does not prohibit an interested person from intervening in a subsequent action brought by the department to enforce the summons.

History

Authorizing statute(s): 15-1-201, 25-5-103, MCA
Implementing statute(s): 15-1-301, MCA
History: NEW, 2006 MAR p. 681, Eff. 3/10/06.

Mont. Admin. R. 42.2.206 Process to Intervene

(1) An interested person may attend a deposition and may intervene in any proceeding the department initiates to enforce the summons and such person is bound by the decision in such proceeding whether or not the person intervenes.

(2) Any person entitled to notice of a summons may begin a proceeding to intervene in either the district court in the county in which the person resides or in the district court of the First Judicial District not later than 20 days after the notice of administrative summons is received. Notice is deemed given as provided for in Rule 45, Montana Rules of Civil Procedure.

(3) If a person intervenes, the person shall mail, by registered or certified mail, a copy of the petition to the person summoned and to the department's contact person. In any proceeding to intervene, the department may seek to compel compliance with the summons.

History

Authorizing statute(s): 15-1-201, 25-5-103, MCA
Implementing statute(s): 15-1-301, MCA
History: NEW, 2006 MAR p. 681, Eff. 3/10/06.

Mont. Admin. R. 42.2.207 Enforcement of Administrative Summons

(1) In case of disobedience of any summons issued and served under the rules of this subchapter or of the refusal of any witness to testify as to any material matter with regard to which the witness may be interrogated in a proceeding before the department, the department will apply to a district court in the state for an order to compel compliance with the summons or the giving of testimony.

(2) If another method of summons enforcement or compelling testimony is provided by statute, the department may use it as an alternative to the methods provided for in the rules of this subchapter.

(3) If the department initiates an action to enforce a summons, the department will, within three days after initiating the enforcement action, notify the summoned person and any person identified in the summons of the pending action.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-4-104, 15-1-302, MCA
History: NEW, 2006 MAR p. 681, Eff. 3/10/06.

Subchapter 42.2.3 Public Access and Participation

Mont. Admin. R. 42.2.301 Open Meetings

(1) All meetings of the department shall be open to the public subject to the provisions of 2-3-203 , MCA.

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-203, MCA
History: NEW, Eff. 4/6/76.

Mont. Admin. R. 42.2.302 Requests for Information

(1) Citizens desiring information about anything mentioned in these rules or about anything concerning the department and public participation should contact the Department of Revenue, P.O. Box 5805, Helena, Montana 59604-5805, or visit the department's Internet web site at revenue.mt.gov.

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-103, 2-3-111, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.303 Appointments with Director, Deputy Director, or Division Administrators

(1) Any individual or group of individuals may make appointments to meet with the director, the deputy director, or division administrators regarding any matter of concern to those individuals and under the responsibility of the department. Such appointments may be made by contacting the Department of Revenue, P.O. Box 5805, Helena, Montana 59604-5805, telephone (406) 444-6900.

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-103, 2-3-111, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 841, Eff. 5/7/16.

Mont. Admin. R. 42.2.304 Definitions

The terms used by the department are, in great part, defined in Titles 15, 16, 39, and 72, MCA. In addition to these statutory definitions, the following definitions apply to ARM Title 42, unless context of a particular chapter or rule provides otherwise:

(1) "Amended return" is a return that amends the original return defined in (36).

(2) "Ancestor" means a lineal ancestor and a collateral ancestor if related by blood. Sections 72-11-102, 72-11-103, and 72-11-104, MCA, describe how kinship and degrees of kinship are determined.

(3) "Annual accounting period" means the accounting period used for federal income tax purposes.

(4) "Association" means an organization of people having a common interest.

(5) "Business activity" refers to the transactions and activity occurring in the regular course of a particular trade or business of a taxpayer.

(6) "Calendar year" means a 12-month period beginning January 1 and ending December 31.

(7) "Compensation" means wages, salaries, commissions, and any other form of remuneration paid to employees for personal services. Payments made to an independent contractor or any other person not properly classifiable as an employee are excluded. Only amounts paid directly to employees are included in the payroll factor. Amounts considered paid directly include the value of board, rent, housing, lodging, and other benefits or services furnished to employees by the taxpayer in return for personal services; provided, that such amounts constitute income to the recipient under the federal IRC. In the case of employees not subject to the federal IRC, e.g., those employed in foreign countries, the determination of whether such benefits or services would constitute income to the employees shall be made as though such employees were subject to the federal IRC.

(8) "Contiguous parcels of land" means separate land acreage in the same ownership that are adjacent.

(9) "Corporation" or "C corporation" means a corporation, limited liability company, or other entity treated as an association for federal income tax purposes. The term does not include an S corporation or a disregarded entity. The term includes a regulated investment company (RIC) as defined in IRC 851, a real estate investment trust (REIT) as defined in IRC 856, and a corporation that has elected to be treated as a real estate mortgage investment conduit (REMIC) as provided in IRC 860D.

(10) "Deficiency assessment" means an amount greater than the amount disclosed on a return or report filed with the department.

(11) "Department" means the Department of Revenue as defined in 2-15-1301, MCA.

(12) "Dependent" means any individual listed in 15-30-2115, MCA, as amended, over one-half of whose support for the calendar year in which the taxable year of the taxpayer begins was received from the taxpayer. In determining whether or not an individual received for a given calendar year over one-half of his support from the taxpayer, there shall be taken into account the amount of support received from the taxpayer as compared to the entire amount of support the individual received from all sources, including support which the individual himself supplied.

(13) "Descendant" means a lineal descendant and a collateral descendant related by blood. Sections 72-11-102, 72-11-103, and 72-11-104, MCA, describe how kinship and degrees of kinship are determined.

(14) "Discretion" means the power to do or to refrain from doing a certain thing.

(15) "Disregarded entity" means a business entity that is disregarded as an entity separate from its owner(s) for federal income tax purposes. The term includes a limited liability company with one owner, a qualified subchapter S subsidiary not treated as a separate corporation, and a partnership, syndicate, group, pool, joint venture, or other unincorporated organization electing under IRC 761 to be excluded from application of partnership tax rules. A corporation is not a disregarded entity by virtue of being included in a federal consolidated return.

(16) "Domiciled" means having a residence in the state of Montana as stated in 1-1-215, MCA.

(17) "Earned income" means:

(a) wages, salaries, or professional fees, and other amounts received as compensation for personal services actually rendered; and

(b) the amount of the taxpayer's net earnings from a trade or business which is wholly or partially subject to the federal self-employment tax.

(18) "Economic hardship" means the financial inability of the taxpayer to pay a tax when the tax is due as determined by the department through a review of various financial documents and inquiries.

(19) "Employee" means:

(a) Any individual who performs services for another individual or organization having the right to control the employee as to the services to be performed and as to the manner of performance. The power to control, rather than the actual exercise of control, is the important factor. Designation of an individual as, or determination by an appropriate authority that an individual is an employee for purposes of industrial accident insurance (workers' compensation), unemployment compensation, federal Social Security, or federal withholding tax will establish that person as an employee.

(b) All classes or grades of employees are included within the relationship of employer and employee. Thus, superintendents, managers, other supervisory personnel, and corporate officers are employees.

(20) "Employer" means any person or organization for whom an individual performs any service as an employee. However, if the person or organization for whom an individual performs services does not have control of the compensation payments, the term employer means the person or organization having control of the payment of such compensation. State income tax withheld, or that should have been withheld, and will be collected from the person or organization having control of the payment of such compensation.

(a) An employer may be an individual, corporation, limited liability company, partnership, estate, trust, association, joint venture, or other unincorporated group or entity. The term employer also includes all religious, educational, charitable, and social organizations or societies and all governmental agencies at the federal, state, and local level, including school districts, towns, counties, and other political subdivisions.

(21) "Final order" means an order entered by the department or a court of review which either has not been appealed on a timely basis or to which no appeal is available.

(22) "Fiscal year" means any 12-month period ending on the last day of any month other than December.

(23) "Household" means a family living together.

(24) "Immediate family member" means any individual who is a lineal descendant of the taxpayer and also includes their spouse. Stepchildren are considered lineal descendents if that relationship was created before the child's eighteenth birthday.

(25) "Incorporated city or town" means any municipality or county area in which the government body has complied with all incorporation provisions outlined in Title 7, MCA.

(26) "Information return" means a pass-through entity information return described in ARM 42.9.301, 42.9.401, 42.9.501, 42.9.510, 42.9.520, 42.9.530, and 42.9.540.

(27) "Internal Revenue Code" (IRC) means the Internal Revenue Code of 1986, as amended.

(28) "Internal Revenue Service" (IRS), means the federal bureau of the Department of the Treasury of the United States of America with the duties set forth in 26 USCA 8022.

(29) "Limited liability company" has the same meaning given it in the Montana Limited Liability Company Act, Title 35, chapter 8, MCA, and includes limited liability companies formed under the laws of Montana and the laws of other states and foreign countries.

(30) "Lookback period," for purposes of the voluntary disclosure program, means the filing periods agreed upon for which returns must be filed and all taxes and statutory interest must be paid under a voluntary disclosure agreement.

(31) "Manufacturer" means any person who produces a product for the purpose of resale.

(32) "Montana source income" is defined in 15-30-2101, MCA, and the statute should be consulted to determine whether particular income is "Montana source income" obligating a nonresident to file a Montana individual income tax return, and a pass-through entity to file a Montana information return. In general, all income from work performed in the state, real or personal property located in the state, and business conducted in the state is Montana source income. Gain realized from transfer of real or personal property located in the state remains Montana source income notwithstanding that recognition of the gain is deferred and regardless of the deferral mechanism.

(a) Gain realized from an installment sale of Montana property retains its Montana source income character and must be reported as the payments are received.

(b) Gain realized on the transfer of Montana property in a like-kind exchange retains its Montana source income character and must be reported when the gain is recognized in a subsequent taxable transaction.

(33) "Noncontiguous parcels of land" means land acreage in the same ownership that meets one of the two following standards:

(a) acreages that do not touch, but are each an integral part of the operation of a bona fide agricultural operation; or

(b) acreages that would meet the definition of contiguous contained in (8) were the acreages not separated by one or more of the following features only:

(i) roads and highways;

(ii) navigable rivers and streams;

(iii) local taxing authority boundaries;

(iv) railroad lines; or

(v) federal or state land that is leased from the federal or state government by a taxpayer whose land ownership is contiguous to the federal or state land.

(34) "Neglect" means the failure to exercise ordinary business care and prudence.

(35) "Nonresident" means any individual, estate, trust, partnership, or other organization, excluding corporations, not a resident of Montana.

(36) "Notice of Assessment (NOA)" means the first notice provided to the taxpayer of an amount owed to the department or of a violation. It may include, but is not limited to, a notice of refund reduction, net operating loss adjustment, tax debt, fine, or notice of a violation of the laws administered by the department. It does not include notices pertaining to inheritance taxes, estate taxes, or liquor licensing matters.

(37) "Original return" means the return required to be filed on or before the due date.

(38) "Ownership interest" means the involvement in the business operated by someone who owns some or all of the assets of the business, shares in the financial risks, is entitled to any portion of the profits, or any portion of the liabilities and losses of the business. Ownership interest includes the right to control the location or ownership of a business. Examples of ownership interests include the authority to participate in such business decisions as sale of the business, relocation of the business, change or creation of any financial arrangements for loan repayment or funding sources, or any other responsibilities regarding the management of the business. This definition applies to an ownership interest for purposes of rules contained in the ARM Title 42, unless otherwise specified by law.

(39) "Paid" and "received" are construed in the context of an acceptable accounting method used to compute taxable income.

(40) "Partnership" means any partnership, including a general partnership, a limited partnership, a limited liability partnership, a professional partnership, or any other entity, treated as a partnership for federal income tax purposes. The term includes an unincorporated entity that has elected to be treated as a real estate mortgage investment conduit (REMIC) as provided in IRC 860D.

(41) "Pass-through entity" means a partnership, an S corporation, and a disregarded entity.

(42) "Pass-through entity information return" means the same as (26).

(43) "Payee" means a person to whom or to whose order a bill, note, check, or money order is made payable.

(44) "Person" means an individual, estate, trust, receiver, firm, partnership, corporation, cooperative association, limited liability company, joint venture, syndicate, or other business entity, however formed.

(a) A person may not include:

(i) federal government entities or their subdivisions; or

(ii) enrolled Native American entities, including tribal offices or businesses owned by the tribe and operating on the tribal reservation.

(45) "Qualified entity," for purposes of the voluntary disclosure program, is a corporation, trust, limited liability company, or partnership that meets the conditions in ARM 42.2.310.

(46) "Qualified individual," for purposes of the voluntary disclosure program, is an individual who meets the conditions in ARM 42.2.310, or is a beneficiary of a trust that meets the conditions in 42.2.310.

(47) "Qualified partner," for purposes of the voluntary disclosure program, is an individual or entity who is treated as a partner of a qualified entity for federal income tax purposes and who themselves meets the conditions of ARM 42.2.310.

(48) "Qualified shareholder," for purposes of the voluntary disclosure program, is a shareholder in an S corporation that is a qualified entity as defined in (44), and who themselves meets the conditions of ARM 42.2.310.

(49) "Quarter" means quarters that end:

(a) March 31;

(b) June 30;

(d) December 31.

(50) "Reasonable cause" means the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return, pay the tax within the prescribed time, or object to a department action as provided for in ARM 42.2.510. Examples of what does or does not constitute reasonable cause may be found in ARM 42.2.512.

(51) "Reasonable time" means within five years or the normal statute of limitations, whichever is later.

(52) "Residence" means the same as (16).

(53) "Resident" means natural persons and includes, for the purpose of determining liability to the tax imposed by the state, any person domiciled in the state of Montana and any other person who maintains a permanent place of abode within the state even though temporarily absent from the state and who has not established a residence elsewhere.

(54) "Retail business" means individuals, firms, fiduciaries, partnerships, corporations, trusts, organizations, or associations engaged in the business of selling products to the consumer.

(55) "Return information" includes a taxpayer's identity, the nature, source, or amount of the taxpayer's income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, over-assessments or tax payments, or any other data received by, recorded by, prepared by, furnished to, or collected by the department with respect to a return or with respect to the determination of the existence or possible existence of liability or the amount of liability of any person under Title 15, MCA, for any tax, penalty, interest, fine, forfeiture, or other imposition of any offense. The term does not include data in a form that cannot be associated with or otherwise identify, directly or indirectly, a particular taxpayer.

(56) "S corporation" means an incorporated entity for which a valid federal S corporation election is in effect. "S corporation" and "subchapter S corporation" are synonymous. The term "small business corporation" is also synonymous with "S corporation," except that certain S corporations are allowed to continue to file Montana corporation license tax returns as provided in 15-30-3301, MCA.

(57) "Settlement" means a compromise, agreement, or arrangement between parties which, in consideration of mutual concessions, terminates a dispute.

(58) "Situs" means location.

(59) "Statement of Account (SOA)" means a notice provided to the taxpayer summarizing amounts owed to the department.

(60) "Support" includes food, shelter, clothing, medical and dental care, education, and the like. Generally, the amount of an item of support will be the amount of expense incurred by the one furnishing such item. However, if the item of support furnished is in the form of property or lodging, it will be necessary to measure the amount of such item in terms of its fair market value.

(61) "Taxable year," as stated in section 441(b) of the IRC, means:

(a) the taxpayer's annual accounting period, if it is a calendar year or a fiscal year;

(b) the calendar year if the taxpayer does not keep books or does not have an annual accounting period that qualifies as a fiscal year; or

(c) the period for which the return is made, if a return is made for a period of less than 12 months, the so-called "short period" defined under section 443 of the IRC. Generally, a taxable year cannot cover more than 12 calendar months.

(62) "Taxpayer" means any person (which may include any corporation, partnership, firm, association, or person acting as a business entity) or fiduciary, resident or nonresident, subject but not limited to, a tax, license fee, royalty, or permit imposed by the state of Montana or a liability for payment of a debt collected by the department.

(63) "Write-off of collection" means removal of an assessment from active department enforcement and monitoring procedures, and does not mean a tax assessment is forgiven.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 1-1-215, 15-1-102, 15-1-206, 15-1-601, 15-30-2101, 15-30-2104, 15-30-2111, 15-30-2602, 15-30-3301, 15-30-3302, 15-30-3311, 15-30-3312, 15-30-3313, 15-30-3321, 15-31-101, 15-31-111, MCA
History: NEW, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2006 MAR p. 340, Eff. 2/10/06; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.305 Availability and Retention of Taxpayer Records

(1) Unless otherwise provided by law, all taxpayers who are required to maintain records shall make such records available to the department during normal business hours. In this regard, the department, or its duly authorized agents, may enter any office or other area where the provider maintains business records to examine the records and other supporting data from which the tax returns were prepared. These audits may be conducted at the same time as audits are conducted for other state taxes.

(2) Records and other supporting data used to prepare the tax returns must be maintained for a period of five years from the due date of the return or five years from the date of payment, whichever is later.

History

Authorizing statute(s): 10-4-203, 10-4-212, 15-1-201, 15-53-155, 15-60-104, 16-10-104, 16-11-103, MCA
Implementing statute(s): 10-4-203, 10-4-207, 10-4-212, 15-53-150, 16-11-118, 16-11-202, 16-11-203, MCA
History: NEW, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.306 Penalty and Interest

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-1-216, 16-10-104, 16-11-103, MCA
Implementing statute(s): 15-1-206, 15-1-207, 15-1-216, 15-1-701, 15-1-708, 15-30-2512, 16-1-409, 16-1-411, 16-11-143, MCA
History: NEW, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14; REP, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.307 Accounting Methods

(1) The taxpayer's method of accounting must be the method of accounting for federal income tax purposes. If the taxpayer's accounting method is changed for federal income tax purposes, the accounting method for Montana income tax purposes is automatically changed to reflect the same method.

(2) Acceptable accounting methods include the cash basis, accrual method, a hybrid of the cash and accrual methods, or any other method permitted under section 446 of the IRC.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2101, 15-30-2111, 15-31-113, 15-31-114, MCA
History: Eff. 12/31/72; AMD and TRANS, from ARM 42.15.211, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.308 Nonresident Calculation of Montana Source Income Realized and Recognized When Montana Property Is Relinquished as Part of a Section 1031 Exchange

(1) Gain realized on the transfer of Montana real or tangible personal property retains its Montana source income character and must be reported if and when the gain is recognized for federal income tax purposes.

(2) When the Montana property is relinquished in a section 1031 exchange for like-kind property, the gain realized as shown on the taxpayer's U.S. Treasury Form 8824 is generally the amount of Montana source income. If, however, the Montana property was itself acquired in a prior like-kind exchange as replacement property for property located outside the state, Montana source income does not include the gain attributable to the out-of-state property that has been deferred from the prior exchange as shown on the taxpayer's U.S. Treasury Form 8824 for that exchange. The following examples illustrate how the Montana source income may be calculated in different situations:

(a) Example 1 - A nonresident relinquishes unimproved Montana land with a fair market value of $100,000 and an adjusted tax basis of $10,000 in exchange for Wyoming property with a fair market value of $90,000 and $10,000 cash, and incurs exchange expenses of $2,000. The $88,000 realized gain reported on the taxpayer's Form 8824 is Montana source income, of which $8,000 is recognized and reportable in the year of sale and $80,000 is deferred and must be reported if and when the gain is recognized for federal income tax purposes:

Form 8824 filed with respect to Montana property relinquished

15 | Cash received, FMV of other property received, plus net liabilities assumed by other party, reduced (but not below zero) by any exchange expenses | 8,000 16 | FMV of like-kind property you received | 90,000 17 | Add lines 15 and 16 | 98,000 18 | Adjusted basis of like-kind property you gave up, net amounts paid to other party, plus any exchange expenses not used on line 15 | 10,000 19 | Realized gain (or loss) . Subtract line 18 from line 17 | 88,000 20 | Enter the smaller of line 15 or line 19, but not less than zero | 8,000 21 | Ordinary income under recapture rules | 0 22 | Subtract line 21 from line 20. If zero or less, enter -0-. If more than zero, enter here and on Schedule D or Form 4797, unless the installment method applies | 8,000 23 | Recognized gain. Add lines 21 and 22 | 8,000 24 | Deferred gain (or loss) . Subtract line 23 from line 19 | 80,000 25 | Basis of like-kind property received. Subtract line 15 from the sum of lines 18 and 23 | 10,000

(b) Example 2 - Same facts as in (2) (a) except the Montana property included improvements with a fair market value of $12,000 and $1,000 is reportable as ordinary income under the recapture rules because of depreciation deductions taken with respect to those improvements. The result is the same as the result in (2) (a) , except that $1,000 of the $8,000 Montana source income recognized and reportable in the year of sale is ordinary income.

Form 8824 filed with respect to Montana property relinquished

21 | Ordinary income under recapture rules | 1,000 22 | Subtract line 21 from line 20. If zero or less, enter -0-. If more than zero, enter here and on Schedule D or Form 4797, unless the installment method applies | 7,000 23 | Recognized gain. Add lines 21 and 22 | 8,000 24 | Deferred gain (or loss) . Subtract line 23 from line 19 | 80,000 25 | Basis of like-kind property received. Subtract line 15 from the sum of lines 18 and 23 | 10,000

(c) Example 3 - Same facts as in (2) (a) except the Montana property relinquished was replacement property exchanged for Oregon property in a prior like-kind exchange. In the prior like-kind exchange, the deferred gain or loss, as shown on the nonresident's Form 8824 was $50,000. The nonresident's Montana source income is $38,000, the $88,000 gain realized shown on the Form 8824 filed with respect to relinquishment of the Montana property, less the $50,000 deferred gain as reported on the Form 8824 filed with respect to relinquishment of the Oregon property. Of the $38,000 Montana source income realized, the $8,000 recognized for federal income tax purposes in the year of sale is currently reportable and $30,000 is deferred and must be reported if and when the gain is recognized for federal income tax purposes.

Form 8824 filed with respect to Oregon property relinquished

24 | Deferred gain (or loss). Subtract line 23 from line 19 | 50,000

Form 8824 filed with respect to Montana property relinquished

15 | Cash received, FMV of other property received, plus net liabilities assumed by other party, reduced (but not below zero) by any exchange expenses | 8,000 16 | FMV of like-kind property you received | 90,000 17 | Add lines 15 and 16 | 98,000 18 | Adjusted basis of like-kind property you gave up, net amounts paid to other party, plus any exchange expenses not used on line 15 | 10,000 19 | Realized gain (or loss). Subtract line 18 from line 17 | 88,000 20 | Enter the smaller of line 15 or line 19, but not less than zero | 8,000 21 | Ordinary income under recapture rules | 0 22 | Subtract line 21 from line 20. If zero or less, enter -0-. If more than zero, enter here and on Schedule D or Form 4797, unless the installment method applies | 8,000 23 | Recognized gain. Add lines 21 and 22 | 8,000 24 | Deferred gain (or loss). Subtract line 23 from line 19 | 80,000 25 | Basis of like-kind property received. Subtract line 15 from the sum of lines 18 and 23 | 10,000

(3) The nonresident must report the deferred Montana source income realized on the relinquishment of the Montana property if and when the gain is recognized for federal income tax purposes. The amount of Montana source income recognized will never exceed the gain recognized for federal income tax purposes. The following examples illustrate how the Montana source income may be calculated in different situations:

(a) Example 1 - Same facts as in (2)(a). In a later tax year, the Wyoming replacement property is sold for $150,000, the taxpayer reporting taxable gain of $140,000 on their federal income tax return. The nonresident's $80,000 of Montana source income realized on the Montana property exchange that was deferred has been recognized for federal income tax purposes and must be reported as Montana source income when the nonresident files the Montana individual income tax return required in 15-30-2104, MCA.

(b) Example 2 - Same facts as in (3)(a), except the Wyoming replacement property is sold for $60,000 and $50,000 of taxable gain is reported on the taxpayer's federal income tax return. While $80,000 of Montana source income was realized but deferred on relinquishment of the Montana property, only $50,000 was recognized for federal income tax purposes. The nonresident must report the $50,000 of Montana source income recognized when the nonresident files the Montana individual income tax return required in 15-30-2104, MCA.

(c) Example 3 - Same facts as in (3)(a), except improvements with a cost of $75,000 are erected on the Wyoming property and depreciation deductions of $15,000 are claimed with respect to those improvements before the improved Wyoming property is sold for $150,000. On the date of sale the fair market value of the improvements, which have an adjusted basis of $60,000, is $70,000, and the fair market value of the Wyoming property acquired in the exchange, which has an adjusted basis of $10,000, is $80,000. Of the $80,000 of deferred Montana source income realized on relinquishment of the Montana property, $70,000 has been recognized for federal income tax purposes and must be reported when the nonresident files the Montana individual income tax required in 15-30-2104, MCA.

(d) Example 4 - Same facts as in (2)(c). The Wyoming replacement property is sold for $150,000. The $30,000 deferred Montana source income realized on relinquishment of the Montana property has been recognized for federal income tax purposes and must be reported when the nonresident files the Montana individual income tax return required in 15-30-2104, MCA.

History

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-30-2101, 15-30-2103, 15-30-2104, 15-30-2111, 15-30-2112, 15-30-3302, 15-30-3311, 15-30-3312, MCA
History: NEW, 2006 MAR p. 921, Eff. 4/7/06; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.309 Voluntary Disclosure

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-1-211, 15-30-305, MCA
Implementing statute(s): 15-1-206, 15-30-101, 15-30-105, 15-30-142, 15-30-304, MCA
History: NEW, 2006 MAR p. 921, Eff. 4/7/06; REP, 2008 MAR p. 340, Eff. 2/15/08.

Mont. Admin. R. 42.2.310 Voluntary Disclosure Program for Nonfiling Taxpayers

(1) The voluntary disclosure program allows qualified entities and individuals, and qualified shareholders, and partners of qualified pass-through entities to disclose their tax liabilities voluntarily and settle their tax obligations in a voluntary disclosure agreement. Affected taxpayers may contact the department directly as provided for in (3) or use the services of the Multistate Tax Commission's National Nexus Program. The department encourages those qualified entities, qualified shareholders, and qualified partners with a need to come into compliance with multiple states or other jurisdictions to use the services of the National Nexus Program to resolve their compliance issues. The National Nexus Program provides a single point of contact and substantially uniform procedures. Information regarding the National Nexus Program can be found at www.mtc.gov .

(a) If a taxpayer contacts the department directly, the department will not enter into a voluntary disclosure agreement on terms more favorable than the terms the taxpayer would have entered into through the services of the National Nexus Program.

(2) To qualify for a voluntary disclosure agreement with the department, a qualified entity, qualified shareholder, qualified partner, or qualified individual must meet all of the following criteria:

(a) have not filed a return for the tax type covered by the agreement within the last five years;

(b) have had no previous contact by the department or its agencies, including the Multistate Tax Commission, regarding a tax covered by the agreement, including but not limited to, notification of audit, review, assessment, request for information, letter from the department following a foreign company's registration with the Montana Secretary of State, or a letter from the department following a domestic company's formation by filing documents with the Montana Secretary of State;

(c) voluntarily come forward and make an application for a voluntary disclosure agreement that contains the information required by (3);

(d) agree to file returns specified in the agreement and pay all the taxes and statutory interest for the entire lookback period within the time period and manner specified in the agreement without further action by the department;

(e) agree to register with the Secretary of State (if a business entity), file returns, and pay all taxes for periods after the lookback period without further action by the department; and

(f) have not been a party to any criminal investigation or pending civil or criminal litigation for nonpayment, delinquency, or fraud in relation to any tax due.

(3) To request a voluntary disclosure agreement, a qualified entity, qualified shareholder, qualified partner and/or representatives or qualified individual must submit a written request to the department including the following information:

(a) if an entity:

(i) a full and accurate statement of the entity's activities for five immediately preceding filing periods;

(ii) a full and accurate statement of the entity's activities in Montana for five immediately preceding filing periods; and

(iii) the number of years the entity has been doing business in Montana;

(b) if an individual:

(i) a full and accurate statement of the individual's activities in Montana for five immediately preceding filing periods;

(ii) the addresses at which the individual has resided for the five immediately preceding filing periods; and

(iii) the number of years the individual maintained a place of abode in Montana;

(d) an explanation for the failure to register with the Secretary of State, if an entity;

(e) an explanation of the failure to file Montana returns and pay taxes;

(f) proposed voluntary disclosure agreement terms; and

(g) an estimate of the tax liability for the lookback period.

(4) A qualified entity or individual may preserve confidentiality by not revealing its name or any information that could readily identify the company or individual during the voluntary disclosure process until the agreement is finalized.

(5) The voluntary disclosure agreement is voidable by the department if the qualified entity, shareholder, partner, or individual:

(a) misrepresents material facts relevant to the agreement;

(b) fails to file returns or pay taxes and statutory interest for the lookback period within the time specified in the agreement;

(d) fails to continue to comply with Montana tax law.

History

Authorizing statute(s): 15-1-201, 15-30-2620 , 15-31-501, MCA
Implementing statute(s): 15-1-206, 15-30-2101 , 15-30-2602, 15-31-101, 15-31-111, MCA
History: NEW, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.311 Public Participation

(1) Public participation is encouraged and assisted to the fullest extent practicable. Participation must be consistent with other requirements of state law and the rights and requirements of personal privacy. The major objectives of such participation include:

(a) greater responsiveness of governmental actions to public concerns and priorities; and

(b) improved public understanding of official programs and actions.

(2) Prior to the adoption, amendment, or repeal of a rule or policy or the granting or denying of certain licenses, the department shall, where the decision is of significant public interest, give adequate notice and opportunity to participate in the decision-making process.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.312 Actions Considered to Be of Significant Public Interest

(1) The following will be considered action of significant public interest to require notice and opportunity for public participation in the decision-making process:

(a) the adoption, amendment, or repeal of any regulation, standard, or statement of general applicability that implements, interprets, or prescribes law or policy, or practice requirements of the department; or

(b) the granting or denying of a license for which a hearing is required under provisions of Montana law.

(2) In all other cases, whether or not the decision is one of significant public interest will be determined by the person within the department who is proposing the decision according to the following considerations:

(a) whether the decision regards a matter which is controversial;

(b) the number of persons who will be affected by the decision;

(d) the department has witnessed a high level of citizen interest.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.313 Notice and Means for Public Participation

(1) If it is determined that significant public interest is involved, one or more of the following steps, as applicable, shall be taken to assist public participation in the decision-making process:

(a) a proceeding or hearing is held in compliance with the provisions of Montana Administrative Procedure Act, Title 2, chapter 4, MCA;

(b) a public hearing, after appropriate notice is given, is held pursuant to any other provision of state law or a local ordinance or regulation;

(c) a news release, legal advertisement, or other method of publication will be given to news media within the area to be affected which shall include the name of a person within the department most familiar with the proposed action, that person's address, and a telephone number where interested persons may submit their data, views, or arguments, orally or in written form, concerning the proposed action.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.316 Alternative County Business Office Hours

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 2-16-117, 15-1-201, MCA
Implementing statute(s): 2-16-117, MCA
History: NEW, 2013 MAR p. 2168, Eff. 11/15/13; AMD, 2016 MAR p. 1863, Eff. 10/15/16; AMD and TRANS, from ARM 42.2.705, 2017 MAR p. 355, Eff. 3/25/17; REP, 2020 MAR p. 1648, Eff. 8/29/20.

Mont. Admin. R. 42.2.320 Integrated Revenue Information System (iris) Administrative Fee

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-141, MCA
Implementing statute(s): 15-1-141, 17-5-2001, MCA
History: NEW, 2003 MAR p. 1885, Eff. 8/29/03; REP, 2008 MAR p. 340, Eff. 2/15/08.

Mont. Admin. R. 42.2.321 Department Programs Related to Public Participation

(1) The department shall develop procedures that outline the elements stated in ARM 42.2.322 through 42.2.325. The exact mechanism and extent of activity may vary in relation to available resources, public response, and the nature of issues involved.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.322 Informational Materials

(1) To assist the public in participating in the department's decision-making process, the department shall provide continuing policy, program, and technical information at the earliest practicable times and at places easily accessible to interested or affected persons and organizations. News releases and other publications may be used for this purpose as well as informational discussions and meetings with interested citizens' groups. Special effort shall be made to summarize complex technical materials for public and media use.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.323 Public Assistance

(1) The department shall develop procedures for providing technical and informational assistance to concerned groups and individuals.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.324 Notification of Interested Persons

(1) The department shall maintain lists of interested persons and organizations who request information such as the information listed in ARM 42.2.322. This shall be in addition to the lists required by the Montana Administrative Procedure Act.

(2) Additionally, the department shall notify interested persons of public hearings or other decision-making proceedings prior to the decision-making and, wherever possible, shall supplement this notification with informal notice to all interested persons or groups having requested advance notice.

History

Authorizing statute(s): 2-4-201, 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 15-1-201, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.325 Access to Information

(1) The department files, other than those files required by law to be closed, are open to public inspection in accordance with established department policy. These files are located at various department offices in Montana. Copies of specific documents are available in accordance with department policy entitled, "Agency Documents - Access and Photocopying," 2.1.4, dated January 3, 2013.

(2) All requests for confidential tax returns or tax return information submitted by someone other than the taxpayer or an authorized agent of the taxpayer must be made to the department in writing directed to:

Department of Revenue

Director's Security Office

P.O. Box 7701

Helena, MT 59604-7701.

(3) A taxpayer may authorize a representative to obtain the taxpayer's confidential tax information by completing and submitting the department's Power of Attorney form, Form POA. The downloadable form is located on the department's web site at revenue.mt.gov. The department will also accept a fully executed Federal Form 2848, Power of Attorney and Declaration of Representative.

(4) Except as provided in (5), when the department receives a written request for confidential tax return information from someone who is not statutorily authorized to receive it, the department's Security Office will respond in writing denying the request.

(5) The department complies with the State Tax Appeals Board's order to provide relevant confidential realty transfer certificate information to requesting taxpayers who are appealing the department's valuation of their property for comparable sales that the department used in valuing the taxpayer's property.

(6) When the department is served with an administrative summons, judicial summons, or subpoena demanding confidential tax return information on behalf of someone who is not statutorily authorized to receive it, the department will oppose the request by filing a motion to quash with the judicial body that issued it or under whose authority it was issued, and will appeal any adverse ruling that implicates the department's view of proper tax administration. The department will obey an order to provide the information according to a final judicial order.

History

Authorizing statute(s): 2-4-201, 15-1-201, 15-7-306, 15-30-2620, 15-31-501, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): Montana Constitution, Art. II, sections 8, 9, and 10, 2-3-101, 2-3-102, 2-3-103, 2-3-104, 2-3-105, 2-3-111, 2-3-112, 2-3-113, 2-3-114, 2-4-201, 2-6-1003, 2-6-1006, 2-6-1009, 2-6-1017, 15-1-106, 15-7-308, 15-7-310, 15-30-2618, 15-31-511, 15-38-109, 15-68-815, MCA
History: NEW, Eff. 4/6/76; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2010 MAR p. 2744, Eff. 11/27/10; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 841, Eff. 5/7/16.

Mont. Admin. R. 42.2.326 Rulemaking

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): Title 2, chapter 3, part 1, MCA
History: NEW, Eff. 4/6/76; REP, 2006 MAR p. 85, Eff. 1/13/06.

Mont. Admin. R. 42.2.327 Other Measures

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 16-1-303, 16-10-104, 16-11-103, MCA
Implementing statute(s): Title 2, chapter 3, part 1, MCA
History: NEW, Eff. 4/6/76; REP, 2006 MAR p. 85, Eff. 1/13/06.

Mont. Admin. R. 42.2.328 Nondisclosure of Property Record Information

(1) Information obtained and records prepared in the course of property tax administration in Montana are available to the public, including the property owner's name. An individual who is at risk of physical harm or to their personal safety may have a reasonable expectation of privacy. A qualified property owner, as defined in (2), may request that the department not display the name of the owner on the department's web applications upon demonstrating that the right of the individual's privacy clearly exceeds the public's right to access property records.

(2) A "qualified property owner," for the purposes of this rule, means an individual who:

(a) owns real property that is displayed on the department's online web applications; and

(b) can demonstrate that their name, if published with the property record, will create a risk of physical harm or a threat to the safety of the individual.

(3) A qualified property owner must apply for nondisclosure of their name on the department's web applications using an application form provided by the department. In addition to the application, the applicant shall submit:

(a) a statement explaining the reason(s) for the nondisclosure request; and

(b) documentation supporting the reason(s) that the individual's name should be withheld.

(4) After receipt of the application, the nondisclosure request statement, and the supporting documentation demonstrating individual safety concerns, the department will weigh the asserted privacy interest against the public's right to know to determine if the information should remain public or be maintained as confidential. The department will advise the individual and the local department office of its determination, in writing, within 30 days of receipt of the completed application materials.

(5) If approved for nondisclosure status, the individual's name will not be displayed on the department's online web applications. However, property record data, including the property owner's name, may remain available on other state or county web applications or web sites or any other media outside the department's control.

(6) The department may not withhold from public scrutiny any more information than is required to protect an individual privacy interest.

(7) Qualified property owners who have been approved for nondisclosure status will be required to submit a renewal application with supporting documentation by May 31 of every odd-numbered calendar year thereafter, for consideration and approval by the department. Examples of when a qualified property owner needs to reapply to maintain nondisclosure status are:

(a) Example 1: applicant is approved for nondisclosure status on July 1, in an odd-numbered calendar year. The nondisclosure status is in effect until May 31 of the next odd-numbered calendar year, or 23 months.

(b) Example 2: applicant is approved for nondisclosure status on July 1, in an even-numbered calendar year. The nondisclosure status is in effect until May 31 of the following year, which is an odd-numbered calendar year, or 11 months.

(8) If the renewal application required in (7) is not timely received or is not approved by the department, the individual's name will appear on the department's online web applications by June 1.

(9) The property owner's name will always remain on the department's Computer Assisted Mass Appraisal (CAMA) property tax system, used for property tax administration purposes. The information in the CAMA property tax system will remain available to local county and city governments for tax administration purposes, and to contractors and vendors who have entered into agreements with the department to access the system.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 2-6-1003, MCA, Montana Constitution, Art. II, Sections 9 & 10
History: NEW, 2016 MAR p. 1971, Eff. 10/29/16.

Subchapter 42.2.4 Tax Certificates

Mont. Admin. R. 42.2.402 Tax Certificates – Requirements

(1) A tax certificate is a document a person or an entity can request from the department for the purpose of fulfilling the requirements of 15-31-524, 15-31-552, 16-4-401, 16-12-203, 35-6-201, 35-8-912, 35-8-1010, 35-14-1422, 35-14-1507, or 35-14-1509, MCA, or for the purpose of showing that the entity is in good standing with the department. A person or entity may request a tax certificate by filing an application on the department's online transaction portal, or by completing a paper form.

(2) In most situations, the department may issue a tax certificate only after a person or entity files all required tax returns and reports and pays all taxes, including interest and penalties that are owed, if any. If the tax certificate is intended to address a reinstatement from a dissolution under 35-8-209 or 35-14-1420, MCA, or the dissolution or withdrawal of a foreign entity, the department may issue a certificate only after the person or entity files all required tax returns and pays all taxes imposed under Title 15, MCA.

(3) The department may issue a tax certificate if, at the time of applying, the person or entity is enrolled in a payment plan or other agreement, such as a settlement agreement, with the department and they have not defaulted on that payment plan or other agreement.

(4) The department will not process a tax certificate request unless the application contains the person or entity's name, mailing address, and federal employer identification number (FEIN). If the entity is a single member LLC that has no employees and does not have an FEIN, the LLC shall use its owner's social security number (SSN). If the entity is a C corporation requesting a tax certificate under 15-31-552, 35-14-1507, or 35-14-1509, MCA, it must provide the additional documents and information described in ARM 42.23.313.

(5) For wage withholding purposes, a single member LLC that has not elected to be taxed as a corporation and its owner are considered to be the same employer. The department will not issue a tax certificate to the single member LLC unless all withholding taxes have been paid by the single member LLC and the owner.

(6) A tax certificate issued by the department expires six months from the date of its issuance.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-31-524, 15-31-552, 35-1-944, 35-1-1037, 35-6-201, 35-8-912, 35-8-1010, MCA
History: NEW, 2011 MAR p. 2543, Eff. 11/11/11; AMD, 2024 MAR p. 2325, Eff. 9/21/24.

Subchapter 42.2.5 Partial Payments, Penalties, Interest, and Collection

Mont. Admin. R. 42.2.501 Application of Partial Payments

(1) Partial payments that are received by the department for payment of a tax liability and a collection service fee, if any, must be applied proportionately between the tax liability and the collection service fee. Payment of the tax liability is applied in the order of tax, penalty, and then interest.

(2) Partial payments for a customer's tax liability shall be applied as directed by the customer as to account type, period, or order to apply.

(3) If customer direction is not provided, the payment will be applied in full to the oldest period first in the following order:

(a) first to tax (dollar for dollar until satisfied);

(b) then to penalty (if due); and

(4) Payments not directed by the customer will be applied pro rata among the accounts being collected by the department. For example, if 30 percent of the total debt is coal severance tax, 40 percent is withholding, and 30 percent is income tax, and a partial payment is received, application of the payment will be applied pro rata according to the schedule shown in (1) until all debt is satisfied.

History

Authorizing statute(s): 2-4-201, 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, MCA
Implementing statute(s): 2-4-201, 15-1-206, 15-1-216, 15-30-2619, 15-30-2641, 15-30-2642, 15-31-111, 15-31-502, 15-31-506, 15-31-510, 15-31-522, 15-31-543, 15-35-105, 15-35-121, 15-37-108, 15-38-107, 15-38-110, 15-53-145, 15-59-106, MCA
History: NEW, 1988 MAR p. 882, Eff. 5/13/88; AMD, 1988 MAR p. 2403, Eff. 11/11/88; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2002 MAR p. 1998, Eff. 7/26/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.503 Jeopardy Assessment and Emergency Execution

(1) If the department finds the assessment or collection of a deficiency will be jeopardized by delay and a deficiency notice has not been issued, the deficiency, penalty, and accrued interest become immediately due and payable on the date the department mails the taxpayer a written notice:

(a) of its finding that assessment or collection of the deficiency will be jeopardized by delay and its basis for making the finding;

(b) of the amount of deficiency, penalty, and accrued interest (the Notice of Assessment (NOA));

(d) that the department may immediately commence collection proceedings, including issuing a Warrant for Distraint;

(e) that if the taxpayer does not file a written objection to the amount of the NOA or a Request for Informal Review Form (APLS101F) with the department within 30 days of the date of the notice, the assessment becomes final and may not be appealed to the state tax appeal board; and

(f) that while filing the objection or request as provided in (1)(e) will not stop or delay collection proceedings, including issuing a Warrant for Distraint, if the taxpayer files the objection or request and it is subsequently determined in the department dispute resolution proceedings or on subsequent appeal that the amount of tax collected is in excess of the amount due, the amount of the overpayment will be credited against any income tax, penalty, or interest then due from the taxpayer and the balance of the excess refunded to the taxpayer as provided in 15-30-2609 and 15-31-531, MCA.

(2) If the department finds the collection of a deficiency, for which an NOA has been mailed, will be jeopardized by delay and the time for filing a written objection to the amount of the NOA or a Request for Informal Review form (APLS101F) with the department as provided in ARM 42.2.510 has not yet expired, the deficiency, penalty, and accrued interest become immediately due and payable on the date the department mails the taxpayer a written notice:

(a) of its finding that collection of the deficiency will be jeopardized by delay and its basis for making the finding;

(b) that immediate payment of the deficiency, penalty and interest is demanded;

(d) that if it is subsequently determined in the department dispute resolution proceedings or on subsequent appeal that the amount of tax collected is in excess of the amount due, the amount of the overpayment will be credited against any income tax, penalty, or interest then due from the taxpayer and the balance of the excess refunded to the taxpayer as provided in 15-30-2609 and 15-31-531, MCA.

(3) If the department finds the collection of a tax, including penalty and interest, will be jeopardized by delaying the issuance of a Warrant for Distraint until the notice provided in 15-1-702, MCA, has been given and 30 days have passed, the department will issue the Warrant for Distraint without giving the taxpayer prior notice. On the date a Warrant for Distraint is issued, the department will mail the taxpayer written notice that warrants have been issued.

(4) If the department has reason to believe that collection of the amount of any tax withheld is in jeopardy, the department will issue the Warrant for Distraint without giving the employer prior notice. On the date a Warrant for Distraint is issued, the department will mail the employer written notice that warrants have been issued.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-36-322, 15-39-114, MCA
Implementing statute(s): 15-30-2504, 15-30-2631, 15-31-522, 15-31-525, 15-31-531, 15-36-319, 15-37-107, 15-38-107, 15-38-108, 15-39-106, MCA
History: NEW, Eff. 12/31/72; AMD, 1982 MAR p. 14, Eff. 1/15/82; AMD and TRANS, from 42.16.103, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.504 Other Penalties - Late Pay, Failure to File, Fraudulent and Frivolous

(1) Applicable late pay penalties must be calculated as set forth in 15-1-216, MCA.

(2) The penalty for purposely failing to file a return or to pay the tax by the due date is set forth in 15-1-216, MCA.

(3) A taxpayer who files, renders, or signs a false or fraudulent return or statement, or who supplies the department with false or fraudulent information, is subject to the additional penalties described in 15-1-216, MCA.

(4) A person who files a frivolous return or report under Title 15, MCA, is subject to the additional penalties described in 15-1-216, MCA. Frivolous positions, as defined in 26 U.S.C. 6702, that may apply to provisions of Title 15, MCA, can be found on the department's web site at mtrevenue.gov/gov/government/frivolous-tax-positions .

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-216, 15-30-2642, MCA
History: Eff. 12/31/72; AMD, Eff. 7/5/75; NEW, Eff. 7/5/75; AMD, 1982 MAR p. 14, Eff. 1/15/82; AMD, 1984 MAR p. 2031, Eff. 12/28/84; AMD and TRANS, from 42.16.105, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.505 Interest on Unpaid Tax

(1) Unless otherwise provided by law, for all taxes, fees, and other assessments imposed under Titles 15 and 16, MCA, and administered by the department, interest attaches as outlined in 15-1-216, MCA.

(2) Exclusions to this rule are provided in 15-1-216, MCA.

(3) In the case where there is unpaid tax for a year that is reduced by the carryback of a subsequent year's net operating loss, interest on the unpaid tax accrues to the later of:

(a) the due date of the loss year return; or

(b) the date the loss year return is actually filed. This limited interest calculation applies only to the unpaid tax offset by the net operating loss carryback.

(4) Interest on all outstanding taxes shall accrue at the rate in effect, as provided in 15-1-216, MCA, during each calendar year, regardless of when the tax was originally due or when the tax was assessed. The rate does not affect any interest accrued prior to the current tax year.

(5) For purposes of determining interest on the underpayment of estimates provided in 15-30-2512, MCA, the rate in effect on the original due date of the tax return shall be used. For example, a return for the 2015 tax year is due April 15, 2016, so the rate that became effective January 1, 2016, shall be used to compute interest on the underpayment of estimates.

History

Authorizing statute(s): 15-1-201, 15-1-216, 15-30-2620, 15-31-501, 16-10-104, 16-11-103, MCA
Implementing statute(s): 15-1-206, 15-1-207, 15-1-216, 15-1-701, 15-1-708, 15-30-2512, 15-30-2602, 15-31-502, 15-31-503, 15-31-510, 16-1-409, 16-1-411, 16-11-143, MCA
History: NEW, Eff. 12/31/72; AMD, 1982 MAR p. 14, Eff. 1/15/82; AMD, 1992 MAR p. 2557, Eff. 11/26/92; AMD, 1994 MAR p. 2352, Eff. 8/12/94; AMD and TRANS, from 42.16.104, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.506 Late Filing Penalty

(1) Applicable late filing penalties are calculated at 5 percent of the net tax due for each month during which there is a failure to file the return or report. Late filing penalties shall:

(a) not exceed an amount up to 25 percent of the net tax due; and

(b) not be less than $50.

(2) Net tax due includes the amount of any credit against the tax that may be claimed on the return or report and any payments received by the due date of the return or report, including extensions.

(3) If the due date of the return or report is a date other than the last day of a calendar month, the late filing penalty is assessed each month or fraction thereof for which there is a failure to file a tax return or report. For example:

(a) A taxpayer files a tax return on June 20 that was due on April 15 of the same year. When filing the return, the taxpayer pays the tax due of $1,500. The late filing penalty assessed is $225 ($1,500 x 5 percent x 3 months).

(b) A taxpayer files a tax return on June 20 that was due on April 15 of the same year. When filing the return, the taxpayer pays the tax due of $300. The late filing penalty assessed is $50 because the calculated penalty does not exceed the $50 minimum ($300 x 5 percent x 3 months = $45).

(c) A taxpayer files a tax return due on June 20 that was due on April 15 of the same year. The taxpayer, however, paid the tax due of $1,500 on April 15. The late filing penalty assessed is the minimum $50.

(4) If the due date of the return or report, including extensions, is the last day of a calendar month, the late filing penalty is assessed each succeeding month or fraction thereof for which there is a failure to file a tax return or report. For example:

(a) A taxpayer files a tax return on April 10 that was due on March 31 of the same year. When filing the return, the taxpayer pays the tax due of $1,500. The late filing penalty assessed is $75 ($1,500 x 5 percent x 1 month).

(b) A taxpayer files a tax return on April 10 that was due on March 31 of the same year. The taxpayer, however, paid the tax due of $1,500 on March 31. The late filing penalty assessed is the minimum $50.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-1-216, MCA
History: NEW, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.507 Substantial Understatement Penalty

(1) A taxpayer who substantially understates tax due is subject to a substantial understatement of tax penalty in an amount equal to 20 percent of the understatement.

(2) For individuals, estates, and trusts, the penalty does not apply to understatements of tax that are less than or equal to $3,000. For understatements larger than $3,000, the penalty applies when the understatement exceeds the greater of:

(a) 10 percent of the tax the taxpayer is required to show on the return; or

(b) $3,000.

(3) Examples of how the substantial underpayment penalty is calculated for individual, estate, and trust taxpayers are as follows:

(a) A taxpayer reports $2,000 of tax on their original return; however, the taxpayer was required to report $6,000. The taxpayer understated their tax by $4,000. To determine whether the taxpayer's understatement was substantial, the understatement has to exceed the greater of $3,000, or 10 percent of the tax required to be paid. Because the understated amount of $4,000 exceeds both $3,000 and 10 percent of the required tax to be paid ($6,000 x 10 percent is $600) the substantial understatement penalty applies. The taxpayer would be assessed a penalty of $800 (20 percent of $4,000).

(b) A taxpayer reports $3,500 of tax on their original return, however, the taxpayer was required to report $6,000 of tax. The taxpayer understated their tax by $2,500. The understatement does not exceed $3,000. As a result, the taxpayer is not subject to the penalty.

(4) For taxpayers, other than individuals, estates, and trusts, the penalty does not apply to understatements that are less than or equal to $10,000. For understatements greater than $10,000, the penalty applies when the understatement of tax exceeds the lesser of:

(a) 10 percent of the tax required to be shown on the return; or

(b) $500,000.

(5) Examples of how the substantial underpayment penalty is calculated for taxpayers other than individuals are as follows:

(a) A corporate taxpayer reports $5,500,000 of tax on their original return; however, the taxpayer was required to report $6,250,000 of tax. The taxpayer understated its tax by $750,000. Because $500,000 is less than 10 percent of the tax required to be shown on the return ($625,000), $500,000 is used to determine whether the taxpayer substantially understated its tax. Here, the taxpayer substantially understated its tax ($750,000 is greater than $500,000) and is assessed a $150,000 penalty ($750,000 x 20 percent).

(b) A corporate taxpayer reports $750,000 of tax on their original return; however, the taxpayer was required to report $1,000,000 of tax. The taxpayer understated its tax by $250,000. Because $100,000 (10 percent of the tax required to be shown on the return) is less than $500,000, $100,000 is used to determine whether the taxpayer substantially understated its tax. Here, the taxpayer substantially understated its tax ($250,000 is greater than $100,000) and is assessed a $50,000 penalty ($250,000 x 20 percent).

(c) A corporate taxpayer reports $901,000 of tax on their original return; however, the taxpayer was required to report $1,000,000 of tax. The taxpayer understated its tax by $99,000. Because $100,000 (10 percent of the tax required to be shown on the return) is less than $500,000, $100,000 is used to determine whether the taxpayer substantially understated its tax. The taxpayer did not substantially understate its tax because its understatement is less than $100,000. The taxpayer is not subject to the penalty.

(d) A corporate taxpayer reports $991,000 of tax on their original return; however, the taxpayer was required to report $1,000,000 of tax. The taxpayer understated its tax by $9,000. Since the understatement does not exceed $10,000, the taxpayer is not subject to the penalty.

(6) The burden of proof is on the taxpayer to establish the existence of substantial authority or a reasonable basis for the tax treatment of an item taken on the return.

(7) For the purposes of determining a reduced penalty, the penalty is first calculated based on the understatement as a whole. Reductions are separately calculated by item and then subtracted from the penalty. For example:

Understatement subject to penalty | $ 11,000 Substantial understatement penalty before reduction | $ 2,200 Penalty reduction | $ (500) Total substantial understatement penalty | $ 1,700

(8) For the purposes of this rule, the following definitions apply:

(a) "Adequate disclosure" means a clear and comprehensive disclosure through statements, footnotes and/or supplemental schedules, which provides a comprehensive and clear description of the taxpayer's position.

(b) "Reasonable basis" means a well-reasoned construction of applicable statutory provisions and/or rules that provide substantial authority applied in good faith to support the taxpayer's position.

(c) "Substantial authority" means an objective standard that is more stringent than the reasonable basis standard, where the weight of the authorities' supporting treatment is substantial in relation to the weight of the authorities' supporting contrary treatment.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-1-216, MCA
History: NEW, 2016 MAR p. 2205, Eff. 11/11/16.

Mont. Admin. R. 42.2.508 Adjustments to Penalty and Interest

(1) Late pay penalties will be adjusted based on the corrected amount of tax due that results from an amended return, adjustment from an audit, or correction to the original return.

(2) The department will adjust interest based on the corrected amount of tax due that results from an amended return, adjustment from an audit, or correction to the original return, unless a decrease in tax due arises from a net operating loss or a tax credit.

(3) When there is a change to the tax liability that results from an amended return, adjustment from an audit, or correction to the original return, no change will be made to the underpayment interest penalty as calculated on the original return.

(4) The taxpayer may appeal a penalty assessment under the provisions of ARM 42.2.510 and ARM 42.2.613 through 42.2.621.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-1-216, 15-1-222, 15-30-2602, 15-30-2604, 15-30-2605, 15-31-502, 15-31-503, 15-31-510, MCA
History: NEW, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.510 Review of Notice of Assessment (noa)

(1) This rule applies to all department actions where a Notice of Assessment (NOA) or deficiency assessment, as those terms are defined in ARM 42.2.304, is issued. An NOA does not include centrally assessed appraisal reports and centrally assessed assessment notices which are covered by ARM 42.2.511.

(2) The department will provide notification by mailing the NOA to the taxpayer as prescribed in 15-1-211, MCA. Information provided on the NOA shall advise the taxpayer of the requirement to file a Request for Informal Review (Form APLS101F) or a written objection to the NOA with the department within 45 days from the date of the NOA; and that failure to file a written objection within the 45 days shall be deemed an admission that the debt stated in the NOA is due and owing.

(a) If the taxpayer agrees with the NOA, the matter is resolved upon compliance with, or acceptance of, the terms set forth in the NOA.

(b) If the taxpayer does not pay or respond to the NOA as required in (2), a letter will be sent to the taxpayer requesting payment within 45 days of the date of the letter or a Warrant for Distraint may be issued pursuant to 15-1-702, MCA.

(d) If payment is not received, the matter is forwarded to the department's Collections Bureau for handling.

(3) The taxpayer must submit to the department an objection to the NOA within 45 days of the date on the NOA. If the objection is sent by the U.S. Postal Service or by any other generally accepted delivery service, the objection must be postmarked within 45 days of the date of the NOA. If it is sent by e-mail, it must be sent within 45 days of the date of the NOA. Failure to respond within the 45 days shall be deemed an admission that the debt stated in the NOA is due and owing.

(a) Objections may be submitted using Form APLS101F or by a detailed letter stating the issues and amount of tax disputed.

(b) Electronic objections will be accepted. The e-mail address is provided in the appeal rights section of the NOA.

(4) An extension to deadlines in this rule may be granted if both parties agree.

(5) The department shall review the objection and determine whether the department agrees or disagrees with the taxpayer's objections. The department shall mail written notice to the taxpayer advising the taxpayer of the department's determination within 45 days after receipt of the objection.

(a) If the department concurs with the taxpayer, the matter is resolved by withdrawing or revising the NOA.

(b) If the department disagrees with the taxpayer, it shall explain the reasons for the disagreement in a Notice of Determination, notify the taxpayer of the dispute resolution procedures, and provide a copy of the Notice of Referral to the Office of Dispute Resolution (Form APLS102F). The department shall also notify the taxpayer that the taxpayer must submit Form APLS102F or any other written objection to the department within 45 days of the date on the Notice of Determination from the department, and that the taxpayer will forfeit the right to a hearing if the taxpayer fails to submit Form APLS102F or any other written objection within the 45-day period.

(c) If the department does not issue a Notice of Determination within the 45-day period provided in this rule, and an extension has not been previously agreed to between the parties, the taxpayer's appeal for the period identified in the NOA is deemed granted. An appeal that is deemed granted on this basis does not prohibit the department from making the same adjustment(s) identified in the underlying NOA in a different tax period.

(6) If the taxpayer disagrees with the department's determination, the taxpayer must submit Form APLS102F or any other written objection within 45 days of the date on the Notice of Determination to request a hearing before the Office of Dispute Resolution (ODR). Appeals should be mailed to the Department of Revenue, Office of Dispute Resolution, P.O. Box 5805, Helena, Montana 59604 or e-mailed to dordisputeresolution@mt.gov. If the objection is sent by the U.S. Postal Service or by any other generally accepted delivery service, the objection must be postmarked within 45 days of the date of the department's Notice of Determination. If it is sent by e-mail, it must be sent within 45 days of the date of the department's Notice of Determination.

(a) Failure by the taxpayer to file an appeal within 45 days of the date of the department's Notice of Determination shall be deemed an admission that the debt stated in the NOA is due and owing.

(b) If the taxpayer pays the bill, the matter is resolved.

(7) Once the matter is submitted to the ODR, ARM 42.2.613 through 42.2.621 apply. The department has 180 calendar days from the referral date to resolve the matter.

(8) The parties can agree to settle the dispute at any point during the process.

History

Authorizing statute(s): 15-1-201, 15-1-211, 15-1-701, 15-31-501, 15-35-122, 15-36-322, 15-39-114, MCA
Implementing statute(s): 15-1-211, 15-1-406, 15-8-601, 15-30-2602, 15-31-503, 15-35-112, 15-36-313, 15-36-314, 15-37-110, 15-37-114, 15-37-210, 15-38-110, 15-39-104, MCA
History: NEW, 2002 MAR p. 3048, Eff. 11/1/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2016 MAR p. 2073, Eff. 11/11/16; AMD, 2022 MAR p. 1764, Eff. 9/10/22.

Mont. Admin. R. 42.2.511 Review of Centrally Assessed Property Appraisals

(1) If a taxpayer is satisfied with the department's appraisal report, no further action is required. The department will notify the taxpayer that the appraisal is final by issuing an assessment notice on or before July 1 of the year of assessment.

(2) If a taxpayer is dissatisfied, or otherwise objects to the department's appraisal report, the taxpayer must submit a Request for Informal Review (Form CAB-8) or a written objection to the department within 20 days of the date of the appraisal report. The department's contact information will be provided in the appraisal report and in the Form CAB-8.

(a) The taxpayer's submission may be sent by U.S. mail or electronic mail but must be postmarked (for U.S. Mail) or received by the department (for electronic mail) within the 20-day period.

(b) The taxpayer may request one extension of up to ten days provided the department receives the request within the 20-day period.

(3) The department considers a taxpayer's failure to submit the Form CAB-8 or a detailed letter explaining the reasons for disputing the Notice of Determination within the time prescribed in (2) as the taxpayer's acceptance of the appraisal report as correct and final.

(4) Within 15 days after its receipt of the taxpayer's Form CAB-8 or a detailed letter explaining the reasons for disputing the Notice of Determination, the department will review the submission and determine whether it agrees or disagrees with the taxpayer. The department will notify the taxpayer, in writing, of the department's conclusions.

(a) If the department agrees with the taxpayer, the department will revise the appraisal report and issue a final assessment notice.

(b) If the department disagrees with the taxpayer, it will provide the taxpayer with the reasons for the disagreement and issue a Notice of Determination and revised appraisal report, if applicable, which will include a copy of the department's dispute resolution (i.e., appeal) procedures and Notice of Referral to the Office of Dispute Resolution for Centrally Assessed Companies (Form CAB-9).

(5) If a taxpayer appeals the department's Notice of Determination, the taxpayer shall:

(a) submit either a Form CAB-9 or a detailed letter explaining the reasons for disputing the Notice of Determination with the Office of Dispute Resolution (the ODR) within 15 days of the date on the Notice of Determination to request a hearing; or

(b) file an appeal with the Montana Tax Appeal Board.

(6) A taxpayer's Form CAB-9 or a detailed letter explaining the reasons for disputing the Notice of Determination may be sent to the ODR by U.S. mail or electronic mail and must be postmarked (for U.S. Mail) or received (for electronic mail) within 15 days of the date of the Notice of Determination. The ODR's contact information will be provided in the Form CAB-9.

(7) For appeals submitted to the ODR, the department's dispute resolution rules found in ARM 42.2.613 through 42.2.621 will apply. The department has 180 calendar days from the referral date to resolve the matter.

(8) The parties may settle the appeal at any point during the appeal process.

(9) If the department fails to comply with the deadlines in this rule, the taxpayer may immediately refer the matter to the ODR.

History

Authorizing statute(s): 15-1-201, 15-1-211, 15-23-108, MCA
Implementing statute(s): 15-1-211, 15-1-406, 15-7-102, 15-8-601, 15-23-102, 15-23-107, MCA
History: NEW, 2002 MAR p. 3048, Eff. 11/1/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2014 MAR p. 1527, Eff. 7/11/14; AMD, 2015 MAR p. 1509, Eff. 9/25/15; AMD, 2016 MAR p. 2073, Eff. 11/11/16; AMD, Notice No. 2025-5, Eff. 3/29/25.

Mont. Admin. R. 42.2.512 Reasonable Cause

(1) "Reasonable cause" for waiver of penalty and interest is construed in favor of the collection of the penalty and interest.

(2) The exercise of ordinary business care and prudence must be determined by the facts of each case. The existence of "reasonable cause" will be determined on a case-by-case basis at the discretion of the department.

(3) Examples of reasonable cause for failure by a taxpayer to file a tax return or report, pay a tax on the date required by statute, or reply to a deficiency notice from the department include, but are not limited to:

(a) where it can be substantiated that the return or reply was mailed (whether or not the envelope bore sufficient postage) or electronically filed in time to reach the department in the normal course of business, within the legal period (if the due date is a Saturday, Sunday, or holiday, the following business day is within the legal period);

(b) where it can be substantiated that the delay or failure was due to erroneous information given the taxpayer by an employee of the department according to the provisions provided in the taxpayer bill of rights found in 15-1-222, MCA;

(d) where the delinquency or delay was due to destruction by fire or other casualty of the taxpayer's place of business or business records; or

(e) where a taxpayer is unable, for reasons beyond the taxpayer's control, to obtain the records necessary to determine the amount of tax due.

(4) The examples stated in (3) are illustrations only. Other reasonable causes may exist for failure to properly and timely file the tax statement or return, pay the tax, or reply to a deficiency notice. Each request for waiver will be considered on a case-by-case basis using the following criteria:

(a) the taxpayer's reasons address the penalty and interest that was assessed or the date a reply was due;

(b) the length of time between the event cited as a reason and the filing, payment, or reply date negate the event's effect;

(d) the taxpayer has provided sufficient detail (dates, relationships) to determine ordinary business care and prudence was exercised;

(e) the taxpayer documented all pertinent facts; and

(f) the taxpayer could have requested an extension or filed an amended return.

(5) The following are examples which do not constitute reasonable cause and do demonstrate neglect:

(a) forgetfulness or inadvertence on the part of a taxpayer, a taxpayer's employee, a taxpayer's agent, or the taxpayer's professional tax preparer;

(b) failure to file or reply because of advice by a professional tax preparer, attorney, or accountant;

(d) the advent of new tax laws, regulations, or administrative requirements that create complex problems and significantly delay the taxpayer in preparing returns;

(e) inability of a professional tax preparer to secure competent help in sufficient time to cope with the workload;

(f) a failure to secure the proper forms; or

(g) the taxpayer started to prepare the return or reply in sufficient time, but found that because of complicated issues the taxpayer was unable to finish the return or reply.

(6) The examples stated in (5) are for illustrations only. Other circumstances may exist which do not constitute reasonable cause.

(7) Ignorance of the law does not constitute "reasonable cause."

(8) Inability to pay a tax does not constitute reasonable cause for failure to file a tax return or statement on time.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15; AMD and TRANS, from ARM 42.3.105, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.513 Proof of Reasonable Cause or Lack of Neglect

(1) The taxpayer who requests waiver of penalty and interest on a tax, or submits an untimely reply to a deficiency notice, has the burden of proving to the department that reasonable cause exists for the failure to timely file the tax statement and report, timely pay the tax, or timely submit a reply to a deficiency notice. The taxpayer also must prove the taxpayer was not guilty of neglect when the taxpayer failed to timely file the tax statement and report, timely pay the tax, or timely submit a reply to a deficiency notice.

(2) Unless reasonable cause is apparent in the department's file or is public knowledge, all requests for waiver of penalty and interest must be in writing.

(3) The simple statement that "reasonable cause" existed for the failure to timely file the tax statement or return, to timely pay the tax, or timely submit a reply to a deficiency notice, is never sufficient to receive a waiver or other consideration. All requests for waiver of penalty and interest or untimely replies to a deficiency notice must include the facts the taxpayer believes demonstrate reasonable cause and lack of neglect.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15; AMD and TRANS, from ARM 42.3.107, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.2.520 Collection of Delinquent Taxes or Other Funds Through Offset Procedures

(1) In order to collect delinquent taxes after the time for appeal has expired, the department may direct the offset of tax refunds or other funds due the taxpayer from the state except wages subject to the provisions of 25-13-614, MCA, and retirement benefits that are exempt from execution.

(2) Contract proceeds subject to offset may include wages due the taxpayer. Taxpayers may exclude wages from offset on contract proceeds by submitting a claim to the department within 30 days of notification of the offset. The claim must set forth the amount of wages and include documentation to support the claimed wage exclusion. Should the department dispute the claim, the claim and documentation shall be considered a request for hearing.

(3) Upon determination by the department of a tax refund or other funds owed by the state to a delinquent taxpayer, the department may direct the offset of such funds by serving notification of the offset to the taxpayer.

(a) The department shall provide notice of the right to request a hearing pursuant to the Montana Administrative Procedure Act on the matter of the offset action or the department's intent to file a claim on behalf of a taxpayer.

(b) All tax refunds or other funds subject to offset by the department shall be held pending either the expiration of the 30-day notification period, or the resolution of the taxpayer's hearing, if requested.

(c) The provisions of (3) and (3)(a) also apply to claims for tax refunds submitted on behalf of delinquent taxpayers by the department.

(4) The department may file a claim for state funds on behalf of the delinquent taxpayer if a claim is required before the funds are available for offset.

(5) Claims for tax refunds or other funds which are submitted by the department are based upon a subsequent intent to offset on those funds. Should a hearing be requested by the taxpayer, the issues of such hearing shall be based upon both the claim submitted by the department and the intended offset.

(6) The department may internally issue such offsets or claims upon tax refunds or other funds administered by the department in accordance with the above provisions.

(7) Tax refunds and other funds seized by levy based upon a filed Warrant for Distraint are not subject to the above provisions.

History

Authorizing statute(s): 15-1-201, 15-1-217, 15-30-2620, 17-4-110 MCA
Implementing statute(s): 15-1-211, 15-1-216, 15-30-2629, 17-4-103, 17-4-105, 17-4-106, 17-4-111, MCA
History: NEW, 1985 MAR p. 2016, Eff. 12/27/85; AMD and TRANS, from 42.16.106, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Subchapter 42.2.6 Dispute Resolution

Mont. Admin. R. 42.2.601 Uniform Tax Review Procedure - Definitions - Applicability Date

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; AMD, 1997 MAR p. 2199, Eff. 12/2/97; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.602 Notice to Taxpayer

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; AMD, 1993 MAR p. 570, Eff. 4/16/93; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.603 Taxpayer Objections to Auditor's Assessment or Refund Denial, or Denial or Waiver of Penalty and Interest

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; AMD, 1993 MAR p. 570, Eff. 4/16/93; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.604 Consequences of Failure to Object to an Assessment in a Timely Manner

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.605 Division Administrator's Decision

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; AMD, 1993 MAR p. 570, Eff. 4/16/93; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.606 Taxpayer Objection to Decision of the Division Administrator

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.607 Alternative Procedures

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.608 Director of the Department of Revenue's Decision

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.609 Taxpayer Appeals to the State Tax Appeal Board

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.610 Director Initiated Review

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.611 Settlement of Tax Disputes

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.612 Departmental Procedures

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1991 MAR p. 2495, Eff. 12/13/91; REP, 1999 MAR p. 2900, Eff. 12/17/99.

Mont. Admin. R. 42.2.613 Definitions

The following definitions apply to rules found in this subchapter.

(1) "Administrative Law Judge (ALJ)" means the individual who:

(a) adjudicates or mediates a dispute between a person or other entity and the department after the dispute has been proceeded beyond informal review; and

(b) has general authority to regulate the course of appeals.

(2) "Alcohol license protests" means challenges to the issuance or transfer of ownership or location of the alcoholic beverages licenses listed in, and according to the protest criteria and process provided in 16-4-207, MCA.

(3) "Alcohol matters" means disputes arising from the department's administration of the Montana Alcoholic Beverage Code (Title 16, chapters 1 through 4, and 6, MCA), other than alcohol license protests. Alcohol matters are contested cases conducted pursuant to the Montana Administrative Procedure Act set out in Title 2, chapter 4, part 6, MCA.

(4) “Artificial intelligence (AI),” for purposes of these rules, has the same general meaning used by the American Bar Association (ABA) and includes, but is not limited to, the use of computer technology, software, and systems to perform tasks that historically required human intelligence. The term is frequently applied to the replication of intellectual processes characteristic of humans, such as reasoning, generalizing, and relying on past experience.

(5) "Bad debt matters" means disputes arising from a debt owed to an agency, other than the Department of Public Health and Human Services, that have been transferred to the department for collections pursuant to 17-4-104, MCA.

(6) "Collection matters" means disputes arising from the department's collection of outstanding state taxes and any associated penalties and interest.

(7) "Evidence" means the same as the term defined in 26-1-101, MCA.

(8) "Form APLS101F" means the Request for Informal Review that is available at revenue.mt.gov for use by a person or other entity to file a written objection with the department for issues concerning the first notice of a tax adjustment.

(9) "Form APLS102F" means the Notice of Referral to the Office of Dispute Resolution that is available at revenue.mt.gov for use by a person or other entity to appeal an informal review determination to the ODR.

(10) "Form CAB-8" means the Request for Informal Review for Centrally Assessed Companies that is available at revenue.mt.gov for use by a centrally assessed company to appeal a first notice of tax assessment or classification.

(11) "Form CAB-9" means the Notice of Referral to the Office of Dispute Resolution for Centrally Assessed Companies that is available at revenue.mt.gov for use by a centrally assessed company to appeal an informal review determination to the ODR.

(12) "Hearing" means a recorded, contested proceeding before an ALJ, acting as a finder of fact, during which the parties may offer testimony under oath with an opportunity to question the witnesses, offer exhibits, make arguments, and provide evidence.

(13) "Initial conference" means a conference conducted by the ODR with the parties involved to consider the issues in dispute and determine:

(a) whether the proceedings will be informal or formal;

(b) the necessity for discovery; and

(d) whether the taxpayer will elect to bypass the ODR.

(14) "Marijuana matters" means disputes arising from the department's administration of the Montana Marijuana Regulation and Taxation Act (Title 16, chapter 12, MCA, and ARM Title 42, chapter 39). Marijuana matters are contested cases conducted pursuant to the Montana Administrative Procedure Act, Title 2, chapter 4, part 6, MCA.

(15) "Mediation," for purposes of these rules, means the alternative dispute resolution process authorized under 15-1-211, MCA, where a mediator facilitates discussion between the parties to encourage informal resolution.

(16) "Notice of referral to the ODR" means to file an appeal from an informal review determination with the ODR, by submitting:

(a) a completed Form APLS102F; or

(b) any other written objection.

(17) "ODR" means the department's Office of Dispute Resolution as established by 15-1-211, MCA.

(18) "Party" means either a person or other entity or the department.

(19) "Request for informal review" means a request by a person or other entity for review of a tax assessment, adjustment, or other department determination, by submitting:

(a) a completed Form APLS101F;

(b) a completed Form CAB-8; or

(20) "Settlement" means a mutually agreed upon resolution of the disputed issues, the terms of which are executed in writing and binding upon the parties.

(21) "Tax matters" means disputes arising from the department's administration of state taxes.

History

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA
Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2000 MAR p. 3557, Eff. 12/22/00; AMD, 2002 MAR p. 3048, Eff. 11/1/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2018 MAR p. 652, Eff. 3/31/18; AMD, 2018 MAR p. 1171, Eff. 6/23/18; AMD, 2021 MAR p. 1147, Eff. 9/11/21; AMD, 2022 MAR p. 1712, Eff. 8/27/22; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.614 Purpose

(1) Section 15-1-211, MCA, requires a uniform dispute review procedure and the establishment of a dispute resolution office within the department.

(2) A primary objective of the dispute resolution procedure is to make resolving a dispute with the department as accessible as possible to parties appearing before the department.

(3) The department's dispute review procedure applies to all matters administered by the department except those exempted by 15-1-211, MCA, or other applicable law.

(4) Section 69-8-414, MCA, requires the department to issue a final agency decision for uniform systems benefits matters within 60 days from the date the matter is submitted to ODR, rather than the 180 days provided in 15-1-211, MCA.

History

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA
Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, 69-8-414, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2002 MAR p. 3048, Eff. 11/1/02; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2018 MAR p. 652, Eff. 3/31/18; AMD, 2022 MAR p. 1712, Eff. 8/27/22; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.615 Referrals to the Odr

(1) Notice of referral to the ODR shall be submitted in writing and shall indicate the issues in dispute.

(2) Except for alcohol matters and marijuana matters, a person or other entity who has filed an appeal with the ODR may, within 30 days of filing the appeal, elect to bypass review by that office and file an appeal with the state tax appeal board. If the person or other entity elects to bypass review by the ODR, the determination originally issued by the division will be deemed the final department decision.

(3) The ODR shall notify the appropriate division within the department that a referral has been received.

History

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA
Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2018 MAR p. 652, Eff. 3/31/18; AMD, 2022 MAR p. 1712, Eff. 8/27/22; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.616 Formality of Procedures

(1) The ODR hears appeals from self-represented parties and parties represented by authorized representatives with the intent to accommodate all disputes in a manner most appropriate for each situation.

(2) An ALJ may utilize the Montana Administrative Procedure Act, Montana Rules of Civil Procedure, Montana Uniform District Court Rules, and Montana Rules of Evidence, as necessary, to clarify fair procedures, expedite determinations, and assist in the adjudication of rights, duties, or privileges of parties.

(3) When conducting discovery, the parties are requested to obtain discovery through informal means or communication. If reasonable informal discovery efforts are unsuccessful, then formal discovery procedures may be used.

(4) A party may make formal filings at any stage in the appeal process.

(5) A party at a hearing shall have the right to introduce evidence. The evidence may be oral or written, real or demonstrative, direct or circumstantial. A party must disclose to the ODR if they introduce evidence or make any formal filing created using AI.

(6) A party may be represented by legal counsel at any stage of adjudication. Legal counsel must enter a notice of appearance with the ODR to represent a person or other entity before an ALJ.

(7) Failure to obtain legal representation may not be cited as grounds for complaint at a later stage in the adjudicative process or for relief on appeal from an adverse decision.

(8) If a person or other entity chooses to be represented by someone other than legal counsel at the hearing or adjudication stage, the person or other entity must first submit a signed power of attorney form to the ODR authorizing the representative to act on the party's behalf.

(9) If a party is represented by legal counsel or another representative, all documents and information pertaining to the dispute will be directed to the representative. The information may be transmitted by e-mail, the state of Montana File Transfer Service, or other electronic means, provided such transmission meets confidentiality requirements. Otherwise, documents will be mailed to the representative's address as shown in the original filing.

History

Authorizing statute(s): 15-1-201, 15-1-211, 16-12-112, MCA
Implementing statute(s): 15-1-211, 16-12-109, 16-12-112, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2018 MAR p. 652, Eff. 3/31/18; AMD, 2022 MAR p. 1712, Eff. 8/27/22; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.617 Initial Conferences

(1) Following the ODR's receipt of a notice of referral to the ODR, an initial conference will be scheduled as soon as possible.

(2) Parties may participate at the initial conference either on their own behalf or through representatives, employees, or agents as long as a requisite notice of appearance has been entered by an attorney or a power of attorney form designating representation has been submitted by the party of record.

(3) Written notice of the initial conference shall be given at least 10 days prior to the date of the initial conference unless the parties waive notice. The initial conference may be conducted by telephone or video conference, or in person at the discretion of the ALJ.

(4) At the initial conference, the ALJ will discuss the options for proceeding on appeal before the ODR which may include:

(a) scheduling a hearing;

(b) setting a briefing schedule;

(d) bypassing the ODR review under a 15-1-211(2)(c), MCA, election; and/or

(e) staying the appeal to afford the parties an opportunity to resolve the dispute informally.

(5) Once a hearing or a mediation has been scheduled, the ALJ will coordinate with the parties to schedule other deadlines as needed, such as:

(a) discovery and exhibit exchanges;

(b) motion deadlines; and

(6) A party may request a continuance of a scheduled matter. The party seeking the continuance shall indicate whether the request is opposed. If the request for continuance is opposed, the requesting party shall provide the basis for the request.

(7) Specific facts and substantive matters discussed during the initial conference are considered confidential. Procedural matters discussed are not considered confidential. Any matters raised do not constitute admissions against interest of any party participating in the conference.

(8) The ALJ assigned to the matter shall preside over any hearing and issue the written determination adjudicating the matter.

(9) Nothing in this rule may be construed as limiting a party's right to a hearing.

History

Authorizing statute(s): 15-1-201, 15-1-211, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2018 MAR p. 652, Eff. 3/31/18; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.618 Mediation Procedures

(1) The resolution of any matter in connection with a dispute may be pursued through mediation with the agreement of all parties.

(2) Mediation may be requested and scheduled at the initial conference or at any time during the proceeding at the agreement of both parties.

(3) The mediator may either be an ALJ from the ODR or a mediator from outside the department and shall be selected with the consent of both parties.

(4) If an outside mediator is selected, the cost of the mediator shall be paid by the party requesting the outside mediator, unless the parties have agreed to some other cost-sharing provision.

(5) The mediator does not have authority to enter any decision on the merits of the issues in dispute or to impose a settlement upon the parties. The parties control the identification of the issues submitted and the type of resolution to be agreed upon.

(6) At the mediation, each party shall have the appropriate representative or access to the appropriate representative who has full settlement authority.

(7) Mediation sessions are confidential settlement negotiations. All written and oral communications, negotiations, and statements made in the course of the mediation are made without compromising any party's legal position, are not discoverable, and shall be inadmissible for any purpose at any legal proceeding.

(8) If mediation resolves the dispute, the mediator shall prepare a mediation report memorializing that the parties have resolved the matter. If mediation does not resolve the dispute, the mediator shall prepare a mediation report and include any stipulations identifying the issues resolved and any issues that remain in dispute. The parties may continue on appeal and request a hearing on the outstanding issues in dispute.

(9) If the parties have resolved the dispute through mediation, the parties shall execute a legally binding settlement agreement outside the purview of the ODR. Written agreements signed by all parties are not confidential and may be admissible as evidence, as set forth in 26-1-813, MCA.

History

Authorizing statute(s): 15-1-201, 15-1-211, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.619 Hearing Procedures

(1) Except as provided in this rule, hearings may be conducted by telephone or video conference. A party may request an in-person hearing to be conducted in Helena, Montana. Upon a showing of compelling circumstances, an ALJ may order a hearing to be conducted at a location elsewhere in Montana.

(2) The location for hearings pertaining to alcohol matters is determined according to ARM 42.11.305 and 42.12.108.

(3) Notice of the time and place for a hearing shall be given to the parties or their representatives not less than 14 days prior to the hearing.

(4) A party may request a continuance of a scheduled matter. The party seeking the continuance shall indicate whether the request is opposed. If the request for continuance is opposed, the requesting party shall provide the basis for the request.

(5) Hearings shall be conducted at all times with regard for the confidentiality requirements imposed by law.

(6) Testimony at hearings shall be given under oath.

History

Authorizing statute(s): 15-1-201, 15-1-211, MCA
Implementing statute(s): 15-1-211, 15-30-2618, 15-31-511, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2002 MAR p. 3048, Eff. 11/1/02; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.620 Information Offered in Hearings (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-1-211, MCA
Implementing statute(s): 15-1-211, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2016 MAR p. 1072, Eff. 6/18/16; REP, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Mont. Admin. R. 42.2.621 Final Agency Decision and Appeal

(1) The director retains the authority to issue a final agency decision (FAD) on all matters except those identified in (2).

(2) The director delegates to the ODR the authority to issue a FAD on alcohol licensing protests, marijuana matters, bad debt matters, tax matters, and collection matters. The delegation to issue a FAD applies only to matters referred to the ODR.

(3) A FAD on alcohol matters, marijuana matters, alcohol licensing protests, and bad debt matters may be appealed to the district court by filing a petition for judicial review within 30 days after service of the FAD.

(4) A FAD on a tax matter or collection matter may be appealed to the Montana Tax Appeal Board as provided in 15-2-302, MCA, by filing an appeal within 30 days following receipt of the FAD.

(5) If no decision is rendered by the end of the 180-day period specified in 15-1-211, MCA, the department shall notify the parties that they are entitled to carry their appeal forward by filing a complaint with the appropriate reviewing authority in (3) or (4) within 30 days after service of the notice. The parties may waive the 180-day period, in writing.

History

Authorizing statute(s): 15-1-201, 15-1-211, 15-1-217, 16-1-303, 50-46-344, MCA
Implementing statute(s): 2-4-621, 2-4-623, 2-4-631, 2-15-112, 2-15-1302, 15-1-211, 15-2-302, 16-4-411, 50-46-344, MCA
History: NEW, 1999 MAR p. 2900, Eff. 12/17/99; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2007 MAR p. 477, Eff. 4/13/07; AMD, 2016 MAR p. 1072, Eff. 6/18/16; AMD, 2018 MAR p. 1171, Eff. 6/23/18; AMD, 2021 MAR p. 1147, Eff. 9/11/21; AMD, 2026 MAR, Notice No. 2026-169, Eff. 9/26/26.

Subchapter 42.2.7 Public Access

Mont. Admin. R. 42.2.701 Public Access to Taxpayer Information

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): Montana Constitution, Art. II, sec. 8, 9, & 10
History: Attorney General Opinions 38-59, 39-17; 2-4-501, 2-4-623, 2-6-109, 15-7-308, 15-30-303, 15-31-507, 15-35-205, 15-38-109, 15-50-205, 15-50-206, 15-50-207, 16-3-211, 16-3-404, 16-11-120, 16-11-122, MCA; NEW, 1993 MAR p. 2811, Eff. 11/25/93; REP, 2000 MAR p. 3557, Eff. 12/22/00.

Subchapter 42.2.8 Ethics Rules

Mont. Admin. R. 42.2.801 Statement of Intent

(1) These rules provide guidance to Department of Revenue employees concerning the ethical standards they are expected to meet or exceed. The rules also inform the public concerning ethics expected of department employees.

(2) In Wadsworth v. DOR , the Montana Supreme Court held that the department's policy prohibiting appraisal employees from also working as private appraisers or as real estate salesman was unconstitutional. The key to the decision was that the department could not show actual conflicts, only potential conflicts. In addition, the court held that such policies should be adopted as administrative rules. In light of this decision and the fact that employees need to have some guidance concerning ethical issues, these rules are adopted.

(3) The guiding principle behind these rules is that the department trusts its employees to respect their public office and act in an ethical manner. These rules provide guidance and examples to assist employees in recognizing potential conflicts of interest and ethical issues.

(4) The corollary principle is that employees must take responsibility for their conduct. An employee who betrays the state's trust will be disciplined, including the possibility of termination of employment.

(5) The key to compliance with ethical requirements is recognition of an ethical issue and complete, full and timely disclosure of possible problems. The purpose of requiring disclosure is to ensure that no harm comes to the employee, the state of Montana, the department or the public from a conflict of interest, appearance of a conflict of interest, or other ethical issue. Disclosure is necessary so steps can be taken by the employee and the department to prevent harm. Disclosure is also required by the Montana Code of Ethics, 2-2-131 , MCA. Preventing harm is, by its nature, something that can occur only if disclosure of conflicts of interest are made in a timely manner.

(6) The courts in Montana and other jurisdictions have stated that employees owe a duty to their employer in return for employment. This includes the duty to perform their responsibilities diligently and faithfully. It also includes the duty to be loyal to their employer as appropriate and within the bounds of the law and ethical standards. Although this duty is incapable of specific definition, these rules attempt to inform employees of what is expected concerning their responsibility to be loyal to the state of Montana.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): 2-2-101, 2-2-104, 2-15-112, 15-1-201, 15-1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Mont. Admin. R. 42.2.802 Definitions - Ethics of Department of Revenue Employees

Unless the context clearly indicates otherwise, the following terms shall have the following meanings:

(1) "Code of ethics" means any accepted professional standards of conduct, requirements or prohibitions applicable to state public employees that the Montana legislature has adopted. The code of ethics is currently codified in Title 2, chapter 2, MCA as well as other sections of law including 16-1-304 , MCA.

(2) "Conflict of interest" means any situation where an employee's private pecuniary or political interests as defined in (8) below conflict with the interests of the department.

(3) "Disclosure" means written documentation by an employee to the employee's supervisor or the ethics review panel and the secretary of state ( 2-2-131 , MCA) of any matters in which the employee knows or should reasonably know is a conflict of interest, will give the impression of a conflict of interest, or presents any other ethical issue. A written disclosure includes electronic mail as well as hard copy.

(4) "Employee" means all entities and individuals in the employ of or under contract to the department of revenue. The term specifically includes contractors, full-time and part-time employees and appointees.

(5) "Ethical issue" means a set of facts that raise or may reasonably raise questions about whether a violation of these rules or the code of ethics will occur.

(6) "Ethical misconduct" includes but is not limited to:

(a) failure to disclose a conflict of interest, appearance of conflict of interest or other ethical issue as required by these rules or the code of ethics;

(b) violation of these rules or the code of ethics; and

(c) violation of a professional code of ethics or conduct or similar provision by an employee engaged in the profession subject to the code or similar provision.

(7) "Ethics review panel" as used in these rules refers to the panel described in ARM 42.2.806 of these rules.

(8) "Political interests" as used in these rules mean those interests that go beyond the employee's private political beliefs. Private political beliefs are not of concern to the department. As used here, the term is restricted to those situations where an employee is publicly advocating a political position as part of an organized effort. This might include being an officer or other leader of a political or public interest organization which is advocating a particular political viewpoint when such public advocacy creates a conflict of interest or will give the impression of a conflict of interest or other ethical issue.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): 2-2-101, 2-2-104, 2-15-112, 15-1-201, 15-1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Mont. Admin. R. 42.2.803 Required Employee Conduct

(1) Employees shall be familiar with these rules and the code of ethics adopted by the Montana legislature in order to enable them to recognize a conflict of interest, appearance of conflict of interest or other ethical issue and make full, complete and timely disclosure.

(2) Employees shall disclose any personal conflicts of interest, appearance of a personal conflict of interest or personal ethical issue as soon as it becomes known to them or should have become known to them.

(3) Employees shall seek to avoid employment outside of the department that creates an actual conflict of interest with their work for the department.

(4) Employees shall comply with all statutory provisions that the department administers including but not limited to filing requirements and payment of taxes.

(5) Employees shall conduct themselves with the highest sense of integrity and loyalty so as to serve the public interest, honor the public trust and demonstrate their commitment to professionalism.

(6) Pursuant to 16-1-304 , MCA, employees involved in any way in administering any of the state liquor laws for the department shall not directly or indirectly become involved in any business which sells alcoholic beverages. The prohibited involvement is interpreted broadly to include direct or indirect ownership, employment, or agency relationships of all types.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): 2-2-101, 2-2-104, 2-2-121, 2-15-112, 15-1-201, 15-1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Mont. Admin. R. 42.2.804 Examples of Situations Where Disclosure of an Ethical Issue Is Required

(1) The following are examples of situations where the employee is required to make full, complete and timely disclosure:

(a) A tax auditor employed by the department prepares federal and state income tax returns for a private client on his own time. The private client is later identified as an income tax audit candidate, and it is possible the auditor could be assigned to conduct the audit. As soon as the auditor becomes aware of these facts he must disclose the potential conflict of interest created by his involvement with the private client's taxes so that the department can take steps to avoid a conflict of interest (such as by assigning an auditor without the conflict) .

(b) The department hires an attorney whose sister is an attorney and partner in a local law firm. The attorney's sister brings an action on behalf of a client against the department. The department employee must disclose the ethical issue as soon as it is known so that a different attorney can be assigned to work on the case. Disclosure of the potential conflict as soon as the attorney is hired would be preferable but the disclosure needs to occur in time to prevent a clear conflict of interest.

(c) A department employee responsible for audits of oil companies owns stock in an oil company. The employee must disclose her ownership interest in the oil company. If the interest is small and the outcome of an audit will have little or no direct impact on the employee, the department may determine that no actual conflict of interest exists. However, disclosure is still required in order to allow the employee and the department to prevent a conflict of interest or appearance of conflict of interest from occurring.

(d) An employee is a real property appraiser for property tax purposes. The appraiser also has a private fee appraisal service. He conducts a private fee appraisal for a certain property owner. If the appraiser may be assigned to appraise the property owner's property as part of his duties with the department, the appraiser must disclose the ethical issue. The employee and the department must take steps to insure that the appraiser does not do both appraisals on the same property. Disclosure is also required if the employee is in a position of reviewing a department appraisal of the property. Disclosure may also be required if the employee has any other business relationship with a particular property, such as a sale by an employee who is a real estate agent.

(e) A department employee performs computer programming and analysis on her own time for a private corporation. If the employee is aware that the corporation is actively seeking a significant contract to provide consulting services to the state or is providing services to the state, the employee must disclose this outside employment. The outside employment may create a conflict of interest or appearance of conflict of interest. Upon disclosure the department and employee can determine whether a conflict or appearance of conflict exists and what steps can be taken to cure any potential problems.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): Sec. 2-2-101, 2-2-104, 2-2-121, 2-15-112, 15-1-20, 15-1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Mont. Admin. R. 42.2.805 Best Interests of the State of Montana

(1) In consideration of their employment, employees have a duty to perform diligently and faithfully. This includes the requirement to be faithful to the employer's objectives and goals. An employee is expected to act in the best interests of the state of Montana as shaped and determined by the leaders of the department. This duty clearly does not include any acts that would violate the laws, rules or clear public policies of the state. It does include refraining from any acts that will be contrary or counter productive to the legitimate policies of the department leadership. This responsibility to act in the best interests of the state may become an ethical issue. Employees with questions concerning the applicability of this rule should disclose these issues to their supervisor or the ethics review panel.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): 2-2-101, 2-2-104, 2-2-121, 2-15-112, 15-1-201, 15-1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Mont. Admin. R. 42.2.806 Review of Ethical Issues and Department Action After Disclosure

(1) The department director shall appoint a panel to review ethical issues. The panel shall meet regularly and review requests from employees for advice concerning ethical issues, and disclosures. The panel shall provide advice and guidance to employees concerning ethical issues, the need to disclose issues to the secretary of state and the department, actions which may be taken to avoid conflicts of interest and any other ethical problems or concerns. The panel shall include both managers and nonmanagers.

(2) The department shall provide training regarding these rules, the code of ethics and the requirements for compliance. In addition, the department shall make information available to assist employees in complying with these rules.

(3) Upon disclosure of an ethical issue by an employee, the department shall take such action as appropriate to prevent an actual conflict of interest or ethical misconduct.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): 2-2-101, 2-2-104, 2-2-121, 2-2-131, 2-2-136, 2-15-112, 15-1-201, 15-1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Mont. Admin. R. 42.2.807 Consequences for Failure to Comply with Ethical Standards

(1) An employee who breaks faith with the trust given them by the public, the state and the department by violating these rules or the code of ethics shall be subject to appropriate disciplinary action. The disciplinary action may include, but is not limited to, written warning, suspension without pay, demotion or immediate termination of employment depending on the severity of the violation. In the case of a contractor, the disciplinary action may include immediate termination of the contract and other action as allowed by law and the terms of the contract.

History

Authorizing statute(s): 2-15-112, 15-1-201, MCA
Implementing statute(s): 2-2-101, 2-2-104, 2-2-121, 2-2-201, 2-15-112, 15 1 201, 15 1-202, MCA
History: NEW, 1999 MAR p. 2576, Eff. 11/5/99.

Subchapter 42.2.9 School Districts Waiver to Taxes

Mont. Admin. R. 42.2.901 Definitions

The following definitions apply to rules found in this subchapter.

(1) "All protested taxes" means all taxes in all funds, under protest, for the given tax year a school district is electing to waive protested taxes as stated in 15-1-409, MCA.

(2) "Election to Waive Protested Taxes form" means the form to be filed with the department by the school districts that choose to waive protested taxes authorized by 15-1-409, MCA. This form includes: school district legal entity number, board chair signature, a description of relevant policies, and mailing addresses for submission to the Department of Revenue and the Superintendent of Public Instruction.

(3) "Property identification" means geocode, county assessor code, or parcel identification code.

(4) "Protested School Tax Remittance form" means the form to be submitted with each remittance payment to the Department of Revenue by the county treasurer. This form tabulates total taxes assessed, protested, and attributable to the levy district by: school district, parcel owner, and property identification.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-409, 20-9-369, MCA
History: NEW, 2010 MAR p. 2226, Eff. 9/24/10; AMD, 2014 MAR p. 1527, Eff. 7/11/14.

Mont. Admin. R. 42.2.902 Election to Waive Protested Taxes - School Districts Notification Requirements

(1) School districts electing to waive their protested taxes as provided in 15-1-409, MCA, shall submit the Election to Waive Protested Taxes form to the Department of Revenue, county treasurer, and Superintendent of Public Instruction by the third Monday in January.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-409, 20-9-369, MCA
History: NEW, 2010 MAR p. 2226, Eff. 9/24/10.

Mont. Admin. R. 42.2.903 County Treasurers Notification Requirements

(1) For each school district electing to waive protested taxes, the applicable county treasurer shall submit the Protested School Tax Remittance form and the protested tax remittance to the Department of Revenue by the first Monday in February and as appropriate for subsequent remittance payments.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-409, 20-9-369, MCA
History: NEW, 2010 MAR p. 2226, Eff. 9/24/10.

Mont. Admin. R. 42.2.904 Department of Revenue Notification Requirements

(1) The Department of Revenue shall submit adjusted taxable value information to the Superintendent of Public Instruction, for each school district electing to waive their protested taxes, as provided in 15-1-409, MCA, by the second Monday in February.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-409, 20-9-369, MCA
History: NEW, 2010 MAR p. 2226, Eff. 9/24/10.

Mont. Admin. R. 42.2.905 Election Requirement

(1) A school district electing to waive their protested taxes shall elect to waive all taxes in all funds under protest for the given tax year.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-409, 20-9-369, MCA
History: NEW, 2010 MAR p. 2226, Eff. 9/24/10.

Subchapter 42.2.10 Office of Taxpayer Assistance

Mont. Admin. R. 42.2.1001 Definitions

The following definitions apply to terms used in this subchapter:

(1) "Complaint" means a taxpayer's allegation of improper or abusive behavior by an employee of the department.

(2) "Office of Dispute Resolution (ODR)" means the department's dispute resolution office. This office handles disputes that cannot be resolved at a lower level within the department.

(3) "Office of Taxpayer Assistance (OTA)" means the department's independent office that assists taxpayers and advocates on behalf of their needs.

(4) "Problem" means a taxpayer's procedural issue or dispute with the service or inefficiency of the Department of Revenue. It does not include issues of fact or law that are considered by the department's Office of Dispute Resolution.

History

Authorizing statute(s): 15-1-201, 15-1-217, MCA
Implementing statute(s): 15-1-211, 15-1-222, 15-1-223, MCA
History: NEW, 2010 MAR p. 2759, Eff. 11/27/10.

Mont. Admin. R. 42.2.1002 Purpose

(1) Section 15-1-223, MCA, creates within the Department of Revenue, the Office of Taxpayer Assistance (OTA). The OTA has five major purposes which are to:

(a) assist taxpayers with problems and provide easily understandable tax information related to:

(i) instructions and forms;

(ii) audits and corrections;

(iii) collections; and

(iv) appeal procedures.

(b) monitor compliance with the Taxpayer Bill of Rights, as required in 15-1-222, MCA;

(c) receive and evaluate complaints of improper or abusive behavior by employees and make recommendations to the director regarding appropriate actions to be taken;

(d) monitor and report any abuses in collection activities and make recommendations to the director of appropriate actions to be taken; and

(e) perform other functions that will assist taxpayers with their compliance of the Montana's tax laws.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-222, 15-1-223, MCA
History: NEW, 2010 MAR p. 2759, Eff. 11/27/10.

Mont. Admin. R. 42.2.1003 Procedure

(1) The OTA is independent of the department's divisions and reports directly to the director.

(2) The OTA intercedes on a priority basis on behalf of taxpayers when the department's normal procedures and communications with taxpayers break down, especially concerning citizen rights guaranteed by the Taxpayer Bill of Rights.

(3) The department seeks to resolve all questions and problems at the lowest possible level, especially through the regular activities of staff working directly with citizens. Whether staff is responsible for processing returns, conducting audits, appraising property, maintaining records, collecting taxes, or other work, all staff is expected to meet the needs of the public in a respectful manner consistent with relevant laws, rules, and procedures. When staff members are unable to answer questions or resolve problems, those matters are typically referred to division supervisors or specialists. In the limited cases where staff or supervisors cannot solve problems, the matter may be referred by the director to the OTA for handling.

(4) Referrals to the OTA are generally instances where the taxpayer has first tried unsuccessfully to resolve the problem through the department's normal channels. Referrals come from the director's office, legislators, and other agencies, especially the Governor's Citizen Advocate Office, but normally go first through the director. The OTA also receives direct calls and referrals through the department's call center.

(5) The OTA works with the taxpayer until the problem is resolved and often convenes division and bureau experts to assist with additional reviews. The OTA compiles data on the number and type of taxpayer problems and complaints received and evaluates the actions taken to resolve these problems or complaints.

(6) The OTA works with the director's office, divisions, bureaus, and units to provide easily understandable information for taxpayers on taxes, audits, corrections, collections, and appeal procedures. It advocates for clarity and usefulness in all forms of communication, especially for clearer and simpler letters, forms, reports, and web site content.

(7) The OTA relies on the department's divisions, especially the Citizen Services and Resource Management Division and its call center, to answer taxpayer questions regarding:

(a) preparing and filing returns and reports;

(b) Montana statutes administered by the department;

(d) locating documents and payments;

(e) compiling data on problems received; and

(f) conducting taxpayer surveys to obtain evaluations of the quality of service provided by the department.

(8) The OTA receives, evaluates, and responds to complaints from taxpayers related to improper or abusive behavior by employees of the department within 60 days unless the period is mutually extended. The major points in a complaint must be made in writing and taxpayer conferences on these issues are informal and confidential. The complaints are recorded, unless requested otherwise , and a copy is provided to the taxpayer. The OTA reports its recommendations to the director and the taxpayer.

(9) The OTA monitors the department's collection activities, immediately addresses any abuses, and recommends to the director whether a collection activity should be stopped if the taxpayer has not had an adequate opportunity to discuss alternative means of making payments.

(10) The functions of the OTA are distinguished from the Office of Dispute Resolution (ODR), which is an adjudicatory office considering and resolving issues of fact and law for matters under the department's jurisdiction and finalizes the department's decisions on contested maters. In instances where a problem or complaint cannot be resolved through the OTA, this office provides guidance to the taxpayer concerning further proceedings before the ODR. Taxpayers are directed to the ODR rules and procedures found in ARM 42.2.613 through 42.2.621.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-222, 15-1-223, MCA
History: NEW, 2010 MAR p. 2759, Eff. 11/27/10.

Chapter 42.3 Waiver of Penalty and Interest

Subchapter 42.3.1 Waiver of Penalty and Interest

Mont. Admin. R. 42.3.101 Definitions

The following definitions apply to terms used in this subchapter:

(1) "Days" means calendar days. In computing any period of time prescribed or allowed by these rules, the day of the event after which the designated period of time begins to run is not to be included, but the last day of the period so computed is to be included, unless it is a Saturday, Sunday, or a legal holiday, in which event the period runs until the end of the next business day, except as otherwise provided by statute.

(2) "Discretion" means the power to do or to refrain from doing a certain thing.

(3) "Economic hardship" is defined in ARM 42.2.304.

(4) "Good cause" and "sufficient cause" shall be considered synonymous with "reasonable cause", except where otherwise provided by statute or these rules.

(5) "Reasonable cause" is defined in ARM 42.2.304.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.102 Purpose and Application

(1) At the discretion of the department, interest and/or penalties for taxes enforced by the department may be waived. These rules are guidelines for the uniform, fair, and equitable exercise of that discretion. It is the intent of the department to treat all similarly situated taxpayers in a similar manner. In evaluating each request for waiver of interest and/or penalty, the taxpayer's request will be considered on a case-by-case basis. Waiver of a penalty and/or interest will be considered the exception rather than the rule.

(2) The purpose of a penalty is to secure the proper and timely filing of a tax return or statement and the prompt payment of the tax by penalizing the delinquent taxpayer. The purpose of interest on a tax is, in part, to compensate the state of Montana for the loss of interest incurred by the state while the tax is delinquent.

(3) The rules in this subchapter are to be read, interpreted, and enforced as a whole in order to give full effect to each provision. A specific clause is not to be read or interpreted separately from the entire set of rules as a whole.

(4) Except as specifically provided by statute, the waiver of penalty and interest is a discretionary act by the department. These rules do not make the exercise of the department's discretion to waive penalty and interest mandatory or compulsory.

(5) These rules apply only to penalty and interest on a tax which are due because the taxpayer failed to file a tax return or statement or failed to pay any tax on time, including tax assessed as a result of a deficiency assessment.

(6) These rules do not apply to any penalty or interest on a tax, due to any other failure to comply with the tax laws or rules. Specifically, these rules do not apply to penalty and interest on a tax assessed because of fraud or other violation of the law.

(7) In addition, these rules do not apply to any of the following:

(a) to any criminal sanction associated with the laws enforced by the department;

(b) to any debt owed by the department by way of contract, tort, or other nontax related activity of the department; or

(8) Except as provided in 15-1-206, MCA, these rules do not apply to a tax that has no provision for waiver of a penalty and/or interest.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.3.103 Waiver of Interest on the Tax

(1) Except as otherwise provided by statute or rule, interest may be waived by the department for the same reasons or causes as provided in these rules for the waiver of penalties.

(2) Except as provided in (3), 15-1-206, MCA, forbids the waiver of more than $500 in interest on the tax per applicable tax period. Therefore, under no circumstances will interest on a tax in excess of $500 per applicable taxing period be waived by the department.

(3) A taxpayer that has entered into a payment plan with the department to make installment payments of delinquent taxes, interest, and penalties may receive, upon written request, an additional waiver of $100 of interest for each tax period if the taxpayer has complied with all of the conditions of the payment plan.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.3.104 Waiver of Penalties or Interest Assessed as the Result of Litigation

(1) Except as specifically provided for by rule or statute, penalty and interest may be waived for the same reason or cause as provided for in these rules in legal actions prior to a final decision by the Department of Revenue, another agency, or a court or tribunal of competent jurisdiction. However, when a final decision has been rendered by the State Tax Appeal Board or a state court that found a tax, penalty, and interest to be due, the department may not waive the penalty and interest.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.106 Hardship as "reasonable Cause"

(1) Unless otherwise specified by statute or these rules, hardship means economic hardship as defined in ARM 42.2.304.

(2) Examples of economic hardship that may constitute reasonable cause for waiver of penalties and/or interest include:

(a) inability to pay the tax because of an act of God, natural disaster, or emergency as declared by the governor or president;

(b) inability to pay the tax because property and assets were seized by a foreign government;

(c) inability to pay because of seizure of property and assets by a court of law when the court action was not due to acts by the taxpayer;

(d) inability to pay because the taxpayer's assets are temporarily impounded or frozen because of a bank failure;

(e) catastrophic medical expenses.

(3) The examples given in (2) are illustrations only. Other circumstances may exist which constitute economic hardship sufficient to waive penalty and/or interest.

(4) Examples of economic hardship that do not constitute reasonable cause for waiver of penalty and/or interest include:

(a) inability to pay because of a divorce settlement or maintenance action;

(b) inability to pay because of fire or other loss which the taxpayer could have insured against; or

(5) The examples given in (4) are for illustration only. Other circumstances may exist that do not constitute economic hardship sufficient to waive penalty or interest.

(6) Economic hardship will be considered as reasonable cause for waiver of penalties and/or interest on the penalty only when the taxpayer has tendered full payment of the tax and interest on the tax.

(7) If the taxpayer pays the tax on a time-payment-plan, the decision on whether or not the penalty and/or interest on the penalty will be waived will not be made until after the taxpayer has completed full payment of the tax and accrued interest on the tax.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.108 Interest Accruing to a County or Counties and Penalties

(1) The department does not have authority to waive any penalty or interest which accrues to the benefit of a county or counties.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.109 When Decision to Waive Is Made

(1) The final decision to waive penalty and/or interest will not be made until the taxpayer tenders full payment of the tax together with interest on the tax.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.110 Payment with an Nsf Check Is Not Considered a Payment of Taxes

(1) Payment tendered to pay any tax due under Title 15, MCA, which is returned by the bank because of insufficient funds in the taxpayer's account or otherwise dishonored by an operating bank or payor shall be considered void. The taxpayer will be treated as if no payment had been received by the department. Collection of penalty in this case will be discretionary.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.111 Calculation of Time Periods and Filing Dates

(1) Except as otherwise provided by statute or these rules, any claim, statement, remittance, or other document which is transmitted to the department through the United States mail shall be deemed filed and received by this state on the date shown by the post office cancellation mark upon the envelope or other appropriate wrapper containing it. Any claim, statement, remittance, or other document which is mailed but not received by the department or where received with a cancellation mark that is illegible, erroneous, or omitted shall be deemed filed and received on the date mailed if the sender establishes by competent evidence that the claim, statement, remittance, or other document was deposited in the United States mail on or before the date due for filing. In cases of such nonreceipt of a claim, statement, remittance, or other document, the sender must file with the state a duplicate within 30 calendar days after written notification is given to the sender by the department of its nonreceipt of such claim, statement, remittance, or other document.

(2) If any claim, statement, remittance, or other document is sent by United States registered mail, certified mail, or certificate of mailing, a record authenticated by the United States post office of such registration, certification, or certificate shall be considered competent evidence that the report, claim, tax return, statement, remittance, or other document was mailed to the addressee, and the date of registration, certification, or certificate shall be deemed the postmarked date.

(3) If the date for filing any claim, statement, remittance, or other document falls upon a Saturday, Sunday, or legal holiday, the filing shall be considered timely if done on the next business day. Such reports shall be considered filed or received on the date or as provided by law.

(4) Mail with no legible postmark but received within three days after the date for filing may be deemed received on the filing date.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.112 A Tax Will Not Be Waived

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 2-4-201, 15-1-201, 15-1-206, 15-30-305, 15-31-501, 15-35-122, 15-36-107, 15-37-108, 15-38-107, 15-53-104, 15-54-111, 15-55-108, 15-56-111, 15-58-106, 15-59-106, 15-59-205, 15-70-104, MCA
Implementing statute(s): 2-4-201, 15-1-206, 15-30-321, 15-31-502, 15-35-105, 15-36-107, 15-37-108, 15-38-107, 15-53-111, 15-54-111, 15-55-108, 15-56-111, 15-58-106, 15-59-106, 15-59-205, 15-70-210, 15-70-330, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; REP, 2007 MAR p. 509, Eff. 4/27/07.

Mont. Admin. R. 42.3.113 Waiver for Extraordinary Circumstances and in the Interest of the Just and Efficient Enforcement of the Law

(1) Except as otherwise provided by statute, the director or the director's designee may, in their discretion waive a penalty and interest when the taxpayer demonstrates extraordinary circumstances which justify the waiver of the penalty and interest for the just and efficient enforcement of the law.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-35-122, 15-53-155, 15-60-104, 15-65-102, MCA
Implementing statute(s): 15-1-206, 15-1-216, 15-30-2641, 15-31-502, 15-35-105, 15-37-108, 15-38-107, 15-53-155, 15-59-106, 15-60-208, 15-61-205, 15-65-115, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; AMD, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2015 MAR p. 763, Eff. 6/12/15.

Mont. Admin. R. 42.3.114 Application of 15-1-206 (1), Mca

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 2-4-201, 15-1-201, 15-1-206, 15-30-305, 15-31-501, 15-35-122, 15-36-107, 15-37-108, 15-38-107, 15-53-104, 15-54-111, 15-55-108, 15-56-111, 15-58-106, 15-59-106, 15-59-205, 15-70-104, MCA
Implementing statute(s): 2-4-201, 15-1-206, 15-30-321, 15-31-502, 15-35-105, 15-36-107, 15-37-108, 15-38-107, 15-53-111, 15-54-111, 15-55-108, 15-56-111, 15-58-106, 15-59-106, 15-59-205, 15-70-210, 15-70-330, MCA
History: NEW, 1985 MAR p. 113, Eff. 2/1/85; REP, 2007 MAR p. 509, Eff. 4/27/07.

Mont. Admin. R. 42.3.115 Waiver of Late Payment Penalty

(1) An automatic waiver of the late payment penalty if the taxpayer pays tax and interest due when notified by the department within 30 days of the date of the department's first Notice of Assessment (NOA). This automatic waiver provision only applies to the first NOA sent to the taxpayer for the tax period. For example, the department mails monthly statements to taxpayers notifying them of total tax, penalty, and interest due for all tax periods. The department will only apply an automatic waiver of the late payment penalty for the first NOA mailed to the taxpayer for that tax period.

(2) An automatic waiver of the late payment penalty is permitted if the taxpayer, subject to the conditions outlined in 15-30-2512, MCA, files an individual income tax return and pays at least 90 percent of the tax, when due, for the current year.

(3) Subject to (5), waiver of the late payment penalty is allowed if the taxpayer:

(a) files an amended tax return and pays the tax and interest due with the amended return;

(b) pays tax and interest due, as a result of a deficiency, within 30 days of the date of the first deficiency notice; or

(4) Unless otherwise defined in these rules, under no circumstance will interest be waived for tax due.

(5) In order to receive consideration for the waiver of the late payment penalty, the taxpayer will need to request the waiver on a form provided by the department or in writing.

(6) This rule only applies to late payment penalty and does not prohibit the taxpayer from seeking waiver or write-off of interest or additional penalties provided for in other department rules.

History

Authorizing statute(s): 15-1-201, 15-1-217, MCA
Implementing statute(s): 15-1-206, 15-1-216, MCA
History: NEW, 2007 MAR p. 509, Eff. 4/27/07; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.3.120 Department Determination for Cost Effectiveness and Subsequent Account Write Off

(1) The department may write-off any tax, penalty, or interest, when it is determined that it is no longer cost effective to attempt further collection. The reason for such write-off must be documented either in the system notes or the hard file.

(2) The decision of the department to write-off collection of accounts is based upon the following:

(a) the inability of the department to locate delinquent taxpayers in order to properly provide notification of assessments or their right to a hearing, within a reasonable time;

(b) the inability of the department to properly reduce the assessment to a judgment lien by filing a warrant for distraint within a reasonable time;

(c) the anticipated cost of collection significantly exceeds the projected amount of recovery in accordance with existing department collection policies;

(d) the time period for collection provided by law has expired; or

(e) the taxpayer is deceased and the department is unable to locate either an estate or pending probate, or any property or other assets vested in the taxpayers' name.

(3) Unpaid tax obligations, the collection of which is written off by the department are not forgiven and are still payable, but the department will not actively incur further expense to attempt collection on these obligations. However, the department may resume active collection of an account if:

(a) the time period for collection of the assessment or a filed warrant for distraint has not expired; and

(b) the department receives information which significantly changes the original basis for write-off as set forth in (2).

(4) The financial condition of a delinquent taxpayer is not an area of consideration for write-off of collection unless one or more of the elements set forth in (2) is present, or unless a properly completed closing agreement has been authorized.

(5) Upon the final decision of a United States bankruptcy court, barring further collection of a debt, the department shall write-off collection of any tax, penalty, or interest.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-207, 15-1-216, MCA
History: NEW, 1992 MAR p. 1243, Eff. 6/12/92; AMD, 2007 MAR p. 509, Eff. 4/27/07.

Chapter 42.4 Tax Credits

Authorizing statute(s): 15-1-201, 15-32-203, MCA
Implementing statute(s): 15-32-102, 15-32-115, 15-32-201, 15-32-202, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD, 2002 MAR p. 3705, Eff. 12/27/02; AMD, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.118 Multiple Investors Claiming the Alternative Energy System

(1) If more than one qualifying individual invests in a qualifying alternative energy system each may claim the credit provided the total of the credits claimed by all the individuals does not exceed the amount spent. For example, if a married couple invests $1,200 in a qualifying wood stove, they can each claim $500. However, if the same couple invests only $800 in a qualifying wood stove, the combined amount claimed cannot exceed $800.

History

Authorizing statute(s): 15-1-201, 15-32-203, MCA
Implementing statute(s): 15-32-115, 15-32-201, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2008 MAR p. 387, Eff. 2/29/08; AMD, 2009 MAR p. 459, Eff. 5/1/09; AMD, 2010 MAR p. 1407, Eff. 6/11/10.

Mont. Admin. R. 42.4.121 Individual Energy-Related Tax Benefits

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-32-203, MCA
Implementing statute(s): 15-32-102, 15-32-109, 15-32-115, 15-32-201, 15-32-202, MCA
History: NEW, 2010 MAR p. 1407, Eff. 6/11/10; REP, 2022 MAR p. 837, Eff. 5/28/22.

Authorizing statute(s): 15-1-201, 15-32-105, MCA
Implementing statute(s): 15-32-102, 15-32-105, 15-32-106, 15-32-109, MCA
History: NEW, 2010 MAR p. 1406, Eff. 6/11/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2657, Eff. 10/24/14; REP, 2022 MAR p. 837, Eff. 5/28/22.

Subchapter 42.4.3 Individual - Residential Property Tax Credit for the Elderly

Mont. Admin. R. 42.4.301 Definitions

The following definitions apply to this subchapter:

(1) "Amenities" mean items or conditions that enhance the pleasantness or desirability of rental or retirement homes, or contribute to the enjoyment of the occupants, rather than their indispensable needs. Amenities also includes services unrelated to the occupation of a dwelling and provided by personnel, including but not limited to meals, housekeeping, transportation, assisted living, or nursing care.

(2) "Gross household income" means the same as the term defined in 15-30-2337, MCA, and includes:

(a) all capital gains income transactions less return of capital;

(b) federal refundable tax credits received; and

(d) all federal taxable and nontaxable pension, annuity, and IRA payments received during the year;

(e) qualified charitable distributions under IRC § 408(d)(8); and

(f) conversion from a traditional IRA to Roth IRA under IRC § 408A(d)(3).

(3) "Land surrounding the eligible residence for the elderly homeowner/renter credit" means the one-acre farmstead or acre associated with the primary residence. If the one-acre farmstead or acre associated with the primary residence is not separately identified on the tax bill or assessment notice from the other acreage, divide the total number of acres into one; multiply the result by the amount of property tax paid on the land; and add this amount to the property tax on the dwelling.

(4) "Rent" means the amount of money charged to a tenant to occupy a dwelling. Rent does not include amenities.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2337, 15-30-2338, 15-30-2340, MCA
History: NEW, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2013 MAR p. 1450, Eff. 8/9/13; AMD, 2017 MAR p. 2092, Eff. 11/10/17; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.302 Computation of Elderly Homeowner/Renter Tax Credit

(1) When a claimant owns the dwelling but rents the land or owns the land and rents the dwelling, the claimant shall include on the claim form the rent-equivalent tax paid on the rented property to the property tax billed on the owned property. The total shall then be reduced as provided by 15-30-2340, MCA. The credit will be the reduced amount or $1,150, whichever is less.

(2) To calculate the credit, an eligible claimant may use property taxes billed:

(a) on property held in a revocable trust if the grantor(s) of the property or their spouse is the claimant and either or both are trustees of the revocable trust; or

(b) as rent if the property occupied by the claimant is in a name other than the claimant.

(3) When a claimant lives in a health, long-term, or residential care facility (facility), as defined in 50-5-101, MCA, the rent allowed in calculation of the credit is the actual out-of-pocket amount paid for rent.

(a) If one spouse lives in a facility and the other lives at a different address, they may report either the rent paid for the facility or the rent/property taxes billed for the other address, but not both. Married couples who are living apart are entitled to file and receive only one credit per year.

(b) If a claimant lives in a facility, the out-of-pocket rent being claimed must exclude payments for amenities. To satisfy this obligation, the claimant must either:

(i) utilize a detailed statement provided by the facility itemizing the amount paid for rent and for amenities; or

(ii) determine the amount of allowable rent by deducting amenities from the total amount paid as follows:

(A) 20 percent for services related to boarding such as meals, housekeeping, laundry, and transportation;

(B) 30 percent for services related to continuous care such as assisted living, medical care, paramedical care, memory care, medical supplies, and pharmacy; or

(i) Val rents a room in an independent living facility. Her $1,000 monthly payment includes utilities and parking, but no services delivered by personnel. No further calculation is needed. Val is allowed to report the full $1,000 per month as rent.

(ii) Paul rents a room in an independent living facility. In addition to utilities and cable, his $2,500 monthly payment includes boarding such as housekeeping, meals, and transportation provided by staff and contractors. The facility's year-end statement does not itemize his total amount paid. Paul deducts 20 percent ($2,500 - 20%) for the boarding services and may report $2,000 per month as rent.

(iii) Ron lives in a long-term care facility and receives boarding services, assistance with daily living activities, and special memory care. The facility's year-end statement partially itemizes Ron's $40,000 total payment, showing the amount charged by the contractor for his memory care. The statement does not list the amounts charged for boarding and care provided by staff. Ron deducts 50 percent ($40,000 - 50%) for boarding (20%) and care (30%) and may report $20,000 as annual rent.

(iv) George rents an apartment in an assisted living facility. The facility's year-end statement itemizes his $30,000 total payment as $14,400 for rent, $5,000 for boarding, and $10,600 for care. George may report the $14,400 rent or, alternately, choose to deduct 50 percent from the total ($30,000 - 50%) for boarding (20%) and care (30%) and may report $15,000 as annual rent.

(v) Mary rents a room in an assisted living facility for six months while recovering from a medical procedure. Her $2,000 total monthly payment includes assistance with daily living activities provided by staff, but she chose not to receive any additional services such as boarding. The facility does not itemize her payment. Mary deducts 30 percent from the monthly payment ($2,000 - 30%) for the care and may report $1,400 per month as rent. Further, Mary may report either the allowable rent paid to the facility, or the monthly rent she paid for her primary residence during the same six-month period, but not both.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2340, 15-30-2341, 50-5-101, MCA
History: NEW, 1982 MAR p. 608, Eff. 3/26/82; AMD, 1983 MAR p. 1265, Eff. 9/16/83; AMD, 1993 MAR p. 571, Eff. 4/16/93; AMD, 1995 MAR p. 2851, Eff. 12/22/95; AMD, 1996 MAR p. 3148, Eff. 12/6/96; AMD, 1998 MAR p. 183, Eff. 1/16/98; AMD and TRANS, from ARM 42.15.506, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2014 MAR p. 2475, Eff. 10/10/14; AMD, 2017 MAR p. 2092, Eff. 11/10/17; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.303 Claiming an Elderly Homeowner/Renter Tax Credit

(1) The elderly homeowner credit may be claimed by an eligible individual or, if an eligible individual dies before making a claim, by the personal representative of their estate, and must be made on Form 2EC, Montana Elderly Homeowner/Renter Credit.

(2) The time and manner of making a claim for the credit depends on whether the claimant files a return for the year for which the credit is claimed.

(a) A claimant must also meet the eligibility requirements provided in 15-30-2338, MCA, to obtain the credit.

(b) If a claimant files or is required to file a return for the year for which the credit is claimed, the claim must be filed with the return on or before the due date of the return, including extensions. ARM 42.15.301 provides the rules for determining whether an individual is required to file a return. If a return is made by or for an eligible individual without making a claim for the credit, the credit may be claimed by filing an amended return within three years after the due date of the return, not including extensions.

(c) If an eligible individual is not required to file a return, the claim must be submitted no later than April 15th of the fourth calendar year following the claim year.

(d) If an eligible individual is required to, but did not, file a return, the claim must be made by filing a return with completed Form 2EC as provided in (2)(b).

(3) The following are examples of the application of this rule:

(a) A claimant is required to file a return for 20X1 and, although eligible, neglects to claim the credit by filing Form 2EC with their 20X1 return which they file April 6, 20X2. The claimant may claim the credit by filing an amended 20X1 return with completed Form 2EC on or before April 15, 20X5.

(b) A claimant, who is not required to file a return for 20X1, dies in February 20X2. The claimant's personal representative, appointed June 20X2, may at any time before April 15, 20X5, either file a 20X1 return for the claimant with completed Form 2EC or file Form 2EC without filing a 20X1 return.

(c) A claimant is required to, but does not file an individual income tax return for 20X2. The claimant or their personal representative may claim the credit by filing a 20X2 return with completed Form 2EC on or before April 15, 20X6.

History

Authorizing statute(s): 15-30-2609, 15-30-2620, MCA
Implementing statute(s): 15-30-2338, 15-30-2609, 15-30-2339, MCA
History: NEW, 1984 MAR p. 2034, Eff. 12/28/84; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD and TRANS, from ARM 42.15.324, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Subchapter 42.4.4 Individual - Credit Allowed Resident Taxpayers for Income Taxes Imposed by Foreign States and Countries

Mont. Admin. R. 42.4.401 Definitions

The following definitions apply to this subchapter:

(1) "Another state" or "other state" means a state of the United States other than Montana, the District of Columbia, the Commonwealth of Puerto Rico, any other territory or possession of the United States, and a foreign country.

(2) "Foreign income tax" means the income tax paid to another state for which the credit described in ARM 42.4.402 is claimed.

(3) "Income tax" means a tax measured by and imposed on net income and, in the case of an S corporation and partnership, includes an excise tax or franchise tax that is imposed on, and measured by, the net income of the S corporation or partnership. The term does not include any other taxes such as, but not limited to, franchise or license taxes or fees not measured by net income, gross receipts taxes, gross sales taxes, capital stock taxes, or property, transaction, sales, or consumption taxes. The term does not include penalty or interest paid in connection with an income tax.

(4) "Taxable foreign income" means the income from the other state that is included in the claimant's Montana taxable income.

(5) "Total foreign income" means the income of the other state upon which the foreign income tax was computed.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2302, MCA
History: NEW, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.402 Credit for Income Taxes Paid to Another State or Country

(1) A Montana resident is allowed a nonrefundable credit against their Montana income tax liability for:

(a) income taxes they paid to another state or foreign country on income which is also subject to Montana income tax;

(b) as a shareholder, their pro rata share of income taxes paid by an S corporation to another state or foreign country on income that is subject to Montana income tax as provided in Title 15, chapter 30, MCA; and

(c) as a partner, their distributive share of income taxes paid by a partnership to another state or foreign country on income that is subject to Montana income tax as provided in Title 15, chapter 30, MCA.

(2) The credit is allowed under the following conditions and limitations:

(a) the credit is allowed only with respect to an income tax imposed by law and actually paid. An income tax is a tax measured by and imposed on net income and, in the case of an S corporation or partnership, includes an excise tax or franchise tax that is imposed on and measured by the net income of the entity. The credit is not allowed for other taxes such as, but not limited to, franchise or license taxes or fees not measured by net income, gross receipts taxes, gross sales taxes, capital stock taxes, or property, transaction, sales, or consumption taxes. The credit is not allowed for penalty or interest paid in connection with an income tax;

(b) in the case of a claimant who either becomes or ceases to be a Montana resident during the tax year, the credit is allowed only with respect to income earned during the part of the year the claimant was a resident of this state;

(c) the credit is allowed only with respect to an income tax that the claimant does not claim as a deduction in determining Montana taxable income;

(d) the credit is allowed only if the state or foreign country imposing the income tax liability does not allow the claimant a credit for Montana income tax liability incurred with respect to the income derived within such state or foreign country; and

(e) the credit is allowed for taxes paid to a foreign country only to the extent the taxes paid exceed either:

(i) the amount claimed under IRC § 904(a) plus any carryback and carryover amount allowed under IRC § 904(c); or

(ii) the amount claimed under IRC § 904(k).

(3) The credit against income taxes is claimed on a return for the same year that the claimant reports the income associated with the tax paid to the other state or country. Because the credit is nonrefundable and any unused credit may not be used in another tax year, taxes that, for federal income tax purposes, are deemed paid or accrued in a carryback or carryover year must be removed before calculating the credit for income taxes paid to another state or country.

(4) The credit cannot be claimed by an individual for taxes paid to another state or country by an estate or trust.

(5) If a claimant amends the amount of income reported to the other state or a foreign country on which the credit was based, the claimant shall file an amended return to recalculate the credit allowed.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2302, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD and TRANS, from ARM 42.15.501, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.403 Computation of Credit for Tax Paid to Another State or Country Special Applications

(1) In determining the tax credit allowed, the computations in this rule must be made separately for each state or foreign country's income tax with respect to which a credit is claimed.

(2) If the claim for a credit does not include the claimant's share of income tax paid to another state or country by an S corporation or partnership in which the claimant is a shareholder or partner:

(a) determine the amount of income taxable by the other state or foreign country that is included in Montana taxable income, but do not include income that is exempt in Montana;

(b) determine the amount of tax paid to the other state or foreign country on income that is not exempt in Montana by multiplying the tax paid to the other state or foreign country by a fraction:

(i) the numerator of which is the amount of income taxable by the other state or foreign country that is included in Montana taxable income (excluding income exempt in Montana); and

(ii) the denominator of which is the total amount of income taxable by the other state or foreign country (including income exempt in Montana);

(c) determine the proportionate amount of the Montana income tax attributable to income taxed by the other state or foreign country by multiplying the Montana income tax liability, as determined without the credit, by a fraction:

(i) the numerator of which is the claimant's income taxable by the other state or foreign country that is included in the claimant's Montana taxable income; and

(ii) the denominator of which is the claimant's total Montana taxable income;

(d) the credit allowable is the lower of:

(i) the amount of income tax reported and paid to the other state or foreign country;

(ii) the amount of the income tax reported and paid to the other state or foreign country on income that is not exempt in Montana, the result of the calculation in (2)(b); or

(iii) the proportionate amount of the Montana income tax attributable to income taxed by the other state or foreign country, the result of the calculation in (2)(c).

(3) If the claim for credit does include the claimant's share of income tax paid to another state or country by an S corporation or partnership on income that is subject to Montana income tax:

(a) increase the claimant's Montana taxable income for the tax year the entity deducted the income taxes by the claimant's share of the entity's deduction;

(b) calculate the Montana income tax liability taking the increase in Montana taxable income into account;

(c) determine the claimant's share of the amount of net entity income that is included in Montana taxable income (do not include income that is exempt in Montana);

(d) determine the claimant's share of the amount of income tax reported and paid to the other state or foreign country by the entity on income that is not exempt in Montana by multiplying the share of the amount of tax reported and paid to the other state or foreign country by the entity by a fraction:

(i) the numerator of which is the share of the amount of the entity's net income included in the Montana taxable income (excluding income exempt in Montana); and

(ii) the denominator of which is the share of the total amount of the entity's net income (including income exempt in Montana);

(e) multiply the recalculated Montana income tax liability by a fraction, the numerator of which is the claimant's share of income of the entity included in their Montana taxable income, adjusted as provided in (3)(a), and the denominator of which is their total Montana taxable income, adjusted as provided in (3)(a);

(f) the credit allowable is the lower of:

(i) the share of the amount of income tax reported and paid by the entity to the other state or foreign country;

(ii) the share of the amount of the income tax reported and paid to the other state or foreign country by the entity on the share of income that is not exempt in Montana, the result of the calculation in (3)(d); or

(iii) the proportionate amount of the Montana income tax attributable to the share of income of the entity reported to the other state or foreign country, the result of the calculation in (3)(e).

(4) If the tax paid to the other state includes tax on income taxed under both 15-30-2103(1) and (2), MCA, separate calculations for both types of income are required. When a claimant's Montana taxable income includes net long-term capital gains taxed under 15-30-2103(2), MCA, which are also taxed in another state, the amount of credit allowed against the Montana tax on the gains shall be based only on the tax paid to the other state(s) on those gains.

(5) The following are examples of calculating these credits paid to another state or country:

(a) Example 1 – The claimant, a full-year Montana resident, sold real property in State X in 20X1. State X does not provide nonresidents a credit for income earned in that state if that income is taxable in another state. In 20X2, the claimant was legally required to, and did, file a 20X1 State X income tax return reporting the transaction and paying State X an income tax of $700. The claimant's $5,000 gain on the sale of the State X property was included in the taxable income reported on the 20X1 Montana income tax return. The claimant's 20X1 Montana income tax liability was $3,400. The claimant's total 20X1 Montana taxable income was $23,000, which included the $5,000 gain on the sale of property in State X. The amount of credit the claimant may claim against the 20X1 Montana income tax liability is $700, the smaller of the amounts in (i) through (iii):

(i) The amount of income tax paid to State X is $700;

(ii) The amount of income tax paid to State X on income that is not exempt in Montana is $700. This amount is determined by multiplying the tax paid to State X ($700) by a fraction, the numerator of which is the amount of income from State X that is included in Montana taxable income ($5,000), and the denominator of which is the total amount of income from State X, including any income that is exempt in Montana. The calculation is $700 x ($5,000/$5,000) = $700;

(iii) The proportionate amount of the Montana income tax attributable to income taxed by State X is $739. This amount is determined by multiplying the Montana income tax liability without the credit ($3,400) by a fraction, the numerator of which is the income from State X included in Montana taxable income ($5,000), and the denominator of which is total Montana taxable income ($23,000). The calculation is $3,400 x ($5,000/$23,000) = $739.

(b) Example 2 – The claimant, a full-year Montana resident, was a shareholder in an S corporation that was engaged in banking in State X in 20X1. State X does not allow S corporations engaged in financial businesses to elect state-level S corporation treatment and imposes a tax on them measured by net income. The following represents what occurred:

(i) The S corporation was required to and did file a 20X1 income tax return with State X in 20X2 and paid a tax measured by its net income of $132,000, $121,000 by estimated payments made in 20X1 and the balance of $11,000 in 20X2 when it filed its 20X1 return;

(ii) The S corporation paid $15,000 tax to State X for tax year 20X0 when it filed its 20X0 return in 20X1. The S corporation's non-separately stated and separately stated items for tax year 20X1 were as follows, of which the Montana resident shareholder's share was 10 percent:

(A) An ordinary income of $2,000,000 from banking business includes a deduction of $136,000 for State X taxes paid in 20X1, $121,000 for estimated payments in 20X1, and $15,000 for 20X0 taxes paid in 20X1;

Tax exempt interest income $1,200,000

Ordinary dividends 300,000

(B) The claimant's total 20X1 Montana taxable income was $500,000, which included 10 percent of the S corporation's ordinary dividends, or $30,000, and 10 percent of the ordinary income from its banking business, or $200,000;

(C) The shareholder's $200,000 share of the S corporation's ordinary income from its business was reduced by the shareholder's share of the S corporation's deduction for $136,000 income taxes paid to State X in 20X1, or by $13,600 (had the shareholder paid the shareholder's 10 percent share of the State X's taxes rather than the S corporation, the shareholder's 10 percent pro rata share of the S corporation's ordinary income for 20X1 would have been $213,600);

(D) The shareholder's 10 percent share of the S corporation's tax-exempt interest, or $120,000, is exempt from Montana individual income tax but is subject to tax by State X; and

(E) Assume the claimant's 20X1 Montana tax liability would be $50,000 if the credit were not claimed;

(iii) The claimant calculates the Montana income tax liability and the amount of credit the claimant may claim against the 20X1 income tax liability as follows:

(A) The claimant's Montana taxable income is increased by the pro rata share of the S corporation's deduction for State X taxes paid for which the claimant claims the credit;

Montana taxable income: $500,000

Reverse deduction: 13,600

Adjusted Montana taxable income: $513,600

(B) The claimant's pro rata share of the tax reported and paid to State X by the S corporation for 20X1 ($13,200) is multiplied by the proportion of the claimant's pro rata share of the S corporation income taxed in State X that is not exempt in Montana ($230,000) to the claimant's pro rata share of the amount of income that is taxable in State X, including income that is exempt in Montana ($350,000):

Ordinary income from banking operations $200,000

Ordinary dividends 30,000

S corporation income exempt from Montana tax 120,000

The claimant's share of income tax reported and paid to State X on income that is not exempt in Montana:

$13,200 x $230,000 / $350,000 = $8,674

(C) The claimant's Montana income tax liability is recalculated. Tax on adjusted Montana taxable income of $513,600: $56,500 (assumed result). The recalculated Montana income tax liability ($56,500) is multiplied by the ratio of S corporation net income included in Montana taxable income, increased by the pro rata share of the S corporation deduction for the income taxes paid ($200,000 + $30,000 + $13,600 = $243,600) to the claimant's total Montana taxable income, increased by the pro rata share of the S corporation deduction for income taxes paid ($513,600).

Montana income tax attributable to income that is taxed in both states:

$56,500 x $243,600 / $513,600 = $26,798

(D) The allowable credit is $8,674, the lower of:

(I) pro rata share of the income tax reported and paid by the S corporation, $13,200;

(II) pro rata share of the amount of the income tax reported and paid to the other state or foreign country by the S corporation on their pro rata share of income that is not exempt in Montana, $8,674; and

(III) proportionate amount of the Montana income tax attributable to their pro rata share of income of the S corporation reported to the other state or foreign country, $26,798.

(c) Example 3 – A full-year Montana resident pays $1,000 in income taxes to a foreign country. For federal income tax purposes, the claimant elects to claim the federal foreign credit for those taxes rather than a deduction. The amount of the foreign federal tax credit is $800, $500 of which the claimant claims currently and $300 of which is allowed to be carried back and forward under IRC § 904(c). In calculating the Montana credit for taxes paid to the foreign country, the claimant must use $200 rather than $1,000 as the amount of taxes paid to the foreign country.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-124, MCA
History: Eff. 12/31/72; AMD and TRANS, from ARM 42.15.502, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2017 MAR p. 2095, Eff. 11/10/17; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.404 Deductions Not Allowed When Credit Claimed (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: Eff. 12/31/72; AMD and TRANS, from ARM 42.15.422, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Subchapter 42.4.5 Individual - Capital Gain Credit

Mont. Admin. R. 42.4.501 Definitions (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2618, MCA
Implementing statute(s): 15-30-2103, 15-30-2104, 15-30-2301, MCA
History: NEW, 2004 MAR p. 2600, Eff. 10/22/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.502 Capital Gain Credit (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2618, MCA
Implementing statute(s): 15-30-2104, 15-30-2106, 15-30-2301, MCA
History: NEW, 2004 MAR p. 2600, Eff. 10/22/04; AMD, 2008 MAR p. 57, Eff. 1/18/08; AMD, 2010 MAR p. 1211, Eff. 5/14/10; AMD, 2017 MAR p. 2095, Eff. 11/10/17; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Authorizing statute(s): 15-30-2372, MCA
Implementing statute(s): 15-30-2371, MCA
History: NEW, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1211, Eff. 5/14/10; REP, 2017 MAR p. 2095, Eff. 11/10/17.

Subchapter 42.4.7 Property Tax Credit Under 15-30-2336, MCA

Mont. Admin. R. 42.4.702 Qualifying for the Property Tax Credit Under 15-30-2336, Mca

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-2104, 15-30-2636, MCA
Implementing statute(s): 15-1-201, 15-30-2636, MCA
History: NEW, 2008 MAR p. 58, Eff. 1/18/08; AMD, 2010 MAR p. 1211, Eff. 5/14/10; REP, 2017 MAR p. 2095, Eff. 11/10/17.

Mont. Admin. R. 42.4.703 Calculation of the Refundable Individual Income Tax Credit Under 15-30-2336, Mca

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2336, MCA
Implementing statute(s): 15-6-134, 15-6-222, 15-30-2336, MCA
History: NEW, 2008 MAR p. 58, Eff. 1/18/08; AMD; 2010 MAR p. 1211, Eff. 5/14/10; REP, 2017 MAR p. 2095, Eff. 11/10/17.

Subchapter 42.4.8 Education Donation Credits

Mont. Admin. R. 42.4.801 Definitions

The following definitions apply to terms used in this subchapter:

(1) "School district," for the purposes of this rule, means a Montana public elementary school district or public high school district, or any of the three state-funded public schools: Montana School for the Deaf and Blind, the Department of Corrections – adult school, and the Department of Corrections – youth school.

History

Authorizing statute(s): 15-1-201, 15-30-3114, MCA
Implementing statute(s): 15-30-3101, 15-30-3111, MCA
History: NEW, 2021 MAR p. 1968, Eff. 1/1/22.

Mont. Admin. R. 42.4.802 Qualified Education Provider

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-3114, MCA
Implementing statute(s): Montana Constitution, Art. V, Section 11, Montana Constitution, Art. X, Section 6, 15-30-3101, MCA
History: NEW, 2015 MAR p. 2331, Eff. 12/25/15; REP, 2021 MAR p. 122, Eff. 1/30/21.

Mont. Admin. R. 42.4.803 School District and Student Scholarship Organization (sso) Requirements and Preapproval Process

(1) Prior to registering a donation with the department, a public school district (PSD) must designate at least one administrative user who is responsible for creating and maintaining an account at the department’s education donations portal. Before accepting donations for the tax credit under 15-30-3110, MCA, the PSD’s administrative user must request preapproval from the department. The preapproval request is located on the department's website at the education donations portal and the request must include the following information:

(a) the PSD name, address, and federal employer identification number; and

(b) identity of the PSD’s donation manager, including name, title, phone number, and e-mail address.

(2) Prior to registering a donation eligible for the tax credit under 15-30-3111, MCA, a student scholarship organization (SSO) shall apply for certification as required by 15-30-3103, MCA. An SSO may apply between July 1 and September 1, and a certification is issued for a two-year period. After expiration of a certification, an SSO must re-apply for certification. The application is located on the department's website at the education donations portal, and must include the following information:

(a) the SSO’s name, address, and federal employer identification number;

(b) identify the SSO’s donation manager, including title, phone number, and e-mail address; and

(3) The department will review an application under (2) and issue a written approval or denial to the SSO within 60 days of receipt. For purposes of this rule, date of receipt means the date the application was entered into the department’s tax administration system. If the department does not issue a decision within 60 days, the SSO shall be deemed certified unless the failure to issue a decision was because the SSO did not provide information necessary to process its application or otherwise respond to department requests. An application that is deemed certified under this rule does not prohibit the department from subsequently reviewing an SSO’s qualifications under 15-30-3113, MCA.

(4) An SSO is allowed 30 days from the date of the department’s denial letter to request reconsideration and an opportunity to correct any application deficiencies that were the basis for the denial.

(a) The applicant’s reconsideration request must be in writing and state the basis for its objection to the denial. The applicant must also provide or correct the information or documents the department determined deficient.

(b) If the reconsideration request is sent by the U.S. Postal Service or by any other generally accepted delivery service, the objection must be postmarked within 30 days of the date of the denial letter. If it is sent by e-mail, it must be sent within 30 days of the date of the denial letter. Failure to respond within 30 days is an admission that the SSO agrees with the department’s denial.

(5) The department shall review the request and the materials in (4) and will issue a final written decision within 30 days of receipt. The department and SSO may mutually agree to an extension of this 30-day period. The department’s final decision is not appealable; however, an SSO may apply for certification with the department for the tax year following the tax year for which the denial was issued.

(6) No later than December 31 of each year, an SSO must provide links to its public website that contains the information required under 15-30-3103(1)(j), MCA. The SSO is also responsible for ensuring website and link functionality at all times.

(7) A PSD or SSO must register each donation, upon receipt, in the department's registration system. Preapproval of the amount of donation eligible for the credit will be provided at the time the PSD or SSO registers the donation in the department's registration system.

(8) With respect to the aggregate limit of tax credits allowed for a year, the priority of donations is based upon the time and date stamp issued by the department's registration system when a PSD or SSO completes registration of the donation. Donations made in excess of the aggregate limits and credit cap, which is the amount of the credit provided under 15-30-3110 and 15-30-3111, MCA, will not be eligible for the tax credit.

(9) The department will certify to a PSD or SSO the amount of credit available to the taxpayer when the PSD or SSO completes the registration of the donation in the department's registration system.

History

Authorizing statute(s): 15-1-201, 15-30-3114, MCA
Implementing statute(s): 15-30-3102, 15-30-3103, 15-30-3105, 15-30-3106, MCA
History: NEW, 2015 MAR p. 2331, Eff. 12/25/15; AMD, 2021 MAR p. 1968, Eff. 1/1/22; AMD, 2026 MAR, Notice No. 2026-154, Eff. 9/26/26.

Mont. Admin. R. 42.4.804 Credit Limitations and Claims

(1) A claimant may claim a credit for contributions made in cash to a school district provided in 20-9-901, MCA, and/or a student scholarship organization (SSO), provided in 15-30-3110, MCA. For the purpose of this rule, cash includes:

(a) U.S. currency;

(b) a personal check;

(d) money order;

(e) bank draft;

(f) an electronic bank account transfer (e.g., wire transfer, ACH draft);

(g) a credit card transaction (less any transaction surcharges or fees); or

(h) traveler's check.

(2) The maximum credit that may be claimed in a tax year by an individual claimant or a corporation for allowable contributions to:

(a) a school district is $200,000; and

(b) an SSO is $200,000.

(3) An allowable contribution from:

(a) an S corporation passes to its shareholders based on their ownership percentage; and

(b) a partnership or limited liability company taxed as a partnership passes to their partners and owners based on their share of profits and losses as reported for Montana income tax purposes.

History

Authorizing statute(s): 15-1-201, 15-30-3114, MCA
Implementing statute(s): 15-30-3101, 15-30-3111, MCA
History: NEW, 2015 MAR p. 2331, Eff. 12/25/15; AMD, 2021 MAR p. 1968, Eff. 1/1/22; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Subchapter 42.4.12 Corporation - General

Mont. Admin. R. 42.4.1202 Application of Credits Against Corporate Income Tax Liability

(1) Only the corporation that earned the tax credit may claim that credit against its own corporate income tax liability. A corporation earns a tax credit if it is the entity that made the qualifying investment or expenditure to generate the applicable tax credit.

(2) Except as provided for in 15-32-508, MCA, in the case of a merger or consolidation, if a credit is earned by a corporation that is no longer in existence the credit may not be claimed against the tax liability of the surviving corporation.

(3) Except as provided for in 15-32-508, MCA, in the case of a corporate entity that has converted to a disregarded entity, any credit earned by the entity prior to the conversion may not be claimed against the tax liability of another entity.

(4) As provided in (1), tax credits are applied on a separate entity basis. A tax credit may not be transferred, assigned, or otherwise used to reduce the tax liability of any other corporation, even if that other corporation is a member of the same unitary business group as the corporation that earned the credit.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 5-30-2320, 15-30-2326, 15-30-2380, 15-31-130, 15-31-131, 15-31-134, 15-31-150, 15-31-151, 15-31-161, 15-32-115, 15-32-402, 15-32-503, 15-32-602, 15-32-701, 15-32-703, 15-50-207, 17-6-316, MCA
History: NEW, 2017 MAR p. 2095, Eff. 11/10/17; AMD, 2022 MAR p. 166, Eff. 1/29/22; AMD, 2022 MAR p. 837, Eff. 5/28/22.

Authorizing statute(s): 15-31-127, 15-31-501, MCA
Implementing statute(s): 15-31-125, MCA
History: NEW, Eff. 4/6/76; TRANS, from ARM 42.23.522, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2022 MAR p. 166, Eff. 1/29/22.

Subchapter 42.4.17 Individual and Corporation - Emergency Lodging

Mont. Admin. R. 42.4.1702 Credit for Emergency Lodging

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2103, 15-30-2381, 15-31-101, 15-31-102, 15-31-171, MCA
History: NEW, 2009 MAR p. 12, Eff. 1/16/09; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2657, Eff. 10/24/14; AMD, 2017 MAR p. 2095, Eff. 11/10/17; REP, 2022 MAR p. 837, Eff. 5/28/22.

Subchapter 42.4.22 Individual and Corporation - Employer ApprenticeshipTax Credit

Mont. Admin. R. 42.4.2202 Employer Apprenticeship Tax Credit

(1) Subject to the restriction that apprenticeship tax credits may not exceed the taxpayer's total tax liability, the total amount of credit an employer participating in a state-registered apprenticeship training program may claim is determined by the Montana Department of Labor and Industry (DLI). The department can only adjust the total credit allocation among the owners of an S corporation, partnership, or limited liability company in order to conform to 15-30-2357 and 15-31-173, MCA, and this rule.

(a) If the employer is an S corporation, the shareholders' share of the total credit is based on their pro rata share of income or loss.

(b) If the employer is a partnership or a limited liability company that is taxed like a partnership, the partners' or members' share of the total credit is based on the their distributive share of the entity's income or loss reported for Montana income tax purposes.

(2) A taxpayer who files a tax return on a calendar year basis shall claim the credit for the tax year in which the DLI approved the credit.

(3) A taxpayer who files a tax return on a fiscal year basis shall claim the credit allowed for the calendar year that ends within the taxpayer's fiscal period.

(4) The taxpayer shall include copies of all tax certification numbers, agreements, DLI approval notice, and supporting documents when filing their return. If the return is filed electronically using software that does not support attachments, the taxpayer shall retain the information and provide it to the department upon request.

(5) When reviewing a claim for the credit, the department may request additional information to determine a taxpayer's eligibility for the allocation of the credit being claimed. This information may include, but is not limited to:

(a) a Montana Schedule K-1 issued by a partnership, S corporation, or fiduciary indicating the partner, shareholder, or beneficiary's share of the credit; or

(b) a return filed by a partnership, S corporation, or fiduciary including information showing the owners of the entity.

History

Authorizing statute(s): 15-30-2357, 15-31-501, MCA
Implementing statute(s): 15-30-2357, 15-31-173, 39-6-109, MCA
History: NEW, 2017 MAR p. 2096, Eff. 1/1/18.

Subchapter 42.4.23 Individual and Corporation - Unlocking Public Lands Tax Credit

Mont. Admin. R. 42.4.2301 Definitions

The following definitions apply to terms used in this subchapter:

(1) "Agreement" means the contract for participation entered into between the Montana Department of Fish, Wildlife and Parks (FWP) and the landowner(s) for purposes of guaranteeing access to public land under the unlocking public lands program.

(2) "Tax certification number" means the number issued by FWP certifying that the landowner is providing qualified access to public land under the unlocking public lands program provided for in 87-1-294, MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2380, 87-1-294, MCA
History: NEW, 2014 MAR p. 2659, Eff. 10/24/14; AMD, 2017 MAR p. 2095, Eff. 11/10/17.

Mont. Admin. R. 42.4.2302 Claiming the Unlocking Public Lands Tax Credit

(1) To claim the unlocking public lands tax credit, a claimant who is a landowner and has met the cooperative agreement (agreement) requirements of 87-1-294, MCA, must file a Montana tax return (Form 2 for individuals, Form FID-3 for estates and trusts, or Form CIT for C corporations), regardless of whether they are required to file a return for the year the credit is being claimed.

(2) A claimant who files a return on a calendar year basis shall claim the credit for the tax year in which the agreement applied.

(3) A claimant who files a return on a fiscal year basis shall claim the credit for the tax year in which the agreement was certified by the Montana Department of Fish, Wildlife and Parks.

(4) A claimant shall include copies of all tax certification numbers, agreements, and supporting documents when filing their return.

(5) When reviewing a claim for the credit, the department may request additional information to determine a claimant's eligibility for the allocation of the credit being claimed. This information may include, but is not limited to:

(a) documentation establishing ownership and ownership percentage of the parcel(s);

(b) a Montana Schedule K-1 issued by a partnership, S corporation, or fiduciary indicating the partner, shareholder, or beneficiary's share of the credit; or

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2380, 87-1-294, MCA
History: NEW, 2014 MAR p. 2659, Eff. 10/24/14; AMD, 2017 MAR p. 2095, Eff. 11/10/17; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2303 Allocation of Credit for Access Through Land with Multiple Owners and Land Owned by Pass-Through Entities

(1) For purposes of calculating the tax credit permitted by the unlocking public lands program, parcels held wholly or in part by an entity disregarded for tax purposes shall be treated as owned by the entity's owner or owners. For example, a parcel held in the name of a single-member limited liability company that is disregarded for tax purposes shall be considered as owned by the sole member, or sole member and spouse, if applicable.

(2) Unless substantiation of a different ownership split is provided by all landowners, the credit for access granted through land having multiple owners, such as two individuals or an individual and an unrelated corporation, shall be divided equally among the landowners.

(3) The credit for access through land owned by an S corporation must be allocated to its shareholders in the same manner the S corporation uses to allocate its items of income or loss to its owners for Montana income tax purposes.

(4) A partnership that is entitled to the credit may allocate the total credit in a manner that is mutually agreeable to its partners. Evidence of such an allocation may include, but is not limited to, Montana Schedules K-1, terms of the partnership agreement that are specific to this credit, or a separate agreement between the partners regarding the allocation of this credit. If evidence of the allocation is not provided to the department upon request, or if the information provided is deficient, the total credit must be allocated to the partners in the same manner the partnership allocated its income and losses to its owners for Montana income tax purposes.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2380, 87-1-294, MCA
History: NEW, 2014 MAR p. 2659, Eff. 10/24/14; AMD, 2017 MAR p. 2095, Eff. 11/10/17.

Authorizing statute(s): 15-30-2104, MCA
Implementing statute(s): 15-30-2367, 15-30-2368, 15-31-130, 15-31-132, 33-22-2006, 33-22-2007, MCA
History: NEW, 2010 MAR p. 2231, Eff. 9/24/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; REP, 2017 MAR p. 2095, Eff. 11/10/17.

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-32-703, MCA
History: NEW, 2008 MAR p. 61, Eff. 1/18/08; AMD, 2010 MAR p. 1209, Eff. 5/14/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Subchapter 42.4.26 Individual and Corporation - Recycle Credit Against Individual and Corporate Income Taxes

Mont. Admin. R. 42.4.2601 Definitions

The following definitions apply to this subchapter:

(1) "Finished product" means a marketable product that has economic value and is ready to be used by a consumer.

(2) "Machinery or equipment" is property having a depreciable life of more than one year, whose primary purpose is to collect or process reclaimable material or is depreciable property used in the manufacturing of a product from reclaimed material.

(3) "Primarily" means over 50% of time, usage, or other appropriate measure.

(4) "Process or processing" means preparation, treatment, including treatment of hazardous waste as defined in 75-10-403, MCA, or conversion of a product or material by an action, change, or function or a series of actions, changes, or functions that bring about a desired end result.

(5) "Reclaimed material" is post-consumer material that has been collected and used in a process designed to produce recycled material.

(6) "Recycled material" means a material that can be readily utilized without further processing in place of raw or virgin material in manufacturing a product and consists of materials derived from post-consumer waste, industrial scrap, and material derived from agricultural wastes and other items, all of which can be used in the manufacture of new products.

History

Authorizing statute(s): 15-30-2620, 15-32-611, MCA
Implementing statute(s): 15-32-601, 15-32-602, 15-32-603, 15-32-604, 15-32-609, 15-32-610, MCA
History: NEW, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10.

Mont. Admin. R. 42.4.2602 Additional Deduction for Purchase of Recycled Material

(1) Businesses, including corporations, individuals, and partnerships, may take an additional 10 percent deduction of the expenses related to the purchase of recycled products used within Montana in their business if the recycled products purchased contain recycled material at a level consistent with industry standards and/or standards established by the United States Environmental Protection Agency when such standards exist. The department may request the assistance of the Montana Department of Environmental Quality to determine if the product qualifies as a recycled product. Due to continuing technological advances in the recycling industry, the standards will be subject to constant change. The industry standards to be used will be those in effect at the time the product was purchased.

(2) For a claimant paying individual income tax, the deduction is an adjustment to federal taxable income for individual income tax.

(3) For a corporation paying the corporate income tax/alternative corporate income tax, the deduction is an adjustment to federal taxable income for the corporate income tax/alternative corporate income tax.

(4) A shareholder of an S corporation may claim a share of the allowable deduction for expenditures that the S corporation incurred for purchase of qualified recycled material based on the shareholder's pro rata share of their ownership in the S corporation. A partner of a partnership may claim a share of the allowable deduction for expenditures the partnership incurred for the purchase of qualified recycled material in the same proportion used to report the partnership's income or loss for Montana income tax purposes.

(5) Any deductions claimed are subject to review by the department. The responsibility to maintain accurate records to substantiate deductions remains with a claimant.

History

Authorizing statute(s): 15-32-609, 15-32-611, MCA
Implementing statute(s): 15-32-603, 15-32-609, 15-32-610, MCA
History: NEW, 1992 MAR p. 2196, Eff. 9/25/92; AMD, 1995 MAR p. 2850, Eff. 12/22/95; AMD and TRANS, from ARM 42.15.416, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2014 MAR p. 2178, Eff. 9/19/14; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2604 Credit for Investments in Depreciable Equipment or Machinery to Collect, Process, or Manufacture a Product from Reclaimed Material, or Process Soils Contaminated by Hazardous Wastes

(1) The credit is subject to the limitations outlined in 15-32-602 , MCA, and is available only for the acquisition of machinery and/or equipment that is depreciable, as defined in IRC § 167. The machinery and/or equipment must be used in Montana primarily for the collection or processing of reclaimable material, or to manufacture finished products from reclaimed material.

(2) The basis for the credit is generally the cost of the machinery and/or equipment before consideration of trade-in equipment but the basis shall be reduced by any trade-in machinery and/or equipment which had previously received this credit against the purchase price, transportation cost (if paid by the purchaser) , and the installation cost before depreciation or other reductions. This credit does not increase or decrease the basis for tax purposes. Leased equipment is restricted to capital leases, and the credit is calculated on the amount capitalized for balance sheet purposes under generally accepted accounting principles.

(3) The machinery and/or equipment must be located and operating in Montana on the last day of the tax year for which the credit is claimed. The machinery or equipment must be used to:

(a) collect;

(b) process;

(d) modify;

(e) convert; or

(f) treat solid waste into a product that can be used in place of a raw material for productive use or treat soil that has been contaminated by hazardous wastes.

(4) Examples of such machinery and/or equipment include, but are not limited to:

(a) balers;

(b) bobcats;

(d) compactors;

(e) containers;

(f) conveyors;

(g) conveyor systems;

(h) cranes with grapple hooks or magnets;

(i) crushers;

(j) end loaders;

(k) exhaust fans;

(l) fork lifts;

(m) granulators;

(n) lift-gates;

(o) magnetic separators;

(p) pallet jacks;

(q) perforators;

(r) pumps;

(s) scales;

(t) screeners;

(u) shears;

(v) shredders;

(w) two-wheel carts; and

(x) vacuum systems.

(5) The list in (4) does not include transportation equipment, unless the equipment is specialized solely to collect and process reclaimable material or treat soil that has been contaminated by hazardous wastes.

(6) In the instance of the specialized mobile equipment that does qualify and is used both within and outside of Montana, the credit must be prorated using the following calculation:

D x C x E = Credit allowed

C = credit % in 15-32-602 , MCA

D = days used in Montana

E = cost of equipment

T = total days used

(7) Absent a specific agreement to the contrary, the owners of a small business corporation, partnership, or sole proprietorship must prorate the credit in the same proportion as their ownership in the business.

(8) Only a claimant that owns an interest, either directly or through a pass-through entity such as a partnership or S corporation, and is operating the equipment as the primary user on the last business day of the year, may claim the credit.

(9) The credit is limited to the amount of the claimant's income tax liability or corporation tax liability. Any excess credit is not refundable, nor can it be carried back or forward to other tax years.

(10) The department may disallow a credit resulting from a sale or lease of machinery and/or equipment when the purpose of the transaction does not use the machinery and/or equipment to collect or process reclaimable material, or manufacture a product from reclaimed material.

History

Authorizing statute(s): 15-32-611, MCA
Implementing statute(s): 15-32-601, 15-32-602, 15-32-603, 15-32-604, 15-32-609, 15-32-610, MCA
History: NEW, 1992 MAR p. 2196, Eff. 9/25/92; AMD, 1995 MAR p. 2850, Eff. 12/22/95; AMD and TRANS, from ARM 42.15.508, 2004 MAR p. 2601, Eff. 8/20/04; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2605 Period Covered for the Reclamation and Recycling Credit

(1) The credit must be taken in the tax year in which the machinery/equipment was acquired and placed into service.

(2) Any credit claimed is subject to review by the department. The department may request the assistance of the Montana Department of Environmental Quality when making its determinations. The responsibility to maintain accurate records to substantiate the credit remains with the taxpayer.

History

Authorizing statute(s): 15-32-611, MCA
Implementing statute(s): 15-32-601, 15-32-602, 15-32-603, 15-32-604, 15-32-609, 15-32-610, MCA
History: NEW, 1992 MAR p. 2196, Eff. 9/25/92; AMD, 1995 MAR p. 2850, Eff. 12/22/95; AMD and TRANS, from ARM 42.15.509, 2004 MAR p. 2601, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10.

Subchapter 42.4.27 Individual and Corporation - Qualified Endowment

Mont. Admin. R. 42.4.2701 Definitions

The following definitions apply to this subchapter:

(1) "Allowable contribution," for the purposes of the qualified endowment credit, means a charitable gift made to a qualified endowment. The contribution from an individual to a qualified endowment must be by means of a planned gift, as defined in 15-30-2327, MCA. A contribution from a corporation, small business corporation, estate, trust, partnership, or limited liability company may be made by means of a planned gift or may be made directly to a qualified endowment.

(2) "Donor" means an individual, corporation, estate, or trust that contributes to a qualified charitable endowment either directly or indirectly through a small business corporation or partnership, as required by 15-30-2327, 15-30-2328, 15-30-2329, 15-31-161, and 15-31-162, MCA.

(3) "Paid-up life insurance policies" mean life insurance policies in which all the premiums have been paid prior to the policies being contributed to a qualified endowment. The donor must make the tax-exempt organization the owner and beneficiary of the policy. A paid-up life insurance policy does not have to be on the life of the donor.

(4) "Present value of the charitable gift portion of a planned gift" means the allowable amount of the charitable contribution, as defined in 15-30-2131, and 15-30-2152, MCA, or for corporations, as defined in 15-31-114, MCA, prior to any percentage limitations.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2131, 15-30-2152, 15-30-2327, 15-30-2328, 15-30-2329, 15-31-114, 15-31-161, 15-31-162, MCA
History: NEW, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2008 MAR p. 62, Eff. 1/18/08; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2014 MAR p. 2039, Eff. 9/5/14; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2703 Eligibility Requirements to Hold a Qualified Endowment

(1) To hold a qualified endowment under 15-30-2327(1)(c), MCA, an organization must be:

(a) incorporated or otherwise formed under the laws of Montana and exempt from federal income tax under 26 USC 501(c)(3); or

(b) a Montana chartered bank or trust company, as defined in 15-30-2327, MCA, holding an endowment fund on behalf of a Montana a Montana-based affiliate of a foreign 26 USC 501(c)(3) organization.

(2) A qualifying gift to an institution in (1)(b) at the time of the gift remains a qualifying gift even if subsequent changes affect the institution's prior qualification. For example, a qualifying gift to a Montana chartered bank remains a qualifying gift if the bank is subsequently acquired by a nationally chartered bank.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2327, 15-30-2329, 15-31-161, 15-31-162, MCA
History: NEW, 1998 MAR p. 1004, Eff. 4/17/98; AMD and TRANS, from ARM 42.15.513, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2014 MAR p. 2039, Eff. 9/5/14; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2704 Tax Credit and Deduction Limitations

(1) The credit allowed a corporation, estate, trust, or individual against its tax liability for a contribution of a planned gift is the percentage, as shown in the following table, of the present value of the allowable contribution, as defined in ARM 42.4.2701. The credit allowed against the tax liability of the corporation, estate, or trust for a direct contribution is equal to 20 percent of the charitable contribution. The maximum credit that may be claimed in one year is $15,000 per donor. A contribution made in a previous tax year cannot be used for a credit in any subsequent tax year.

Planned Gifts by Individuals or Entities

Percent of Present Value | Used to Calculate Maximum Credit | Maximum Credit Per Year 40% | $37,500 | $15,000

(2) The credit allowed against a corporate, estate, trust, or individual tax liability for a charitable gift made by a corporation, small business corporation, estate, trust, partnership, or limited liability company directly to a qualified endowment is the percentage, as shown in the following table, of the allowable contribution as defined in ARM 42.4.2701.

Outright Gifts by Eligible Entities

Percent of Allowable Contribution | Allowable Contribution Used to Calculate Maximum Credit | Maximum Credit Per Year 20% | $75,000 | $15,000

(3) Any amount taken as a deduction from federal taxable income that was used to calculate the tax credit must be added back when determining Montana taxable income. The following examples are provided for illustrative purposes only:

(a) An individual makes an eligible planned gift of $20,000. The individual takes a federal itemized deduction for $20,000. The individual's Montana tax liability is $5,000. The tax credit is equal to $5,000. The individual must add back $12,500 to federal taxable income to claim the credit. Forty percent of $12,500 is the amount used to calculate a credit of $5,000.

(b) A trust makes an eligible planned gift of $100,000 and takes a federal deduction in this amount. The trust's tax liability is $30,000. The trust is eligible to claim the maximum amount of credit, $15,000. The trust must add back $37,500 to federal taxable income, which is the amount used to calculate the maximum amount of the tax credit.

(c) A corporation makes an outright gift of $30,000. The corporation's tax liability is $50,000. The tax credit is equal to $6,000. The corporation must add back $30,000 to federal taxable income, which is the amount used to calculate the tax credit.

(4) A contribution to a qualified endowment by a small business corporation, partnership, or limited liability company qualifies for the credit only if the entity carried on a trade or business or rental activity during the tax year the contribution was made.

(5) The contribution to a qualified endowment from a small business corporation, partnership, or limited liability company is passed through to the shareholders, partners, or members in the same proportion as their distributive share of the entity's income or loss for Montana income tax purposes. The proportionate share of the contribution passed through to each shareholder, partner, or member becomes an allowable contribution for that donor for that year, and the credit allowed and the excess contribution deduction allowed are calculated as set forth in (1) and (2). The credit maximums apply at the corporation and individual levels, and not at the pass-through entity's level for partnerships, small business corporations, and limited liability companies.

(6) Deductions and credit limitations for an estate or trust are as follows:

(a) if an estate or trust claims a credit based on the computation of the full amount of the contribution, there is no credit available to beneficiaries;

(b) any portion of a contribution not used in the calculation of credit for the estate may be passed through to the beneficiaries, in the same proportion as their distributive share of the estate's or trust's income or loss for Montana income tax purposes; however, beneficiaries may deduct only that portion of allowable contributions not used toward the credit or deduction claimed by the estate or trust; or

(c) if the estate or trust has deducted the full amount of the contribution, the credit may not be claimed by either the estate, trust, or the individual beneficiaries.

(7) The rate a beneficiary will use to calculate their credit for an allowable contribution passed to them by an estate will be based on the nature of the gift made by the estate. For example, if an estate makes an outright gift to a qualified endowment, and the contribution is passed to a beneficiary, the beneficiary will calculate their credit using the 20 percent rate.

(8) A donor may, at a later date, name or substitute the Montana qualified endowment, as defined in 15-30-2327, MCA, to receive the planned gift provided that the original trust or gift document reserves in the donor the right to do so.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2327, 15-30-2328, 15-30-2329, 15-31-161, 15-31-162, MCA
History: NEW, 1998 MAR p. 1004, Eff. 4/17/98; AMD, 2000 MAR p. 2109, Eff. 8/11/00; AMD, 2002 MAR p. 3722, Eff. 12/27/02; AMD and TRANS, from ARM 42.15.514, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2008 MAR p. 62, Eff. 1/18/08; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2039, Eff. 9/5/14; AMD, 2017 MAR p. 2095, Eff. 11/10/17; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2705 Creating a Permanent Irrevocable Fund

(1) A permanent, irrevocable fund can be created by a restriction in the applicable planned gift document indicating the donor's intention that the contribution shall be held in a permanent, irrevocable fund. For planned gifts other than paid-up life insurance policies, the applicable planned gift document is the trust document, gift annuity contract, life estate agreement or pooled income fund agreement.

(2) A permanent irrevocable fund can be created in a separate gift document accompanying an outright contribution.

(3) A permanent irrevocable fund may be created by either a qualified organization referenced in ARM 42.4.2703 under a separate governing document or when a donor creates an endowment through a gift document.

(4) By creating a permanent, irrevocable fund and receiving the credit, the donor waives the right under 72-30-207, MCA, to release the restriction in the gift document.

(5) All funds created by donors or qualified organizations must meet the requirements of a permanent irrevocable fund provided in these rules.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2327, 15-30-2328, 15-30-2329, 15-31-161, 15-31-162, MCA
History: NEW, 1998 MAR p. 1004, Eff. 4/17/98; AMD, 2000 MAR p. 2109, Eff. 8/11/00; TRANS, from ARM 42.15.515, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10.

Mont. Admin. R. 42.4.2706 Reporting Requirements

(1) The donor must attach a copy of the following information to the tax return reporting the credit:

(a) a receipt acknowledging the amount of the allowable contribution from the:

(i) tax-exempt organization under 26 USC 501(c)(3) holding the qualified endowment receiving the contribution;

(ii) trustee of the trust administering the planned gift; or

(iii) bank or trust company holding a qualified endowment on behalf of a tax exempt organization.

(b) the date of the contribution to the qualified endowment or the planned gift;

(c) the name of the organization incorporated or established in Montana holding the qualified endowment fund or the name of the tax exempt organization on behalf of which the qualified endowment fund is held;

(d) in the case of a charitable trust where the charity is yet to be named, the donor shall include a copy of the disposition clause of the charitable trust which gives evidence that a qualified endowment fund has been created;

(e) a description of the type of gift, i.e. outright gift, charitable remainder unitrust, charitable gift annuity, etc.; and

(f) in the case of an outright gift, the receipt in (a) must state that the contribution was placed in a permanent irrevocable fund as defined in ARM 42.4.2701.

(2) The information required by these rules will be reported on forms prescribed and made available by the department.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2328, 15-30-2329, 15-31-161, 15-31-162, MCA
History: NEW, 1998 MAR p. 1004, Eff. 4/17/98; AMD, 2000 MAR p. 2109, Eff. 8/11/00; TRANS, from ARM 42.15.516, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13.

Mont. Admin. R. 42.4.2707 Qualified Endowment Credit for Corporations

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2327, 15-30-2328, 15-30-2329, 15-31-161, 15-31-162, MCA
History: NEW, 1998 MAR p. 1004, Eff. 4/17/98; AMD and TRANS, from ARM 42.15.518, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; REP, 2013 MAR p. 216, Eff. 2/15/13.

Mont. Admin. R. 42.4.2708 Determining Present Value for the Endowment Credit

(1) For purposes of determining the endowment credit, the present value of a contribution is the amount reported to the Internal Revenue Service for that contribution. The present value of a gift contributed to a qualified endowment is based on its fair market value on the date of the gift.

(2) As derived from the May 2009 IRS Publication 1457 titled "Actuarial Valuations," the life expectancy tables that shall be used when determining the life expectancy of the annuitant or joint life expectancy of the annuitants, within which the first partial or full-year payment of a deferred charitable gift annuity is required to begin in order for it to be deemed a planned gift for the purposes of 15-30-2327, MCA, are set forth in Tables 1 and 2.

(a) Example. The table indicates a 98-year-old annuitant has a life expectancy of 2.5 years. So the first partial year (such as a monthly, quarterly, or semi-annual payment), or full year payment mandated by the annuity contract, must be required to be paid no later than two and one-half years from the date the deferred annuity contract is created.

Table 1: Single Life Expectancies Based on 2000 CM Mortality

Official policy figure

Table 2: Two Life Expectancies Based on 2000 CM Mortality

Official policy figure

$Official policy figure$

Official policy figure

History

Authorizing statute(s): 15-30-2327, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2327, 15-30-2328, MCA
History: NEW, 2000 MAR p. 2109, Eff. 8/11/00; TRANS, from ARM 42.15.519, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2014 MAR p. 2039, Eff. 9/5/14.

Authorizing statute(s): 15-1-201, 15-31-501, MCA
Implementing statute(s): 15-30-2367, 15-31-132, 33-1-207, MCA
History: NEW, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2178, Eff. 9/19/14; REP, 2022 MAR p. 837, Eff. 5/28/22.

Subchapter 42.4.29 Individual and Corporation - Historic Property Preservation

Mont. Admin. R. 42.4.2902 Computation of the Tax Credit for the Preservation of Historic Properties

(1) Montana's tax credit for the preservation of historic buildings is to be computed using the federal credit allowed by 26 USC 47, which is a component of the federal general business credit. No other component of the federal general business credit may be used to compute Montana's credit for the preservation of historic buildings.

(2) Qualifying expenditures used to calculate the credit for the preservation of historic buildings must be reduced by amounts used in calculating other Montana tax credits or tax incentives.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2342, 15-31-151, MCA
History: NEW, 1998 MAR p. 184, Eff. 1/16/98; AMD and TRANS, from ARM 42.15.520, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2015 MAR p. 2362, Eff. 12/25/15.

Mont. Admin. R. 42.4.2903 Computation of Tax Credit for Preservation of Historic Property for Married Taxpayers (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2342, 15-31-151, MCA
History: NEW, 1998 MAR p. 184, Eff. 1/16/98; AMD and TRANS, from ARM 42.15.521, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.2904 Ownership of Historic Property

(1) The credit is allowed to owners of the property who make qualified rehabilitation expenditures.

(2) A lessee that makes its own qualified rehabilitation expenditures to a certified historical building for which it is allowed a federal rehabilitation credit in its own right under IRC 47(c)(2)(B)(vi) when the initial lease term is longer than the building's IRC 168(c) recovery period is allowed to claim the Montana rehabilitation credits based on its own investment.

(3) A lessor who elects under U.S. Treasury regulation 26 C.F.R. 1.48-4(f) and (g) to pass the federal rehabilitation credit to a lessee may not claim the Montana credit and, correspondingly, a lessee to whom the federal rehabilitation credit is transferred is entitled to claim the Montana credit.

(4) A credit for the preservation of historic property jointly owned by more than one individual must be allocated between owners based on each owner's share of ownership in the property. Unless specified otherwise when the property is purchased, percentage of ownership will be considered equal to 100 percent divided by the number of owners.

(5) A credit for the preservation of historic property owned by an S corporation must be allocated to its shareholders based on their pro rata share of ownership in the corporation.

(6) A credit for the preservation of historic property owned by a partnership must be attributed to the partners in the same proportion used to report the partnership's income or loss for Montana income tax purposes.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2342, 15-31-151, MCA
History: NEW, 1998 MAR p. 184, Eff. 1/16/98; AMD and TRANS, from ARM 42.15.522, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2015 MAR p. 2362, Eff. 12/25/15.

Mont. Admin. R. 42.4.2905 Claiming the Historic Preservation Credit

(1) Except as provided in (2), federal Form 3468, the form used in claiming the federal rehabilitation credit, must be attached to the applicable Montana tax returns. S corporations and entities taxable as partnerships must attach the form to their information returns and the owners of the pass-through entities must also attach a copy to their individual income or corporate income tax returns.

(2) A taxpayer who made a valid election to transfer the federal rehabilitation credit to a lessee must attach a copy of the election statement required by U.S. Treasury regulation 26 C.F.R. 1.48-4(f) and (g), and the lessee's Form 3468 that identifies the taxpayer as the transferor. If the credit calculation for certified historic structures on the lessee's Form 3468 contains qualified rehabilitation expenditures other than those incurred by the taxpayer, the taxpayer must provide a schedule breaking out the taxpayer's own expenditures and a pro forma federal credit calculation.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2342, 15-31-151, MCA
History: NEW, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2178, Eff. 9/19/14; AMD, 2015 MAR p. 2362, Eff. 12/25/15.

Subchapter 42.4.30 Individual and Corporation - Infrastructure Users Fee

Mont. Admin. R. 42.4.3002 Who May Claim the Infrastructure User Fee Credit

(1) A claimant may claim a credit for the infrastructure user fee paid to a local government for an "infrastructure loan." The "infrastructure loan," as defined under ARM 8.97.1301, is a loan to the local government from the Montana Board of Investments. The Montana Board of Investments will determine if such loan qualifies for this credit.

(2) A claimant claiming the credit must follow both of the following criteria:

(a) the claimant must meet the provisions set forth in 17-6-309, MCA; and

(b) the claimant must pay the infrastructure user fee.

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 17-6-309 and 17-6-316, MCA
History: NEW, 1996 MAR p. 1178, Eff. 4/26/96; AMD, 2000 MAR p. 1346, Eff. 5/26/00; TRANS, from ARM 42.23.504, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.3003 Claiming the Infrastructure User Fee Credit

(1) A taxpayer who qualifies for the infrastructure user fee credit may take the full credit for the fees paid. The credit is not to exceed the loan principal paid plus interest.

(2) When claiming the credit, the taxpayer must attach to their tax return a completed copy of Form IUFC, Infrastructure User Fee Credit.

(3) A credit will not be allowed for any infrastructure user fee that was not timely paid.

(4) The credit is nonrefundable. Any excess credit must first be carried back to each of the three preceding taxable periods, reducing the tax liability to zero, and then carried forward to each of the seven taxable periods following the taxable period of the credit. The current year credit must be applied first before any carry back or carry forward will be allowed.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 17-6-309, 17-6-316, MCA
History: NEW, 1996 MAR p. 1178, Eff. 4/26/96; TRANS, from ARM 42.23.505, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13.

Mont. Admin. R. 42.4.3004 Recapture of the Infrastructure User Fee Credit

(1) If the board of investments determines that the loan to the local government has not met the conditions set forth in 17-6-309 , MCA, the credit for the infrastructure user fee shall be subject to recapture.

(2) The credit recaptured will be the credit claimed to date to offset the taxpayer's tax liability plus any applicable interest, pursuant to Title 15, chapters 30 and 31, MCA.

(3) Any credit previously eligible for the carry forward on a loan that the board of investments determines does not qualify will not be available for carry forward.

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 17-6-309 and 17-6-316, MCA
History: NEW, 1996 MAR p. 1178, Eff. 4/26/96; TRANS, from ARM 42.23.506, 2004 MAR p. 1965, Eff. 8/20/04.

Subchapter 42.4.31 Individual and Corporation - Contractor Gross Receipt

Mont. Admin. R. 42.4.3102 Credit for Contractor's Gross Receipts Tax - Individual Income Tax

(1) A resident or a nonresident taxpayer is allowed a credit against the taxpayer's Montana income tax liability for public contractor's gross receipts tax paid pursuant to the provisions of 15-50-205 and 15-50-206, MCA. The credit is allowed with respect to the taxpayer's Montana income tax liability determined for the taxable year in which the net income from contracts subject to the gross receipts tax is reported. If the taxpayer reports income from contracts on a percentage of completion basis, the credit must be allocated accordingly. The amount of credit allowable is the net public contractor's gross receipts tax (after personal property tax credit) actually imposed and paid by the taxpayer but not in excess of the taxpayer's Montana income tax liability. Any excess credit may be carried forward for up to five taxable periods.

(2) In the event the public contractor's gross receipts tax is paid by a partnership, S corporation, limited liability company, or limited liability partnership, the members, partners, or shareholders are entitled to the credit for the tax as the respective interests appears.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-50-205, 15-50-206, 15-50-207, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD and TRANS, from ARM 42.15.503, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2008 MAR p. 63, Eff. 1/18/08; AMD, 2010 MAR p. 1209, Eff. 5/14/10.

Mont. Admin. R. 42.4.3103 Credit for Contractor's Gross Receipts Tax - Corporation Income Tax

(1) A direct credit against the tax is allowed for "public contractor's gross receipts tax" paid pursuant to the provisions of 15-50-205 and 15-50-206, MCA. The credit is allowed with respect to the corporation's Montana corporate income tax liability determined for the taxable period within which the net income from contracts subject to the gross receipts tax is reported. If the corporation reports its income from contracts on a percentage of completion basis, the credit must be allocated accordingly.

(2) The amount of credit allowable is the net public contractor's gross receipts tax (after personal property tax credit) actually imposed against and paid by the corporation but not in excess of its Montana corporate income tax liability. The credit is allowed without regard to the fact that the public contractor's gross receipts tax is an allowable deduction in determining net income subject to the Montana corporate income tax.

(3) In the event the public contractor's gross receipts tax is paid by a joint venture or a partnership, the members thereof shall be entitled to the credit for the tax as their respective interests appear.

(4) If the public contractor's gross receipts tax is paid by an S corporation, the credit must be attributed to shareholders using the same proportion used to report the corporation's income or loss for Montana income tax purposes.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-50-207, MCA
History: Eff. 12/31/72; AMD, 2000 MAR p. 1346, Eff. 5/26/00; TRANS, from ARM 42.23.501, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2008 MAR p. 63, Eff. 1/18/08; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2178, Eff. 9/19/14.

Subchapter 42.4.32 Individual and Corporation - Qualified Research Credit

Mont. Admin. R. 42.4.3202 Credit for Increasing Research Activities

(1) A credit for increases in qualified research expenses and basic research payments that occurred prior to January 1, 2011, is allowed to a qualified corporation, an individual, a small business corporation, a partnership, a limited liability partnership, or a limited liability company. Except as specifically limited by 15-31-150, MCA, (2017) this credit is determined in accordance with 26 USC 41 as that section read on July 1, 1996.

(2) For tax years beginning after December 31, 2010, no current year credit may be claimed. Only unused amounts available as a carry forward under 15-31-150, MCA, may be claimed for the 15 succeeding tax years. The credit can be claimed by including a detailed schedule of the credit carryforward when the return is filed.

History

Authorizing statute(s): 15-30-2620, 15-31-150, 15-31-501, MCA
Implementing statute(s): 15-30-2358, 15-31-150, MCA
History: NEW, 2005 MAR p. 164, Eff. 1/28/05; AMD, 2010 MAR p. 1209, Eff. 5/14/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.3203 Information Required of a Multistate Business Claiming a Credit for Increasing Research Activities

(1) A taxpayer claiming a credit for increasing research activities who has income from business activity that is taxable both within and outside of this state shall submit a by-state breakdown of:

(a) gross sales less returns and allowances that conform to the requirements of 15-31-311 , MCA;

(b) qualified research expenses as defined in 15-31-150 , MCA;

(d) wages as defined in 15-31-150 , MCA.

History

Authorizing statute(s): 15-31-150, 15-31-501, MCA
Implementing statute(s): 15-31-150, MCA
History: NEW, 2005 MAR p. 164, Eff. 1/28/05.

Authorizing statute(s): 15-31-911, MCA
Implementing statute(s): 15-30-2101, 15-31-906, 15-31-907, 15-31-908, MCA
History: NEW, 2006 MAR p. 1960, Eff. 8/11/06; AMD, 2010 MAR p. 1209, Eff. 5/14/10; REP, 2017 MAR p. 2095, Eff. 11/10/17.

Subchapter 42.4.34 Montana Economic Development Industry Advancement Act (MEDIAA) Tax Credits

Mont. Admin. R. 42.4.3401 Definitions

The following definitions apply to terms used in this subchapter:

(1) "Credit base" means the qualified production expenditures base or compensation base used to calculate media production or postproduction tax credits.

(2) "Credit year" means the calendar year allocated to a tax credit.

(3) "Crew member" means a person hired by a production company or a hired production company, including production staff members, that is not an actor, director, producer, or writer, and who is directly participating in a state-certified production. An individual who receives compensation that is less than Montana minimum wage as described in 39-3-409, MCA, is not a crew member.

(4) "Employee" means the same as in 15-30-2501, MCA, and for purposes of these rules also includes an owner, partner, shareholder, or member of a loan-out company to the extent the individual performed personal services on behalf of a loan-out company.

(5) "Hired production company" means a company, including a loan-out company, hired to undertake production functions that are directly related to principal photography on behalf of a production company. A hired production company agrees to provide the production company with all necessary information and documentation for the calculation of media production or media postproduction tax credits. A hired production company does not include a travel agency, travel company, insurance agency, lodging service, or equipment rental service.

(6) "In-studio facility and equipment," for the purpose of claiming the additional 10 percent credit under 15-31-1007(3)(b)(vi), MCA, means:

(a) a permanent, enclosed building or structure that a production company rents for a "qualified production activity," as defined under 15-31-1003(16)(a), MCA; and

(b) equipment (i.e., personal property) that a production company rents for a "qualified production activity," as defined under 15-31-1003(16)(a), MCA.

The facility must not be used exclusively for storage and the equipment must be provided by the party renting the facility.

(7) "Montana insurance agency" means an insurance company maintaining a permanent place of business in Montana that pays the Montana premium tax and meets the criteria as an authorized insurer, as provided in 33-2-705(4), MCA.

(8) "Montana office" means the principal place of business of the production company claiming the media production tax credit.

(9) "Montana travel agency" means an entity registered to do business in Montana as a travel agency and maintains a permanent place of business in the state.

(10) "Multi-year production" means a state-certified production that has principal photography occurring over two or more tax periods.

(11) "Permanent place of business in Montana" means a physical presence in Montana through which a business's activity is conducted. Non-exhaustive examples of permanent places of business in Montana are: an office, factory, store, workshop, warehouse, or similar commercial space. Further, a digital-only business presence, such as the operation of a computer server, does not meet the necessary level of physical presence for these rules.

(12) "Personal service company" means a personal service corporation, as defined in IRC 269A(b), or any other entity meeting the principal activity and the ownership requirements of IRC 269A(b), and also includes a sole proprietorship or an individual being paid as an independent contractor.

(13) "Production company" means the same as provided in 15-31-1003, MCA, and for the purposes of these rules applies to an individual; a disregarded entity, a C corporation, or an S corporation, defined in ARM 42.2.304, including any affiliates required to submit a combined report under ARM 42.26.204, or in a consolidated return under 15-31-141, MCA; a partnership; an estate; or a trust. The production company must maintain a Montana office as provided in

15-30-1004(2)(b), MCA, for the duration of the production and must file a Montana income tax return, as required under Title 15, MCA, for the tax years it directly or indirectly incurs the expenses giving rise to the media production tax credit.

(14) "Series interim production period" means the period of time between two state-certified productions of the same production company.

(15) "Unique credit reference number (UCRN)" means the reference number generated by the department associated with a valid tax credit amount for a given credit year.

(16) "Wages" means the same as provided in 15-30-2501, MCA.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3402 Media Production Tax Credits - Determination of Credit Base

(1) The media production tax credit is the sum of one or more of the production tax credits provided under 15-31-1007, MCA. The basis for each tax credit is determined separately.

(a) Production expenditures, as defined in 15-31-1003, MCA, include expenditures incurred by a production company or a hired production company, including preproduction expenses. Production expenditures paid to an entity which is also a loan-out company must be segregated from personal services as a separate item of expense. Production expenditures paid to another company, which is not a hired production company or a loan-out company, may be included regardless of whether the expenditures include compensation. The basis of an additional tax credit as provided in 15-31-1007(3)(b)(v) through (vii), MCA, may include the same expenditure used under 15-31-1007(3)(a)(i), MCA.

(b) Compensation, as described in 15-31-1003(3), MCA, can only be used in one of the credits provided in 15-31-1007(3)(b)(i) through (iv), MCA, and includes the portion of a payment to a loan-out company for personal services. Compensation incurred in Montana within six months of state certification of the production may be included.

(c) Payments to a loan-out company cannot be included in any credit base if the production company, its affiliate, or hired production company did not pay withholding on the compensation portion, as provided in 15-31-1003(3), MCA, and ARM 42.4.3403.

(2) If a production company or hired production company is organized as a corporation and files a combined report under ARM 42.26.204, or files a consolidated return under 15-31-141, MCA, the company may aggregate the production expenditures and compensation of its affiliates or subsidiaries in its credit base. A production company may not aggregate expenses incurred from entities in which they own an interest - including partnerships - unless the entity is disregarded for federal tax purposes under CFR 301.7701-1, 301.7701-3, and 301.7701-5, or the entity is a hired production company. A production company must disclose to the department the names and federal identification numbers of all disregarded entities, affiliates, and hired production companies for each category of expenses included in the credit base. No tax credits shall be allowed for expenses incurred by an undisclosed hired production company.

(3) To be included in the base investment and in the credit base, production expenditures and compensation must directly relate to a state-certified production's qualified expenditures.

(4) Production expenditures representing the cost of tangible personal property used in a state-certified production in Montana may be included under the following conditions. For these purposes, "used in a state-certified production" means a production physically located in Montana during principal photography, but not during any series interim production period.

(a) The cost of acquiring personal property with a useful life of less than a year through a vendor that has a permanent place of business in Montana may be included in qualified expenditures. Personal property acquired through a vendor that acts like a conduit to enable purchases that would otherwise not qualify as an expenditure incurred in Montana shall not qualify as a production expenditure. All other costs for the use of personal property with a useful life of less than one year shall not qualify as a production expenditure.

(b) If the personal property has a useful life of more than one year, production expenditures are allowed for the lesser of the depreciation cost taken on the production company's federal income tax return for the tax year or tax years when principal photography occurs, or the yearly depreciation calculated using the straight-line method multiplied by the number of days the personal property was used in the state-certified production divided by 365.

(5) When a production company owns or leases vehicles and uses the optional standard mileage rate to account for transportation costs in lieu of actual costs and depreciation on their income tax return, then the same method is used for the inclusion of such costs in production expenditures. Regardless of the method used, miles or distance traveled must be in Montana - even if the out-of-state destination is part of the same production - and is directly related to the

state-certified production.

(6) Production expenditures for services not included in compensation may be included in production expenditures as follows.

(a) Equipment rentals, including the cost of placing the equipment in service, must be made through a vendor that has a permanent place of business in Montana. All other rental equipment or services do not qualify as production expenditures.

(b) Costs directly related to the manufacturing, assembly, or alteration of costumes, wardrobe, or accessories completed in Montana. Costs for out-of-state services provided shall not be included - even if the products are being shipped or transported to Montana.

(c) Shipping or transportation costs for equipment used in a state-certified production for transport between an original storage location and the Montana production location only; and only when the transportation service provider maintains a permanent place of business in Montana. All other shipping or transportation costs may not be included.

(d) Cost of airfare purchased through a Montana travel agency for employees to the extent that the purpose of the travel is directly related to the state-certified production. Airfare purchased to attend to business that is not related to the

state-certified production, airfare that is not related to the state-certified production, airfare for personal reasons, and airfare not purchased through a Montana travel agency shall not be included - even if directly related to a state-certified production.

(e) Insurance purchased through a Montana insurance agency for any tangible personal property or real property in Montana, or for an activity directly related to the state-certified production. If the insurance pertains to a combination of state-certified production and nonstate-certified production purposes, costs that may be included are expenses incurred in the tax year multiplied by the number of days used in the state-certified production divided by the total number of days for the insurance coverage in the tax period.

(f) Per diem or actual cost for meals and lodging as set forth by the United States General Services Administration to the extent the per diem can be taken as a business deduction on the income tax return of the production company, its affiliate, or hired company.

(g) The cost of lodging or housing paid in Montana to accommodate crew members, employees, actors, directors, writers, and producers. Rental housing must be substantiated with a copy of the signed lease or rental agreement identifying the name and address of the landlord, the address of the rental, the stated term of the rental, and the rental amount. The cost of lodging or housing in Montana to accommodate individuals involved directly or indirectly in the marketing function of the state-certified production shall not be included.

(h) Entertainment expenses shall not be included.

(7) Preproduction expenditures may be included:

(a) in the first tax year's expenditures if they are attributable to production expenditures and compensation incurred no more than six months prior to production certification by the Montana Department of Commerce.

(b) in the production expenditures of the second state-certified production for series interim production period. Series interim production expenditures include only the cost of safe storage of sets and equipment and do not include the cost recovery of stored material.

(8) Compensation paid to crew members, actors, writers, producers, and directors who are employees of the production company, one of its affiliates, or a hired company for personal services rendered in a state-certified production must conform with the applicable individual income tax and estimated tax and withholding requirements provided in 15-30-2501, et. seq., MCA, and the department's administrative rules, to be eligible for inclusion in the base investment or the compensation credit base.

(9) The residency status of crew members on their first day of work in a

state-certified production must be reported to the department on a department form. The residency status on the first day of work of an employee on a state-certified production determines whether the production company may include the compensation paid to the employee in the credit base for resident crew members or nonresident crew members.

(10) Fringe benefits paid directly by the production company, one of its affiliates, or a hired production company may be included in compensation if they are directly related to the personal services performed in a state-certified production. Fringe benefits corresponding to compensation provided by a loan-out company may be included in a compensation credit base only if the withholding in ARM 42.4.3403 was applied to the compensation. Fringe benefits may be included as compensation without being subject to the loan-out withholding requirement. Fringe benefits such as contributions to qualified plans or other expenses incurred under a qualified deferred compensation plan paid for the benefit of employees may be included based on the annual total contributions or deductible expenses, for tax purposes, multiplied by the number of days of personal services rendered in a state-certified production over a given year.

(11) Production expenditures and compensation included in a credit base, whether incurred by the production company, an affiliate, or a hired company, must be added as additional income to federal adjusted income in calculating the Montana net income of the production company that files a claim for the media production tax credit. This inclusion must be made in the tax year the production expenditures were incurred and compensation was paid.

(12) If production expenditures or compensation are excluded from the base investment or a credit base after the production company files its income tax return, the production company may amend its return or informational return to make an adjustment to the addition of income and claim a refund within one year of the final exclusion determination. If the production company makes an election as provided in ARM 42.4.3408, this addition to federal adjusted income must be made on the return of the second tax year that is part of the election.

(13) The inclusion of production expenditures in Montana net income does not create any change in depreciation or amortization recovery schedules for future tax years.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3403 Required Income Tax Withholding on Compensation Paid to a Loan-Out Company

(1) In accordance with 15-31-1003(3)(c), MCA, and to be considered for inclusion in a production company's compensation base for a state-certified production, all production company personal services payments to any loan-out company must withhold Montana income taxes at the rate of 6.9%. The production company or its agent, affiliate, or hired production company may perform the act of withholding. The income tax withholding applies to payments made to a loan-out company that is related to personal services performed during a calendar year and must be paid by January 31 of the following year.

(2) The income tax withholding must be calculated for an employee of the loan-out company using the allocable amount of time the employee performed personal services in Montana.

(3) When the loan-out company payment involves more than one employee, the payment must be divided equally between all employees based on the total number of days of personal services rendered unless otherwise specified in the contract between the production company and the loan-out company.

(4) An allocation for the loan-out company payment attributable to the personal services rendered in Montana must be determined by making the following deductions, where applicable, from the total payment made to the loan-out company:

(a) personal services performed in another state;

(b) personal services performed in Montana for a production that is not a state-certified production;

(c) fringe benefits paid directly by the production company, its agent, its affiliate, or its hired production company; and

(d) payments not related to personal services such as but not limited to:

(i) rental of tangible personal property;

(ii) residuals or profit-sharing payments; or

(iii) royalty and image rights.

(5) A production company, hired production company, or their agent must electronically file the loan-out withholding report with the department using the department's online portal and according to department procedures. When a hired production company contracts with a loan-out company, all the withholding payments must be aggregated under the account of the production company.

(6) A loan-out company withholding report is due with payment of the withholding tax by January 31 of the calendar year following the year an employee of the loan-out company provided services to the hiring production company. If the withholding tax is not paid by January 31 of the calendar year following the year the hiring production company made a payment to the loan-out company which is included in a compensation base of a state-certified production, then the department shall apply penalties and interest, as provided in 15-1-216, MCA.

(7) Upon filing the loan-out company income tax withholding report and withholding tax payment with the department, the production company must issue a withholding certificate, for each employee to whom withholding tax is allocable on the report.

(a) Employees of a loan-out company must receive their withholding certificates no later than February 28 of the year following the calendar year the personal services were performed. The withholding certificate must include the name and address of the employee, the certification number of the production, the year for which the withholding applies, and the amount of withholding that may be claimed as a tax credit against Montana individual income tax.

(b) For audit purposes, an employee must keep the withholding certificate for a minimum of three years following the date of filing a Montana individual income tax return.

(8) An employee may claim the reported income tax withheld as a refundable tax credit by filing a Montana individual income tax return. The refund amount claimed cannot be more than the amount of withholding paid and attributed to the employee on the loan-out company withholding report, even if the certificate shows a greater amount. In the event of an error on an employee's withholding certificate, the employee and their employer must resolve the error and the employee must receive a corrected certificate.

(9) A loan-out company may reduce its wage withholding payment pursuant to 15-30-2502, MCA, and related rules, on wages paid to its employees that rendered services to a state-certified production by a maximum of the amount resulting from the calculations described in this rule. If the loan-out income tax withholding is not paid to the department, the reduction of wage withholding based on prospective qualified compensation does not relieve the loan-out company from its obligations under 15-30-2502, MCA, nor the employee from their obligation under 15-30-2512, MCA, and related penalties and interest.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3406 Base Investment Requirement; Election to Combine Nonqualifying Productions

(1) If a production company initiates more than one state-certified production in a single tax year and one or more of them do not meet the base investment requirement, as provided in 15-31-1005(1), MCA, the production company may elect to combine nonqualifying productions occurring in the same tax year to qualify all of the combined state-certified productions for the base investment requirement. This election is made on the media production tax credit application. When this election is made, all production expenditures must be combined into the base investment as if a single production had been certified; and the limitations to the media production tax credit apply only once on the total amount of base investment and credit base. If the production company claims the Montana screen credit under 15-31-1007(3)(b)(viii), MCA, on a base investment of combined state-certified productions, the screen tax credit provided under 15-31-1004(7), MCA, must appear on all of the media resulting from the combined productions. This production election is made prior to the election stated in ARM 42.4.3408(2).

(2) When a production company elects to combine nonqualifying productions under this rule, the production company will receive only one UCRN for the combined state-certified productions, per credit year.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3407 Tax Credit for Postproduction Wages – Credit Base

(1) The credit base for the postproduction tax credit equals the sum of hourly wages directly incurred in Montana for state-certified postproduction activities during a tax year. Postproduction activities related to a state-certified production begin on the day following the last day of principal photography in Montana. Postproduction activities performed in Montana for photography performed outside Montana qualify regardless of the date of principal photography.

(2) When an employee is not paid an hourly wage, the postproduction company must provide an hourly cost of the employee compensation based on a regular work week. No wages may be included in the postproduction credit base if the same wages are already included in a production credit base.

(3) The postproduction tax credit cannot exceed the total amount of compensation paid to postproduction company employees for personal services performed in Montana. For the purpose of this rule, compensation paid includes compensation paid in the first month following the tax year in which the wages included in the postproduction credit base were incurred.

(4) To be included in the postproduction credit base, postproduction wages must be directly related to a state-certified production. A wage is directly related to a qualified postproduction activity when the personal services rendered by the employee are necessary for the completion of the postproduction activity, as defined under 15-31-1003(13), MCA. Administrative activities of the postproduction company such as secretarial, accounting, human resources, or marketing services are not directly related to qualified postproduction activities.

(5) The postproduction company must maintain current and ongoing paper or electronic employee timekeeping records of the hours spent by an employee on the state-certified postproduction activity. If no such records are kept, the employee wages shall be excluded from the postproduction credit base. Timekeeping records must contain the name of the employee, job title or work function, days and number of hours worked each day on a state-certified production, and the work location.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3408 Credit Year

(1) The credit year of a media production or postproduction tax credit is the calendar year in which the tax year of the production company or the postproduction company applying for the tax credit according to ARM 42.4.3411, or ARM 42.4.3412 begins, except when:

(a) The department receives the submission of costs, required under

15-31-1005, MCA, more than 60 calendar days after the end of principal photography or after the end of the tax year if the production is a multi-year production. In this case, the credit year is the calendar year following the calendar year in which the tax year of the production company or the postproduction company incurring the expenses begins.

(b) A production company makes an election as described in (2), in which case the credit year may not be earlier than the calendar year in which the second tax year begins; or

(c) The tax credit limit provided in 15-31-1010, MCA, is reached and the tax credit is allocated to a subsequent credit year.

(2) Applications in ARM 42.4.3411 and ARM 42.4.3412 must be made for the tax year when the qualifying expenditures were incurred and qualifying compensation was paid. When a production company undertakes a state-certified production overlapping two tax years, the production company may elect to apply the entire base investment and credit base from the first tax year to the second tax year. When the production company makes this election:

(a) the election in ARM 42.4.3406 must be applied before any election under this section is made.

(b) the provision in (1)(a) applies based on the second tax year.

(c) a single media production tax credit application is required. This election must be made on a media production tax credit application.

(d) no UCRN will be issued for the first tax year.

(3) For the purpose of providing additional credit year guidance to production companies, the department provides the following example:

Example: A production company has two separate state-certified productions occurring in calendar year 2021, but with principal photography for the second production scheduled to end in calendar year 2022. If the base investment for the first production does not qualify for the media production tax credit, then the production company may elect not to file a media production tax credit application and, alternately, combine both productions into one multi-year state-certified production, as provided in ARM 42.4.3406. In this case, the production company combines its production expenditures incurred and compensation paid in 2021 and 2022, makes the election as provided in ARM 42.4.3408, and submits one media production tax credit application to the department for both productions. The application is filed 61 days after the conclusion of the second production's principal photography. The result is that the entire tax credit may be reserved for tax year 2023, at the earliest, as long as the overall calendar year credit limitation in 15-31-1010, MCA, is not reached.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3411 Media Production Tax Credit Application

(1) To reserve a media production tax credit, a production company must submit a media production tax credit application (application) on a form provided by the department, including all supporting documentation provided in this rule, with payment of the fee required under 15-31-1005, MCA. The department will not consider an application "filed" until:

(a) the production company, including its affiliates if the production company is a C corporation, in the state-certified production complies with 15-31-1003(10), MCA;

(b) the production company has paid the required fee; and

(2) The fee required under 15-31-1005, MCA, is due, in full, with each new application. Any submission of an application associated with another state-certified production, even for the same tax year, constitutes a new application and is subject to another fee. Providing additional documentation after an application is submitted to complete a department request does not constitute a new application.

(3) The application must be filed by the date provided in 15-30-2604, MCA, following the end of the tax year the expenditures were incurred and compensation was paid, or the following tax year if an election pursuant to ARM 42.4.3408(2) is made. For the purpose of this section, production expenditures and compensation incurred between July 1, 2019 and the first day of the tax year beginning in 2020 are deemed to have occurred in tax year beginning in 2020.

(4) Production companies with a multi-year production must file the media production tax credit application and pay the required fee for each tax year any base investment expenses are incurred, except:

(a) for tax years beginning after June 30, 2019, but before January 1, 2020, which must be filed with the media production tax credit application pertaining to expenditures incurred and compensation paid in tax years beginning in 2020; or

(b) if an election pursuant to ARM 42.4.3408(1) or (2) is made. If so, the production company must pay the required fee for each base investment reported on the application before any election is made.

(5) An application is considered "submitted" on the day the department receives all of the information, documents, and fee described in (1) from the applicant submitted via the department's online portal, and according to department procedures. A "complete" application includes:

(a) a submission of costs, as provided in 15-31-1005, MCA, which includes a list of all the affiliates or hired production companies that incurred the qualifying production expenditures and compensation paid included in the production credit base.

(b) a production verification report, as required by 15-31-1006, MCA.

(c) detailed information on production expenditures incurred in Montana and directly used for the qualified production activity, including:

(i) the total expenditures incurred for each category of production expenditures listed in 15-31-1003(11)(a), MCA;

(ii) all receipts for expenses, in order, using account identification numbers provided by the department in the submission of costs and presented by each account in decreasing amounts of expenditures. All the receipts must include the account to which they relate. Additionally, receipts related to payments made to a Montana college or university, expenses incurred towards an in-studio facility in Montana for 20 days or more, and expenses incurred in underserved areas, must be clearly identified with a notation of "college," "in studio," or "underserved" on the first page of the receipt.

(iii) copies of all the call sheets related to compensation of employees whether they are employees of the production company or a loan-out company.

(iv) detailed amounts of withholding applied to loan-out company employees as listed on the loan-out company withholding report.

(v) copies of contracts with any loan-out companies pertaining to any inclusion of compensation in the base investment and production credit base.

(vi) copies of any agreements with any loan-out company employees pertaining to their personal services performed on behalf of the loan-out company.

(vii) copies of department Form MEDIA-COMP referencing the state-certified production and the status of each employee of a production company, hired production company, and loan-out company.

(6) Any application or submission of costs information presented to the department in a disorganized or unsystematic manner, or where source documents, receipts, and other support documents are provided in an unprepared format, will be deemed "insufficient for review" by the department and will be returned to the production company. In this case, the statutory fee will not be refunded. However, a subsequent, acceptable submission of costs will not require a second payment of the fee.

(7) If the department accepts the application for review but determines that additional documentation is necessary to correct or complete the application, it will send one written request for additional information to the applicant, or its designated, authorized representative.

(a) The department's correspondence will list the deficiencies of the items required under (5) and provide the applicant or its authorized representative 30 days to cure all deficiencies.

(b) Failure by the applicant or its authorized representative to provide the requested items within the time prescribed in (7)(a) may result in the denial of the application and the return of all application materials to the applicant. In this case, the statutory fee will not be refunded by the department.

(8) At its discretion, but not earlier than the 30-day period described in (7)(a), the department may adjust the amount of media production tax credit or base investment, or both, if the applicant is unable to provide records substantiating the inclusion of the expense in the base investment or as a qualifying expense for the calculation of the media production tax credit. Any downward adjustment to a base investment by the department is not considered a denial or a return of the application or submission of costs. In this case, the statutory fee will not be refunded by the department.

(9) The production company is responsible for keeping records or substantiating evidence of all production expenditures and compensation payments. Copies of the media production tax credit documentation organized in the same manner as described in (5) must be provided to the certified public accountant preparing the production verification report, required under 15-31-1006, MCA.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3412 Postproduction Tax Credit Application

(1) To reserve a postproduction tax credit, the postproduction company must submit a media postproduction tax credit application to the department, using the department's online portal and according to department procedures, each tax year the postproduction company is certified by the Montana Department of Commerce, including all supporting documentation provided in this rule, with payment of the statutory fee required under 15-31-1005, MCA. The media postproduction tax credit application will not be considered "filed" until:

(a) the postproduction company, including its affiliates if the postproduction company is a C corporation, taking part in the state-certified postproduction complies with 15-31-1003(8), MCA;

(b) the postproduction company has paid the required fee; and

(2) The fee required under 15-31-1005, MCA, is due with each new submission of the postproduction tax credit application.

(3) The postproduction tax credit application must be filed by the 15th day of the fourth month following the end of the tax year the qualified wages were incurred. For the purpose of this section, qualified wages incurred from July 1, 2019 until the first day of the tax year beginning in 2020 are deemed to have occurred in the tax year beginning in 2020.

(4) A postproduction tax credit application is considered "submitted" when the following documentation is received by the department:

(a) the items described in (1) and (2);

(b) the verification report conforming to the requirements under 15-31-1006, MCA;

(d) a detailed listing of employee names, individual tax identification numbers, Montana wages paid, and the nature of the personal services rendered by the employee.

(5) Any application or submission of costs information presented to the department in a disorganized or unsystematic manner, or where source documents, receipts, and other support documents are provided in an unprepared format, will be deemed "insufficient for review" by the department and will be returned to the applicant, or its designated, authorized representative. In this case, the statutory fee will not be refunded. However, a subsequent, acceptable submission of costs will not require a second payment of the fee.

(6) If the department accepts the application for review but determines that additional documentation is necessary to correct or complete the application, it will send one written request for additional information to the applicant, or its designated, authorized representative.

(a) The department's correspondence will list the deficiencies of the items required under (4) and provide the applicant or its authorized representative 30 days to cure all deficiencies.

(b) Failure by the applicant or its authorized representative to provide the requested items within the time prescribed in (6)(a) may result in the denial of the application and the return of all application materials to the applicant. In this case, the statutory fee will not be refunded by the department.

(7) The department may adjust the amount of tax credit reported on the application if the claimant is not able to provide records substantiating the inclusion of the wages in the credit base before the closure of the verification period, but not earlier than 30 days after a department's information request. Any downward adjustment to a base investment by the department is not considered a denial or a return of the submission costs. The statutory fee is not refundable.

(8) The postproduction company is responsible for keeping records of all substantiating evidence of payment of compensation. Copies of the tax credit documentation, organized in the same manner as described in (5), must be provided to the certified public accountant verifying the costs and the calculation of the tax credit.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3413 Certified Public Accountant Verification Report

(1) For the purpose of complying with 15-31-1006(3)(a), MCA, the verification report must include sufficient detail for the department to verify the accuracy of the expenditures and compensation used in the computation of any production or postproduction credit base or base investment, as described in this subchapter, and that the application is free from material misstatements.

(2) The verification report described in 15-31-1006, MCA, must be issued by a certified public accountant (CPA) authorized to practice in Montana who must be unrelated to the production or postproduction company filing the media credit application to which the verification report relates.

(a) The CPA certification that a person is unrelated, as required under

15-31-1006(2)(a), MCA, must also include the disclosure of any transactions for which the CPA has been retained as a consultant or an intermediary pertaining to any future transfers of the tax credit; including name and address of the parties.

(b) "Unrelated" means that the CPA is not:

(i) an employee of the production or postproduction company;

(ii) a holder of an interest directly or indirectly in the production or postproduction company. An indirect interest is an interest held by a spouse, lineal ascendant, lineal descendant, siblings, including step-brothers or step-sisters, step-children and step-grandchildren;

(iii) an employee of a firm, if one of the owners or associates of the firm holds direct or indirect interest in the production or postproduction company; or

(iv) a recipient of compensation for the verification of the costs that is not commensurate with industry standards.

(3) The verification report must be submitted to the department through its online portal and must meet the requirements under 15-31-1006, MCA.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3414 Overall Calendar Year Limitation

(1) The tax credit limit in 15-31-1010, MCA, applies to the aggregate amount of production and postproduction tax credits issued in Montana for a credit year.

(2) The aggregate amount of tax credit reserved is determined in the following order:

(a) A production or postproduction company reserves the tax credit for a credit year as determined in ARM 42.4.3408.

(b) A credit is reserved on the date a complete media tax credit application is filed based on the amount requested on the application.

(c) Amounts reserved are aggregated on a "first-come, first-served" basis for each tax credit year until the tax credit limit amount in 15-31-1010, MCA, is reached. If two or more production companies file their media production tax credit application simultaneously, or if tax credit reservations are postponed on the same day to a credit year according to (d), priority will be given to the production company with the lesser base investment.

(d) Any amount reserved in excess of the overall limitation amount for a given credit year must be included in the aggregate credit amount of the earliest following credit year for which the total amount of credit reserved is less than the applicable overall limitation amount for that year. If, after review by the department, a reserved credit amount for a given credit year is not issued, the difference between the total credit amount reserved and the amount issued may only be used for credit amounts reserved but not yet issued on a first-come, first-served basis.

(e) Once a credit amount is verified and a final determination is reached, the amount of tax credit reserved becomes issued for the credit year allocated according to this rule.

(f) The credit year of a media production tax credit issued cannot be changed.

(g) The department will provide contemporaneous information to the Montana Department of Commerce to update the amount of tax credit reserved on its website.

(3) To conform with 15-31-1010(2)(b), MCA, when a credit year for a certain tax credit amount is postponed one year because the total reserved amount of tax credit exceeds the overall limitation amount for that calendar year, the carryover period provided in ARM 42.4.3418 is reduced by one year. This reduction must be indicated in the UCRN associated with the tax credit as described in ARM 42.4.3417. Once the carryover period is reduced to zero because the reserved tax credit was in excess of the tax credit limitation amount for five consecutive years, any amount of reserved tax credit in excess of the total credit amount for the fifth year following the initial credit year of media tax credit application will be denied.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3417 Validation of Tax Credit - Appeal Rights

(1) For each media production or postproduction tax credit application, the department must review and validate tax credit amounts that are allowed to be claimed against Montana income tax liability. Each tax credit amount validated for each

(2) If, upon the review of the production media tax credit application, the department adjusts the tax credit amount claimed and reserved, the department must provide the applicant with a written justification of the reasons for any adjustment. The applicant has 30 days from the date of the adjustment letter to accept or appeal the department's adjustment, as provided under 15-1-216, MCA. Once a final determination is made, the department will issue the appropriate tax credit as provided in (1).

(3) If the applicant does not appeal the department's adjustment, the adjustment becomes the department's final determination for the tax credit amount. The applicant may inform the department at any time that it accepts the department's determination.

(4) Once a final determination is reached, in addition to requirements in

15-31-1005(3), MCA, the department will provide the Montana Department of Commerce with a letter providing:

(a) the amount of base investment verified by the department;

(b) the credit base retained;

(d) a first credit year reference in which the tax credit can be claimed; and

(e) the ending credit year, which is the last credit year the tax credit may be claimed on an income tax return.

(5) No transfer of a tax credit reserved is allowed until the claimant has received a UCRN related to an amount of a tax credit.

state-certified production must be assigned a UCRN. If a tax credit amount is allocated to several credit years, a UCRN must be issued for each credit year. The tax credit is considered issued on the date the UCRN is issued to the applicant.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3418 Claim of Tax Credits on an Income Tax Return

(1) A valid media production or postproduction tax credit can be claimed against Montana income tax liability at the earliest on an income tax return with a tax year beginning in the credit year indicated in the UCRN.

(2) A valid media production tax credit can be claimed against Montana income tax liability regardless of whether the taxpayer has directly or indirectly incurred the expenses relating to the tax credit.

(3) If a valid media production or postproduction tax credit is claimed by a grantor trust, the tax credit must flow entirely to the grantor. If it is claimed by a non-grantor trust or an estate, the tax credit must be allocated to the trust or estate in proportion of the Montana adjusted total income reduced by the Montana income distribution deduction over the Montana adjusted total income.

(4) If a valid tax credit is claimed by an S corporation, the tax credit must be distributed based on each shareholder's distributive share of income or loss.

(5) If a valid tax credit is claimed by a partnership, the tax credit must be distributed based on each partner's distributive share of income or loss, unless a special allocation applies. In order to comply with 15-31-1007(7)(c), MCA, and 15-31-1009(6)(c), MCA, special allocations of production or postproduction tax credit in a partnership agreement are not allowed unless the capital account of each partner receiving a Montana Schedule K-1 is adjusted in proportion of the amount of tax credit received.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3419 Carryover Period

(1) If a taxpayer has not claimed or transferred the media production tax credit or claimed the postproduction tax credit on or before the tax year beginning in the ending credit year indicated on the UCRN, the tax credit is no longer available to be used against income tax liabilities. Each year, a taxpayer must include on their income tax return:

(a) the amount of tax credit available for current and each preceding credit year;

(b) the amount of tax credit that was available for each tax year and transferred during the tax year; and

(2) Tax credits are used on a "first-in, first-out" basis.

(3) Tax years of less than 12 months count as one tax year.

(4) The carryover amount of media production tax credit is any amount in excess of income tax liability after deduction of all other nonrefundable tax credits, including the media postproduction tax credit.

(5) Owners of a pass-through entity may claim the tax credit in the tax year they include their distributive share of income, loss, deduction, or tax credit reported on the Montana Schedule K-1.

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Mont. Admin. R. 42.4.3420 Transfer of Production Tax Credit

(1) A taxpayer allowed to claim the production tax credit may elect to transfer any unused tax credit for a minimum of 85% of its value. The transferor must notify the department of the transfer and pay a transfer fee equal to two percent of the value of the tax credit no later than 30 days following the transfer of the tax credit. Time computation for deadlines falling on weekends or holidays shall conform to 1-1-307, MCA, which provides any acts required to be done may be performed upon the next business day with the same effect as if it had been performed upon the day appointed.

(2) The transfer notification must be made on a form provided by the department and include:

(a) All UCRNs associated with the tax credits transferred;

(b) The tax credit balances before and after the transfer for each tax credit associated with a UCRN;

(d) The overall amount of tax credit transferred, and the price paid for each tax credit associated with a UCRN; and

(e) An acknowledgment by the transferee and the transferor that the transfer is valid, and that the transferee may claim the tax credit on a tax return only if the notification required in this rule is filed and the statutory fee is paid.

(3) If a transferor fails to notify the department and pay the fee within the period provided in (1), or before the transferee claims the tax credit on an income tax return, whichever comes first, the transaction does not constitute a valid transfer, and the transferee may not claim the tax credit.

(4) A production tax credit acquired by means of transfer may not be transferred by the transferee until the end of the tax year in which the tax credit was acquired.

(5) The tax credit cannot be sold if the carryover period under ARM 42.4.3419 has expired.

(6) A tax credit purchased in a tax year may be claimed by the transferee on a return pertaining to that tax year or the following years when permitted under ARM 42.4.3419. It may not be carried back to a preceding tax year unless the tax credit is purchased before the due date of the transferee's income or information tax return under Title 15, MCA, in which case the tax credit can be applied against the tax liability of that preceding tax year. For example, an individual may purchase a tax credit before April 15 of Year 2 and apply this tax credit against their individual income tax liability pertaining to Year 1.

(7) The carryover period under ARM 42.4.3419 cannot be reset or suspended due to a transfer or sale of the tax credit. The transferee must determine the number of carryover years left for the tax credit as if it had the ability to claim the tax credit in the tax year beginning in the credit year for which the tax credit was issued and using the same period in which the tax credit was bought. For example, on March 1, 2024, a corporation with a fiscal year beginning June 1, buys a tax credit. The credit year of the tax credit is 2020 with the carry-over ending in 2025. The first tax year the corporation is able to use the tax credit on a return based on its current tax period is the tax year beginning June 1, 2024. The last tax year the corporation can claim the tax credit is the tax year beginning June 1, 2025.

(8) A pass-through entity that is allowed a production tax credit for a tax year, either as a transferee or as a second-tier pass-through entity, must either claim and distribute part or all the tax credit as described in ARM 42.4.3418, or elect to transfer part or all the tax credit on behalf of its owners.

(9) If an owner of a pass-through entity, who is a direct owner or an owner that is holding interest in the pass-through entity through the use of disregarded entities, sells their interest in the pass-through entity on or after the date the pass-through entity has legally received the right to claim a valid tax credit, the sale is deemed to include a transfer of the tax credit to the new owner of the pass-through interest. The transferor of the interest must notify the department and pay the two percent fee as provided in (1) and (2) within 30 days of the sale of the pass-through entity's interest or before the new owner of the pass-through interest claims the tax credit whichever comes first. If the department is not notified and the fee paid timely, the new owner of the pass-through entity's interest may not claim the tax credit. The requirement to sell the tax credit at a minimum of 85% of the tax credit sale value must be assessed using the capital account of the owner without regards to the effect of the tax credit being transferred.

(10) Any capital gain that must be recognized for federal tax purposes resulting from the direct or disguised sale of the tax credit, whether the transfer was validated or not, must be included in Montana net income, including any gain resulting from the transfer occurring through the sale of a pass-through entity interest as described in (9).

History

Authorizing statute(s): 15-31-1012, MCA
Implementing statute(s): 15-1-201, 15-31-1012, MCA
History: NEW, 2020 MAR p. 1638, Eff. 8/29/20.

Subchapter 42.4.41 Alternative Energy Production - Income and Property Tax Incentives for Individuals and Corporations

Mont. Admin. R. 42.4.4101 Alternative Energy Production Credit Definitions (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-32-407, MCA
Implementing statute(s): 15-32-402, 15-32-404, MCA
History: NEW, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.4102 Electrical Generation and Transmission Facility – Qualification and Publication

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-305, 15-31-501, 15-32-407, MCA
Implementing statute(s): 15-24-3001, 15-32-403, 15-35-103, MCA
History: NEW, 2002 MAR p. 2924, Eff. 10/18/02; AMD and TRANS, from ARM 42.4.107, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2010 MAR p. 1407, Eff. 6/11/10.

Mont. Admin. R. 42.4.4103 Electrical Generation and Transmission Facility – Reporting

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-305, 15-31-501, 15-32-407, MCA
Implementing statute(s): 15-24-3001, 15-32-403, 15-35-103, MCA
History: NEW, 2002 MAR p. 2924, Eff. 10/18/02; AMD and TRANS, from ARM 42.4.108, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2010 MAR p. 1407, Eff. 6/11/10.

Mont. Admin. R. 42.4.4104 Electrical Generation and Transmission Facility – Verification

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-305, 15-31-501, 15-32-407, MCA
Implementing statute(s): 15-24-3001, 15-32-403, 15-35-103, MCA
History: NEW, 2002 MAR p. 2924, Eff. 10/18/02; AMD and TRANS, from 42.4.109, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2010 MAR p. 1407, Eff. 6/11/10.

Mont. Admin. R. 42.4.4106 Appeal Rights (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-211, 15-2-302, 15-31-501, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from 42.4.112, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.4107 Commercial Use and Other Requirements for Commercial and Net Metering Systems Eligible for the Income Tax Credit (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, 15-31-501, 15-32-407, MCA
Implementing statute(s): 15-32-402, 15-32-404, 15-32-406, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from ARM 42.4.113, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; AMD, 2013 MAR p. 216, Eff. 2/15/13; AMD, 2014 MAR p. 2178, Eff. 9/19/14; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.4109 Alternative Energy Income Tax Credits for Generation Facilities Located Within Exterior Boundaries of a Montana Indian Reservation - Tribal Employment Agreement (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-32-407 MCA
Implementing statute(s): 15-32-402, 15-32-404, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from ARM 42.4.115, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2006 MAR p. 357, Eff. 2/10/06; AMD, 2010 MAR p. 1407, Eff. 6/11/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.4110 Wind Energy Tax Credits for Generation Facilities Located on School Trust Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-32-407, MCA
Implementing statute(s): 15-31-501, 15-32-403, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from ARM 42.4.116, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2006 MAR p. 357, Eff. 2/10/06.

Mont. Admin. R. 42.4.4111 Deductibility of Impact Fee for Local Government and School Districts

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, 15-31-501, MCA
Implementing statute(s): 15-24-3005, 15-30-111, 15-30-121, 15-31-501, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from 42.4.117, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2010 MAR p. 1407, Eff. 6/11/10.

Mont. Admin. R. 42.4.4112 Records Required - Audit (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, 15-32-407, MCA
Implementing statute(s): 15-32-402, 15-32-404, 15-32-405, 15-32-406, MCA
History: NEW, 2002 MAR p. 2924, Eff. 10/18/02; AMD and TRANS, from ARM 42.4.119, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; REP, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.4.4113 Request for Information

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-30-305, 15-32-407, MCA
Implementing statute(s): 15-24-3001, 15-31-501, 15-32-403, 15-35-103, MCA
History: NEW, 2002 MAR p. 2924, Eff. 10/18/02; AMD and TRANS, from ARM 42.4.120, 2004 MAR p. 1965, Eff. 8/20/04; REP, 2010 MAR p. 1407, Eff. 6/11/10.

Mont. Admin. R. 42.4.4115 Property Tax Exemption for Land Adjacent to Transmission Line Right-of-Way or Easement

(1) The property owner of record, the property owner's agent, or the operator of a transmission line must make application to the Department of Revenue's (department) local county office for an exemption from property taxes for land that is within 660 feet on either side of the midpoint of a transmission line right-of-way or easement. The transmission line must have a design capacity of 30 megavoltamperes or greater, as certified by the Department of Environmental Quality (DEQ), and be constructed after January 1, 2007. Application will be made on a form available from the department's local county office before March 1 of the tax year for which the exemption is sought. The DEQ certification shall be attached to and be part of the application for exemption under this part.

(2) The applicant must provide to the department's local county office, along with the application, a legal description for the property described on the application provided for in (1) and a digitized certificate of survey prepared by a surveyor registered with the Board of Professional Engineers and Professional Land Surveyors provided for in 2-15-1763, MCA, which specifically provides the boundaries of the property listed on the application provided for in (1). The acceptable format for the digitized certificate of survey is an Environmental System Research Institute (ESRI) Shapefile file format in State Plane single zone projection. Shapefiles spatially describe points, polygons, and lines. State Plane refers to the State Plane Coordinate System.

(3) The application will be forwarded to the department's Property Assessment Division (PAD) office in Helena referred to as the "central office." The PAD central office will process the application and determine if the property meets the requirements of exemption.

(4) The central office will issue a letter indicating whether the application for exemption has been granted or denied and provide a copy of the letter to the applicant, the local county office, and the Business and Income Taxes Division.

(5) If the transmission line is either constructed or under construction after January 1 of a tax year and an application for exemption is submitted for the right-of-way or easement by March 1 of that tax year and the property qualifies for the exemption, the exemption will be effective for the whole tax year.

History

Authorizing statute(s): 15-24-3116, MCA
Implementing statute(s): 2-15-1763, 15-6-229, MCA
History: NEW, 2008 MAR p. 811, Eff. 4/25/08; AMD, 2010 MAR p. 1407, Eff. 6/11/10; AMD, 2017 MAR p. 2095, Eff. 11/10/17.

Chapter 42.5 Filing and Remittance

Authorizing statute(s): Sec. 17-4-110, MCA
Implementing statute(s): Sec. 17-4-107, MCA
History: NEW, Eff. 9/5/74; REP, 1990 MAR p. 1712, Eff. 8/31/90.

Subchapter 42.5.2 Electronic Funds and Correspondence

Mont. Admin. R. 42.5.201 Electronic Payment

(1) The department's ability to accept electronic payments is evolving. Taxpayers should check the department's web site at www.revenue.mt.gov to determine which types of electronic payments the department will accept and the electronic submission options available.

(2) A taxpayer with a tax liability of $50,000 or greater must make payment to the department by electronic funds transfer. If a check, draft, or similar paper instrument is received in the amount of $50,000 or greater, it shall constitute nonpayment and be returned to the taxpayer. Applicable late payment penalties and interest shall be applied until such time as the payment is remitted by electronic funds transfer, as required by 15-1-802, MCA.

(3) If the department does not receive the funds submitted via an electronic funds transfer by the payment submission due date, the department shall assess any applicable penalties and interest as required by 15-1-216, MCA.

(4) The following information must be included with any electronic payment:

(a) name and tax identification number of the taxpayer;

(b) type of tax or taxes being paid;

(d) any additional information necessary to process the type of electronic payment being made and to identify the taxpayer and account to which the payment is to be applied.

(5) The department may, in its discretion, allow a taxpayer with a tax liability of $50,000 or greater to submit payment in an alternative form of a check, draft, or similar paper instrument.

(a) Requests for an alternative payment method must be submitted to the department in writing at least 30 days prior to the payment due date and include substantiation in support of the request.

(b) If a taxpayer makes multiple payments to the department within a tax year, the department may approve a single request that will apply to all payments for that tax year.

(c) An approved alternative payment method may be renewed for subsequent tax years if the taxpayer and the request continue to comply with (5).

(6) Alternative payment exception requests may be mailed to the department at P.O. Box 5805 Helena, Montana 59604-5805 or submitted via email to DORCPM@mt.gov.

History

Authorizing statute(s): 15-1-803, MCA
Implementing statute(s): 15-1-216, 15-1-231, 15-1-801, 15-1-802, 15-1-803, 15-30-2510, 30-18-117, 32-6-103, MCA
History: NEW, 1985 MAR p. 1154, Eff. 8/16/85; AMD, 2003 MAR p. 2897, Eff. 12/25/03; AMD, 2010 MAR p. 1995, Eff. 9/10/10; AMD, 2013 MAR p. 222, Eff. 2/15/13; AMD, 2026 MAR, Notice No. 2026-476, Eff. 3/21/26.

Mont. Admin. R. 42.5.202 Electronic Returns and Signatures

(1) The department's ability to accept electronic returns is evolving. Taxpayers should check the department's web site at www.revenue.mt.gov , to determine which types of returns the department will accept electronically and the electronic submission options that are available.

(2) An electronic return is not complete unless all requested information is provided and it is signed by the taxpayer or the taxpayer's authorized representative as provided in this rule.

(3) Providing an electronic signature as part of an electronic filing is the filer's declaration, under the penalty of false swearing, that:

(a) the filer is the taxpayer identified in the return; and

(b) the information in the return is true, correct, and complete.

(4) The department is part of a federal-state joint-filing program that allows taxpayers to electronically file certain federal and state tax returns at the same time. If a taxpayer files an electronic Montana return as part of the federal-state joint-filing program, the taxpayer's federal signature or PIN is considered the taxpayer's signature or PIN on the Montana return.

(5) If the department permits a taxpayer to file a return electronically outside the federal-state joint-filing program, the act of filing the return electronically constitutes the filer's declaration, under the penalty of false swearing, that:

(a) the filer is the taxpayer identified in the return; and

(b) the information in the return is true, correct, and complete, and constitutes the taxpayer's signature.

(6) A return may be made electronically for a taxpayer unable to make the taxpayer's own return by an authorized agent or by a guardian or other person charged with the care of the person or property of the taxpayer as provided in ARM 42.15.303.

(7) The act of electronically filing a return on behalf of a taxpayer constitutes a declaration by the filer, under penalty of false swearing, that the information in the return is true, correct, and complete, and that the person is authorized to act on behalf of the taxpayer.

(8) A return that is submitted electronically is subject to the same filing deadlines as a paper return.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-231, 15-30-2602, 15-30-2620, 30-18-102, 30-18-105, 30-18-106, 30-18-110, 30-18-113, 30-18-117, MCA
History: NEW, 2003 MAR p. 2897, Eff. 12/25/03; AMD, 2010 MAR p. 1995, Eff. 9/10/10; AMD, 2013 MAR p. 222, Eff. 2/15/13.

Mont. Admin. R. 42.5.203 Electronic Communications from the Department

(1) Except where the law requires the department to correspond with a person by traditional mail, any person who has an account with the department (account holder) may elect to receive certain electronic communications from the department in lieu of traditional mail. To receive electronic communications, the account holder must access their account through the department’s secure online portal, verify the account, and select the correspondence option to receive electronic correspondence.

(2) An account holder may discontinue electronic communications at any time by updating their communications preference in the online portal.

(3) For purposes of this rule, “electronic communications” means communications transmitted and received through the department's secure online portal that allows the department and an account holder to retain, retrieve, and reproduce the communication. Non-exhaustive examples of electronic communications include general correspondence, electronic documents, forms, letters, notices (legal and nonlegal), and statements of account.

(4) It is the responsibility of an account holder to ensure accuracy of account information and the ability to receive electronic communications from the department.

(5) In its discretion, the department may continue traditional mail communications even if the account holder has elected to receive electronic communications. The department may unilaterally revert to traditional mail with an account holder if the department reasonably determines that electronic communications have failed or are otherwise undeliverable.

(a) An account holder may request to resume electronic communications with the department if the reason for any prior communication failure has been resolved.

(b) The department may attempt to resolve an account holder’s inability to receive electronic communications, the results of which will be communicated to the account holder through the most reliable means.

(6) If the department sends a communication to an account holder by both traditional mail and electronic means, service occurs upon the earlier of when the communication is posted to the account holder’s account or the date of mailing.

(7) An authorized representative who has been granted account access through the online portal may view electronic versions of an account holder’s communications but cannot opt out of receiving traditional mail copies of communication sent to the account holder.

(8) Opting in to receive electronic communications from the department does not change, limit, or extend any responsibility, obligation, or deadline imposed upon an account holder under the law.

History

Authorizing statute(s): 15-1-201, 15-1-233, MCA
Implementing statute(s): 15-1-201, 15-1-233, MCA
History: NEW, 2026 MAR, Notice No. 2026-98, Eff. 9/5/26.

Mont. Admin. R. 42.5.211 Personal Identification Number

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-211, MCA
History: NEW, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2003 MAR p. 2897, Eff. 12/25/03.

Mont. Admin. R. 42.5.212 Electronic Payment/Filing Date

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-210, MCA
History: NEW, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2003 MAR p. 2897, Eff. 12/25/03.

Mont. Admin. R. 42.5.213 Backup Situation (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-802, 15-30-2510, MCA
History: NEW, 1996 MAR p. 1169, Eff. 4/26/96; AMD, 2002 MAR p. 1906, Eff. 7/12/02; AMD, 2003 MAR p. 2897, Eff. 12/25/03; AMD, 2010 MAR p. 1995, Eff. 9/10/10; AMD, 2013 MAR p. 222, Eff. 2/15/13; REP, 2026 MAR, Notice No. 2026-476, Eff. 3/21/26.

Subchapter 42.5.3 Electronic Levies and Writs

Mont. Admin. R. 42.5.301 Definitions

The following definitions apply to terms found in this subchapter:

(1) "Debt code addendum" means a section of the signed service agreement in which the process server instructs the department on the technical aspects of issuing payment for funds seized through the levy process.

(2) "Electronic service" means the service of a writ, levy, or document by electronic submission. Electronic services are also known as e-services. Electronic service may allow for noncommercial services online.

History

Authorizing statute(s): 15-1-201, 15-1-706, 17-4-110, MCA
Implementing statute(s): 15-1-706, 25-13-402, MCA
History: NEW, 2014 MAR p. 2794, Eff. 11/7/14.

Mont. Admin. R. 42.5.302 Process Servers Submission of Levies and Writs to the Department by Electronic Means

(1) The department and process server, as defined in 37-60-101, MCA, must have a signed service agreement and debt code addendum in place prior to the department's acceptance of electronic service of levies and writs.

(2) The signed service agreement serves as the department's written consent to be served electronically in accordance with 25-13-402, MCA, for service of levies and writs upon a state income tax refund that are due to the judgment debtor from the department. Acceptance of electronic service documents is limited solely to the purposes described under 25-13-402, MCA.

(3) When a signed service agreement is in place, the process server shall serve all levies and writs for debt collection on the department electronically. The department will not accept levies or writs in paper format from a process server that has entered into an agreement to submit them by electronic means.

(4) The process server shall provide a valid social security or other federal identification number for each debtor, and a valid district court cause number for each writ.

History

Authorizing statute(s): 15-1-201, 15-1-706, 17-4-110, MCA
Implementing statute(s): 15-1-706, 25-13-402, MCA
History: NEW, 2014 MAR p. 2794, Eff. 11/7/14.

Mont. Admin. R. 42.5.303 Department's Treatment of Writs Received from Process Servers

(1) Upon receipt of a writ from a process server, the department shall seize income tax refunds due the debtor for offset of the debt.

(2) The department shall not calculate interest and/or penalties on any judgment liability submitted for offset.

(3) Upon the department receiving notification that a debtor has filed for bankruptcy, the department shall inactivate the debtor from offset activity.

History

Authorizing statute(s): 15-1-201, 15-1-706, 17-4-110, MCA
Implementing statute(s): 15-1-706, 25-13-402, MCA
History: NEW, 2014 MAR p. 2794, Eff. 11/7/14.

Mont. Admin. R. 42.5.304 Department's Submission of Levies and Writs to Financial Institutions and Employers by Electronic Means

(1) The department shall have a Warrant for Distraint filed with a Montana court prior to submitting a judgment liability.

(2) The department shall adhere to the form and content of the writ in accordance with 25-13-301, MCA, and provide a valid district court cause number when submitting electronic levies, writs, or garnishments to financial institutions and employers.

History

Authorizing statute(s): 15-1-201, 15-1-706, MCA
Implementing statute(s): 15-1-706, 25-13-301, MCA
History: NEW, 2014 MAR p. 2794, Eff. 11/7/14.

Chapter 42.6 INVESTIGATIONS AND ENFORCEMENT DIVISION CHILD SUPPORT ENFORCEMENT SERVICES (Transferred to PUBLIC HEALTH AND HUMAN SERVICES, TITLE 37)

Authorizing statute(s): Sec. 40-5-202, MCA
Implementing statute(s): Sec. 40-5-214 and 40-5-221, MCA
History: NEW, 1979 MAR p. 1689, Eff. 12/28/79; AMD, 1982 MAR p. 2151, Eff. 12/17/82; REP, 1987 MAR p. 2391, Eff. 12/25/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.109 Scale of Suggested Minimum Contributions

History

Authorizing statute(s): Sec. 40-5-202(9), MCA
Implementing statute(s): Sec. 40-5-214, 40-5-226(4), and 40-5-226(8), MCA
History: NEW, 1987 MAR p. 2391, Eff. 12/25/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.121 Definitions Related to Fees for Services

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 40-5-203, MCA
Implementing statute(s): Sec. 40-5-203, MCA
History: NEW, 1980 MAR p. 588, Eff. 2/15/80; REP, 1988 MAR p. 733, Eff. 4/15/88; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.122 Application Fee

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 40-5-203, MCA
Implementing statute(s): Sec. 40-5-203, MCA
History: NEW, 1980 MAR p. 588, Eff. 2/15/80; REP, 1988 MAR p. 733, Eff. 4/15/88; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.123 Collection Fees

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 40-5-203, MCA
Implementing statute(s): Sec. 40-5-203, MCA
History: NEW, 1980 MAR p. 588, Eff. 2/15/80; REP, 1988 MAR p. 733, Eff. 4/15/88; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.141 Definitions

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.142 Releasing Information About an Individual's Child Support Debt

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.143 Notice of Credit Agency's Intent to Request Information

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.144 Individual's Request for Inspection

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.145 Hearing on Accuracy of Information in Department's Records

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.146 Waiver of Rights for the Release of Information

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.147 Credit Agency's Request for Information

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.148 Response to Credit Agency's Request for Information

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.149 Fees

History

Authorizing statute(s): Sec. 31-3-127(5) and 40-5-202, MCA, and Ch. 543, L. 1985
Implementing statute(s): Sec. 31-3-127 and 53-2-504, MCA
History: NEW, 1986 MAR p. 1832, Eff. 10/31/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Subchapter 42.6.2 Child Support Debt Tax Offsets

Mont. Admin. R. 42.6.201 Offset of State Tax Refunds for Child Support Debts

History

Authorizing statute(s): Sec. 17-4-110, MCA
Implementing statute(s): Sec. 17-4-105(4), MCA
History: NEW, 1986 MAR p. 2065, Eff. 12/27/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.202 Notice of Offset of State Tax Refunds for Child Support Debts

History

Authorizing statute(s): Sec. 17-4-110, MCA
Implementing statute(s): Sec. 17-4-105(4), MCA
History: NEW, 1986 MAR p. 2065, Eff. 12/27/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.203 Child Support Offset of Joint Return

History

Authorizing statute(s): Sec. 17-4-110, MCA
Implementing statute(s): Sec. 17-4-105(4), MCA
History: NEW, 1986 MAR p. 2065, Eff. 12/27/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.204 Hearing Procedures for Child Support Offsets

History

Authorizing statute(s): Sec. 17-4-110 and 40-5-226, MCA
Implementing statute(s): Sec. 17-4-105(4), MCA
History: NEW, 1986 MAR p. 2065, Eff. 12/27/86; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Subchapter 42.6.3 Child Support Income Withholding

Mont. Admin. R. 42.6.301 Definitions

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 2-15-112, 40-5-401 through 40-5-434, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.302 Independent Support Enforcement Contractors

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 2-15-112, 40-5-401 through 40-5-434, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.303 Withholding Entity

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 2-15-112, 40-5-401 through 40-5-434, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.304 Voluntary

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 2-15-112, 40-5-401 through 40-5-434, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.305 Hearing Procedures

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-414, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.307 Modification or Termination of Withholding Orders

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-417, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.308 Receipt of Payments Required

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-412 and 40-5-421, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.309 Prompt Delivery of Withheld Amount

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-421, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.310 Allocation of Payments

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-203(3) and 40-5-415, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.311 Availability of Hardship Adjustments

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-416, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.312 Affect of Hardship Determination

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-416, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.313 Procedures for Determining Hardship Adjustments

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-416, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Mont. Admin. R. 42.6.314 Interstate Income Withholding

VIDEO DRAW POKER MACHINES

Sub-Chapter 1

General Provisions

History

Authorizing statute(s): Sec. 40-5-202 and 40-5-405, MCA
Implementing statute(s): Sec. 40-5-432, MCA
History: NEW, 1987 MAR p. 328, Eff. 3/27/87; TRANS, to Dept. of SRS, 1989 MAR p. 757, Eff. 7/1/89.

Chapter 42.7 INVESTIGATIONS AND ENFORCEMENT DIVISION VIDEO DRAW POKER MACHINES (Transferred to JUSTICE, TITLE 23)

Subchapter 42.7.1 General Provisions

Mont. Admin. R. 42.7.102 Definitions

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605, MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.103 Application for License, License Fee, and Licensing Requirement

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605, 23-5-611, and 23-5-612(1), MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.122 License Not Transferable

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605, 23-5-611 and 23-5-612(1), MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.123 Expiration -- Renewal of License

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605 and 23-5-612(1), MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.124 Licensee Business Relationships

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605 and 23-5-613, MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.125 Licensee Qualifications - Denial of Application -- Nonrenewal of License -- Fair Hearing -- Judicial Review

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605, 23-5-611, and 23-5-612(1), MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.126 Quarterly Reporting Requirements

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605, MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Mont. Admin. R. 42.7.127 Record Retention Requirements

History

Authorizing statute(s): Sec. 23-5-605, MCA
Implementing statute(s): Sec. 23-5-605, MCA
History: EMERG, NEW, 1985 MAR p. 1623, Eff. 11/1/85; TRANS, to Dept. of Commerce, Ch. 154, L. 1987, Eff. 3/22/87.

Chapter 42.8 Board of Review

Subchapter 42.8.1 eStop Business Licenses

Mont. Admin. R. 42.8.101 Definitions

The following definitions apply to this chapter.

(1) "Agency" means those agencies identified in 30-16-303, MCA, and other state agencies as approved by the Governor.

(2) "Department" means the Department of Revenue as defined in 30-16-103, MCA.

(3) "Master application" means the application as provided in the eStop business licenses guide provided by the department.

History

Authorizing statute(s): 30-16-104, MCA
Implementing statute(s): 30-16-103, 30-16-303, MCA
History: NEW, 2002 MAR p. 1559, Eff. 5/31/02; AMD, 2014 MAR p. 2658, Eff. 10/24/14.

Mont. Admin. R. 42.8.102 eSTOP BUSINESS LICENSES GUIDE

(1) The department will make available to all businesses a guide regarding the process for filing an application under the eStop program. This guide, as periodically updated by the department, may be obtained from the Department of Revenue web site at revenue.mt.gov; by a written request to P.O. Box 5805, Helena, Montana 59604-5805; or by calling the department's call center in Helena at (406) 444-6900.

History

Authorizing statute(s): 30-16-104, MCA
Implementing statute(s): 30-16-103, 30-16-201, 30-16-301, 30-16-302, 30-16-303, MCA
History: NEW, 2002 MAR p. 1559, Eff. 5/31/02; AMD, 2011 MAR p. 1557, Eff. 8/12/11; AMD, 2014 MAR p. 2658, Eff. 10/24/14.

Mont. Admin. R. 42.8.103 Anniversary Dates Established by the Department

(1) The department will provide a master application form to all license applicants who qualify under Title 30, chapter 16, MCA. This application form shall be completed and returned to the department for processing.

(2) The date the department processes a complete master application shall be the anniversary date for all licenses unless the agency notifies the department of a different date.

(3) Anniversary dates for pre-existing licenses administered under Title 30, chapter 16, MCA, shall be the date originally issued by the department.

History

Authorizing statute(s): Sec. 30-16-104, MCA
Implementing statute(s): Sec. 30-16-103, 30-16-201, 30-16-301, 30-16-302, and 30-16-303, MCA
History: NEW, 2002 MAR p. 1559, Eff. 5/31/02.

Mont. Admin. R. 42.8.104 Responsibilities

(1) It will be the responsibility of the Board of Review, as established in 30-16-302, MCA, to provide policy direction to the department for the administration of the program and to establish program policy among the participating agencies.

(2) It will be the responsibility of the agency to enforce and administer the licenses according to the appropriate statutes of that agency. It is the responsibility of the agency to acquire missing documents or material necessary to process the master application and forward this material to the department.

(3) It will be the responsibility of the department to process complete master applications that contain all the necessary supporting documentation. Applications will be processed upon receipt but licenses will not be issued until all required documents have been forwarded to the department from the agency or the applicant.

(4) It will be the responsibility of the eStop business licenses program to simplify the process for businesses to apply and renew select business licenses administered by multiple state agencies. Agencies will work jointly to create a simple process, thereby creating efficiencies for both businesses and state agencies participating in the program.

History

Authorizing statute(s): 30-16-104, MCA
Implementing statute(s): 30-16-103, 30-16-201, 30-16-301, 30-16-302, 30-16-303, MCA
History: NEW, 2002 MAR p. 1559, Eff. 5/31/02; AMD, 2011 MAR p. 1557, Eff. 8/12/11; AMD, 2014 MAR p. 2658, Eff. 10/24/14.

Mont. Admin. R. 42.8.105 Pro-Rating License Fees

(1) License fees shall be prorated only at the request of the agency responsible for administration of the license.

History

Authorizing statute(s): Sec. 30-16-104, MCA
Implementing statute(s): Sec. 30-16-103, 30-16-201, 30-16-301, 30-16-302, and 30-16-303, MCA
History: NEW, 2002 MAR p. 1559, Eff. 5/31/02.

Mont. Admin. R. 42.8.106 Electronic Submission of Documents and Electronic Signatures

(1) The department may accept electronic submission of certain documents through the licensing portal.

(2) An electronically submitted document is only complete if:

(a) all requested information is provided; and

(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.

(3) By electronically submitting a document, the submitter declares, under the penalty of false swearing, that:

(a) the information submitted is true, correct, and complete; and

(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.

(4) An electronically submitted document is subject to the same deadlines as a document submitted in paper form.

History

Authorizing statute(s): 30-16-104, MCA
Implementing statute(s): 30-16-102, 30-16-103, 30-16-104, 30-18-102, MCA
History: NEW, 2013 MAR p. 2315, Eff. 12/13/13.

Chapter 42.9 Pass-Through Entities

Subchapter 42.9.1 General

Mont. Admin. R. 42.9.101 Definitions

The following definitions apply to this chapter:

(1) "Eligible participant" means a partner of a partnership or a shareholder of an S corporation that is a nonresident individual, estate, or trust, a foreign C corporation, or a pass-through entity whose only Montana source income for the tax year is from partnerships or S corporations electing to file composite returns and pay composite taxes on their behalf.

(2) "Foreign C corporation" means a corporation that is not engaged in or doing business in the state. "Engaged in business" and "doing business" are defined in 15-31-101, MCA, and ARM 42.23.102.

(3) "Other nonresident entity" means an entity, organization, or account whose principal place of business or administration is located outside the state of Montana that has not elected, for tax purposes, to be treated as a disregarded entity, partnership, or corporation, and is not an estate or trust.

(4) "Share of a partnership's or S corporation's income" means the aggregate of a participant's share of the pass-through entity's income, gain, loss, or deduction, or item of income, gain, loss, or deduction.

History

Authorizing statute(s): 15-30-2620, 15-30-3312, MCA
Implementing statute(s): 15-30-3311, 15-30-3312, 15-30-3313, MCA
History: NEW, 1996 MAR p. 2985, Eff. 10/4/96; TRANS, from ARM 42.15.701 and AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2004 MAR p. 2751, Eff. 11/5/04; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.102 Pass-Through Entity Information Returns

(1) Every pass-through entity with Montana source income is subject to the requirement in 15-30-3302, MCA, to file pass-through entity information returns. Most pass-through entities are subject to an annual filing requirement. In general, the status of a pass-through entity is the same as its status for federal income tax purposes. A pass-through entity falls into one of three categories:

(a) partnership;

(b) S corporation; or

(2) Disregarded entities with Montana source income, whose separate existence is disregarded for federal income tax purposes, are subject to the information return filing requirements in this rule, even though no filing requirement may be imposed in the IRC. Some disregarded entities are required to file information returns only on the happening of an event.

(3) Partnership and S corporation returns can be filed electronically through the joint federal/state program using Montana-approved e-filing tax software.

(4) Pass-through entity information returns can be filed on paper and mailed to:

Montana Department of Revenue

P.O. Box 8021

Helena, Montana 59604-8021.

(5) Rules for automatic extensions to file the information returns are provided for in ARM 42.9.301 and 42.9.401 for each type of pass-through entity. In addition, on written application, and for good cause shown, the department may grant additional extensions for the filing requirements provided in this subchapter.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-2616, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 MAR p. 174, Eff. 1/15/10; AMD, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.103 Late-File Penalty for Pass-Through Entities

(1) A pass-through entity required to file a Montana information return, as provided in ARM Title 42, chapter 9, is subject to a late-filing penalty if the return is not filed by the due date (including extensions).

(2) ARM 42.3.101 through 42.3.115 and 42.3.120 apply to requests for waiving penalties.

(3) For disregarded entities that do not have a tax year, the number of partners, shareholders, members, or other owners will be determined as of the preceding December 31.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 MAR p. 174, Eff. 1/15/10; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.104 Consent, Composite Return, or Withholding for Partners, Shareholders, Managers, and Members Who Are Nonresident Individuals, Estates, or Trusts

(1) A partnership and S corporation with one or more nonresident individual, estate, or trust owners, during any part of a tax year for which an information return is required by this chapter, must for each nonresident individual, estate, or trust that receives a distributive share of Montana source income of $1,000 or more:

(a) file a composite return as provided in ARM 42.9.202 and include the nonresident individual, estate, or trust in the filing;

(b) obtain from the nonresident individual, estate, or trust and file Form PT-AGR (Montana Pass-Through Entity Owner Agreement). On Form PT-AGR, the owner agrees to timely file a Montana individual or fiduciary income tax return, to timely pay tax due, and to be subject to the state's tax collection jurisdiction; or

(c) remit an amount on the partner's or shareholder's behalf, determined as provided in (5), with the Pass-Through Entity Information Return, Forms CLT-4S or PR-1 and provide Montana Schedule K-1 to the nonresident individual, estate, or trust. The Montana Schedule K-1 must set forth the amount of withholding remitted to the department which can be used as a refundable credit against the tax liability of the nonresident individual, estate, or trust upon filing a Montana individual or fiduciary income tax return.

(2) A disregarded entity with one or more nonresident individual, estate, or trust owners, during any part of a tax year for which an information return is required by this chapter, must for each nonresident individual, estate, or trust:

(a) obtain from the nonresident individual, estate, or trust and file Form PT-AGR (Montana Pass-Through Entity Owner Agreement). On Form PT-AGR, the owner agrees to timely file a Montana individual or fiduciary income tax return, to timely pay tax due, and to be subject to the state's tax collection jurisdiction; or

(b) remit an amount on the partner or shareholder's behalf, determined as provided in (5), with Form DER-1, Disregarded Entity Information Return and provide Montana Schedule K-1 to the nonresident individual, estate, or trust. The Montana Schedule K-1 must set forth the amount of withholding remitted to the department which can be used as a refundable credit against the tax liability of the nonresident individual, estate, or trust upon filing a Montana individual or fiduciary income tax return.

(3) The pass-through entity is not required to file new agreements each year, but must file a currently effective agreement for each new nonresident individual, estate, or trust owner that does not elect to be included in a composite return or choose to have the pass-through entity remit tax on their behalf.

(4) A nonresident owner may file Form PT-AGR with the department directly. The nonresident owner must notify and provide a copy of the completed Form PT-AGR to the partnership, S corporation, or disregarded entity. The Form PT-AGR is due on or before the due date, including extensions, of the pass-through entity's return. If the nonresident owner files Form PT-AGR, the partnership, S corporation, or disregarded entity is still subject to the filing requirements as provided in (1).

(5) The amount that must be remitted by the due date described in (6) is the highest marginal rate in effect under 15-30-2103, MCA, multiplied by the share of Montana source income of the nonresident individual, estate, or trust reflected on the pass-through entity's information return.

(6) The due date for the remittance described in (1)(c) and (2)(b) is the due date of the entity's information return.

(7) If a pass-through entity fails to withhold on the distributive share of income reported to a nonresident individual, estate, or trust, as required under 15-30-3313, MCA, and the income that is subject to withholding is subsequently reported on the tax return of any owner for the correct tax year, and all applicable tax is paid, then the tax that the pass-through entity failed to withhold shall not be collected from the pass-through entity; however:

(a) such payment by the owner does not relieve the pass-through entity from liability for penalties, interest, or additions to the applicable tax because of its failure to deduct and withhold; and

(b) the pass-through entity will not be relieved under this rule from its liability for the amounts required to be withheld unless it demonstrates that the income tax against which the required withholdings may be credited has actually been reported and paid.

(8) A publicly traded partnership as defined in section 7704(b) of the IRC, that is treated as a partnership for federal purposes, is exempt from the requirements in (1) for tax years beginning after December 31, 2008, if certain information is provided to the department. This information includes the name, address, taxpayer identification number, and Montana source income of each partner that had an interest in the partnership during the tax year. This information must be provided in an electronic format approved by the department.

History

Authorizing statute(s): 15-30-2620, 15-30-3313, MCA
Implementing statute(s): 15-30-3312, 15-30-3313, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2004 MAR p. 2751, Eff. 11/5/04; AMD, 2010 MAR p. 174, Eff. 1/15/10; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.105 Consent, Composite Return, or Withholding for Partners, Shareholders, Managers, and Members That Are Foreign C Corporations

(1) A partnership with one or more foreign C corporation or other nonresident entity owners, during any part of a tax year for which an information return is required by this chapter, must for each foreign C corporation, or other nonresident entity, that receives a distributive share of Montana source income of $1,000 or more:

(a) file a composite return as provided in ARM 42.9.202 and include the foreign C corporation or other nonresident entity in the filing;

(b) obtain from the foreign C corporation or other nonresident entity and file Form PT-AGR (Montana Pass-Through Entity Owner Agreement). On Form PT-AGR, the owner agrees to timely file a Montana income tax return, to timely pay tax due, and to be subject to the state's tax collection jurisdiction; or

(c) remit an amount on the foreign C corporation's or other nonresident entity's behalf, determined as provided in (5), with the Pass-Through Entity's Information Return, Form PR-1 or Form CLT-4S and provide Montana Schedule K-1 to the foreign C corporation or other nonresident entity. The Montana Schedule K-1 must set forth the amount of withholding remitted to the department which can be used as a withholding payment against the tax liability of the foreign C corporation or other nonresident entity, upon filing a Montana income tax return.

(2) A disregarded entity with one or more foreign C corporation or other nonresident entity owners, during any part of a tax year for which an information return is required by this chapter, must for each foreign C corporation or other nonresident entity:

(a) obtain from the foreign C corporation or other nonresident entity and file Form PT-AGR (Montana Pass-Through Entity Owner Agreement). On Form PT-AGR, the owner agrees to timely file a Montana income tax return, to timely pay tax due, and to be subject to the state's tax collection jurisdiction on the Montana pass-through entity owner tax agreement, Form PT-AGR, Montana Pass-Through Entity Owner Tax Agreement; or

(b) remit an amount on the foreign C corporation's or other nonresident entity's account, determined as provided in (5), with the Form DER-1, Disregarded Entity Information Return and provide Montana Schedule K-1 to the foreign C corporation or other nonresident entity. The Montana Schedule K-1 must set forth the amount of withholding remitted to the department which can be used as a withholding payment against the tax liability of the foreign C corporation or other nonresident entity upon filing a Montana income tax return.

(3) The pass-through entity is not required to file new agreements each year, but must file a currently effective agreement for each new foreign C corporation or other nonresident entity owner that does not elect to be included in a composite return or choose to have the pass-through entity remit tax on their behalf.

(4) A foreign C corporation or other nonresident entity may file Form PT-AGR with the department directly. The foreign C corporation or other nonresident entity must notify and provide a copy of the completed Form PT-AGR to the partnership, S corporation, or disregarded entity. The Form PT-AGR is due on or before the due date, including extensions, of the pass-through entity's return. If the foreign C corporation or other nonresident entity files Form PT-AGR, the partnership, S corporation, or disregarded entity is still subject to the filing requirements as provided in (1).

(5) The amount that must be remitted by the due date described in (6) is the tax rate in effect under 15-31-121, MCA, multiplied by the foreign C corporation's or other nonresident entity's share of Montana source income reflected on the pass-through entity's information return.

(6) The due date for the remittance described in (1)(c) and (2)(b) is the due date of the entity's information return.

(7) If a pass-through entity fails to withhold on the distributive share of income reported to a foreign C corporation or other nonresident entity, as required under 15-30-3313, MCA, and the income that is subject to withholding is subsequently reported on the tax return of any owner for the correct tax year and all applicable tax is paid, then the tax that the pass-through entity failed to withhold shall not be collected from the pass-through entity; however:

(a) such payment by the owner does not relieve the pass-through entity from liability for penalties, interest, or additions to the tax applicable because of its failure to deduct and withhold; and

History

Authorizing statute(s): 15-30-2620, 15-30-3313, MCA
Implementing statute(s): 15-30-3312, 15-30-3313, MCA
History: NEW, 2004 MAR p. 2751, Eff. 11/5/04; AMD, 2010 MAR p. 174, Eff. 1/15/10; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.106 Composite Return, Withholding, or Waiver for Partners, Shareholders, Managers, and Members That Are Second-Tier Pass-Through Entities

(1) Except as provided in (2), (6), and (7), a first-tier pass-through entity with one or more owners that are also pass-through entities (second-tier pass-through entities), during any part of the tax year for which an information return is required by this chapter, must for each second-tier pass-through entity that receives a distributive share of Montana source income of $1,000 or more:

(a) file a composite return as provided in ARM 42.9.202 and include the second-tier pass-through entity in the filing; or

(b) do each of the following:

(i) remit to the department an amount equal to the highest marginal rate in effect under 15-30-2103, MCA, multiplied by the second-tier pass-through entity's share of Montana source income with the Forms CLT-4S, PR-1, or DER-1 Pass-Through Entity's Information Return; and

(ii) provide Montana Schedule K-1 to the second-tier pass-through entity setting forth the amount remitted to the department that may be claimed as a refundable credit against the Montana income tax liability of the owners who file individual, corporate income, or other income tax returns as explained in (8).

(2) The department may waive the requirements to remit tax or pay composite tax on behalf of a domestic second-tier pass-through entity for the current tax year, as set forth in (1), if the first-tier pass-through entity obtains from the domestic second-tier pass-through entity a completed Form PT-AGR and files it with the department by the due date of the first-tier pass-through entity's tax return, including extensions. On Form PT-AGR, the domestic second-tier pass-through entity owner must:

(a) provide the name, address, and social security or federal employer identification number of each of the domestic second-tier pass-through entity's partners, shareholders, members, or other owners;

(b) establish that the domestic second-tier pass-through entity's share of Montana source income should be fully accounted for in a resident individual, fiduciary, or corporate income tax return; and

(c) agree to notify the first-tier pass-through entity and the department if the ownership of the domestic second-tier pass-through entity and, if applicable, the ownership of any higher-tier pass-through entities changes.

(3) The department may revoke the waiver provided for in (2) if it determines that the partner, shareholder, member, or other owner no longer qualifies as a domestic second-tier pass-through entity. The department will notify the first-tier pass-through entity in writing of its requirement to withhold on the second-tier pass-through entity.

(4) The pass-through entity is not required to file new agreements each year, but must file a currently effective agreement for each new domestic second-tier pass-through entity owner that does not elect to be included in a composite return or choose to have the pass-through entity remit tax on their behalf.

(5) For the purposes of (2), (3), and (4), a "domestic second-tier pass-through entity" has the same meaning as provided in 15-30-3313, MCA.

(6) A publicly traded partnership as defined in section 7704(b) of the IRC, that is treated as a partnership for federal purposes, is exempt from the requirements in (1) for tax years beginning after December 31, 2008, if certain information is provided to the department. This information includes the name, address, taxpayer identification number, and Montana source income of each partner that had an interest in the partnership during the tax year. This information must be provided in an electronic format approved by the department.

(7) The exemption applicable to a publicly traded partnership (PTP), as described in (6), may be extended to a pass-through entity in which one or more PTPs has a direct or indirect majority interest in the income distributed by the pass-through entity. To receive a waiver, the pass-through entity must submit a written waiver request to the department at least 45 days before the original due date of the first-tier pass-through entity's tax return. Additional information is required if the following conditions exist:

(a) if the PTP is the second-tier partner, the PTP must be in compliance with filing requirements;

(b) if the PTP is not the second-tier partner, all tiers between the PTP and the first-tier entity must be in compliance with filing requirements, and the first-tier entity must provide the following documentation:

(i) an organizational chart;

(ii) all agreements that include information about ownership in the pass-through entity and special allocation; and

(c) a PTP must have an ultimate majority interest in the income distributed by the pass-through entity, to be determined on a case-by-case basis.

(8) The amount remitted by the first-tier pass-through entity on behalf of the second-tier pass-through entity is claimed as a refundable credit by the taxpayer who ultimately reports their distributive share of the second-tier pass-through entity's Montana source income. For example:

(a) a first-tier pass-through entity remitted tax on behalf of a second-tier pass-through entity, X. X has two owners, an individual and another pass-through entity, Y. The individual owner will report his or her distributive share of the remitted tax as a refundable credit on an individual Montana income tax return. The other owner, Y, will report Y's distributive amount of the remitted tax to its owner. Y has one owner, a trust. The trust will report its distributive share of the remitted tax as a refundable credit on its Montana income tax return for trusts and estates.

(9) If a pass-through entity fails to withhold on the distributive share of income reported to a second-tier pass-through entity, as required under 15-30-3313, MCA, and the income that is subject to withholding is reported on the tax return of any owner for the correct tax year and all applicable tax is paid, then the tax that the pass-through entity failed to withhold shall not be collected from the pass-through entity; however:

(a) such payment by the owner does not relieve the pass-through entity from liability for penalties, interest, or additions to the tax applicable because of its failure to deduct and withhold; and

(b) the pass-through entity will not be relieved under this rule from its liability of the amounts required to be withheld unless it demonstrates that the income tax against which the required withholdings may be credited has actually been reported and paid.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-30-3313, MCA
Implementing statute(s): 15-30-2620, 15-30-3302, 15-30-3312, 15-30-3313, MCA
History: NEW, 2004 MAR p. 2751, Eff. 11/5/04; AMD, 2010 MAR p. 174, Eff. 1/15/10; AMD, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15; AMD, 2017 MAR p. 2094, Eff. 11/10/17.

Mont. Admin. R. 42.9.107 Multi-Tiered Pass-Through Entity Structures with Montana Source Income – Reporting Requirements

(1) A pass-through entity may have, in addition to income from its own operations or activities, income from one or more other pass-through entities. This rule describes how the pass-through entity must classify its income from its own operations or activities as apportionable or nonapportionable income and how it must report its income from other pass-through entities. For purposes of this rule, "operations income" means the income of a pass-through entity from its own operations or activities and "flow-through income" means its separately and nonseparately stated distributable share of income from other pass-through entities.

(2) Except as provided in (5), each pass-through entity has to separately determine whether its operations income is apportionable or nonapportionable income as those terms are defined in ARM 42.26.206. Once a pass-through entity determines the apportionable or nonapportionable character of its operations income, the entity must then determine what part of this apportionable and/or nonapportionable income is Montana source income. Except as provided in (5) and (6), the operations income retains its character as apportionable or nonapportionable income and as Montana source income regardless of how many other tiers of pass-through entities through which the income is passed.

(3) Except as provided in (5) and (6), flow-through income of a pass-through entity, determined as provided in (1), retains its character as apportionable and/or nonapportionable income and its character as Montana source income.

(4) An entity in a multi-tiered pass-through entity structure may have flow-through income sourced to Montana under the subsections of the definition of "Montana source income" in 15-30-2101, MCA, that address partnership or S corporation income derived from Montana activity or property, reportable on Montana Schedule K-1, and also operations income sourced to Montana as a result of its own business activity under other subsections of that definition of "Montana source income," such as net income from a business, profession, or farming activities carried on in the state. If this occurs the entity must allocate to Montana the flow-through income sourced to Montana and the entity must determine the portion of its operations income that is sourced to Montana as provided in (1) and allocate or apportion that Montana source income under the provisions of ARM 42.9.112.

(5) This rule does not apply to a partnership or disregarded entity whose operations are unitary with the business operations of a corporate partner or disregarded entity owner that is a C corporation whose apportionment factors are included in the computation of the C corporation's apportionment factors as provided in ARM 42.26.228.

(6) Nothing in this rule prevents the department from determining the apportionable or nonapportionable character of an entity's operations income or the Montana source character of its Montana flow-through income sourced to Montana.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-601, 15-30-3302, 15-30-3311, 15-31-301, MCA
History: NEW, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2018 MAR p. 854, Eff. 4/28/18.

Mont. Admin. R. 42.9.108 Inactive Pass-Through Entities

(1) Except as provided in (3) and (4), foreign limited liability companies, foreign series limited liability companies, domestic limited liability companies, and domestic series limited liability companies qualified to do business in Montana and not required to file an information return under 15-30-3302, MCA, must submit an affidavit, on a form provided by the department, attesting that the limited liability company was not engaged in business in Montana during the reporting period.

(2) Foreign limited partnerships, foreign limited liability partnerships, domestic limited partnerships, and domestic limited liability partnerships qualified to do business in Montana and not required to file an information return under 15-30-3302, MCA, must submit an affidavit, on a form provided by the department, attesting that the limited partnership or limited liability partnership was not engaged in business in Montana during the reporting period.

(3) Any limited liability company organized solely to hold assets that does not claim a deduction under IRC section 212, for federal income tax purposes, is not required to submit an affidavit as set forth in (1) if, upon request from the department, the limited liability company provides a written statement describing the nature of its purpose.

(4) This rule does not apply to a limited liability company, limited partnership, or limited liability partnership that is treated as an association for federal income tax purposes and subject to the provisions outlined in Title 15, chapter 31, MCA.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-3302, 15-31-101, MCA
History: NEW, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.109 Partners, Shareholders, Managers, and Members Who Are Tax-Exempt Entities

(1) A pass-through entity is required to withhold tax on behalf of a partner, shareholder, manager, or member even if the partner, shareholder, manager, or member is not organized and operated for profit or is a stock bonus, pension, profit-sharing, or individual retirement plan. A partner, shareholder, manager, or member seeking the benefits of exemption from Montana filing and tax requirements must comply with all statutory requirements authorizing the classification claimed.

(2) In order to establish exemption status and thus be relieved of the duty of filing returns and paying tax based upon income received from a pass-through entity, each partner, shareholder, manager, or member claiming exemption must file an affidavit with the department showing:

(a) the character of the organization;

(b) the purpose it was organized for;

(d) the sources and the disposition of its income.

(3) Incorporated not-for-profit entities must file the affidavit required in (2) and include:

(a) a statement disclosing whether or not any of its income may inure to the benefit of any private shareholder or individual;

(b) a copy of the articles of incorporation;

(d) copies of the latest financial statements showing the assets, liabilities, receipts, and disbursements.

(4) Other unincorporated stock bonus, pension, profit-sharing, or individual retirement plans must file the affidavit required in (2) and include:

(a) documents relevant to the adoption and administration of the plan;

(b) copies of the latest financial summary or statements showing assets, liabilities, receipts, and disbursements; and

(c) a copy of any form the partner, shareholder, manager, or member is required to file with the IRS, if applicable. An example is federal Form 5500 Annual Return/Report of Employee Benefit Plan.

(5) In addition, if the IRS has granted the partner, shareholder, manager, or member exemption from the federal income tax, a certified copy of the exemption certificate or letter must also be filed.

History

Authorizing statute(s): 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2151, 15-30-3313, 15-31-101, 15-31-102, MCA
History: NEW, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.110 Pass-Through Entities – Audit Adjustments

(1) The department reports the details of audit adjustments resulting from an audit or other review of a pass-through entity's information return to the entity and the owners of the pass-through entity.

(2) The department reports the details of audit adjustments resulting from an audit or other review of a pass-through entity's composite tax return to the pass-through entity. The department does not report the details of audit adjustments to the eligible participants in the composite return because the pass-through entity is responsible for representing the eligible participants in appeals.

(3) If the audit adjustments resulting from an audit or other review of a pass-through entity's information return affect the Montana tax returns filed by the partners, shareholders, or other owners of the pass-through entity, then the department may adjust an owner's tax return to reflect the audit adjustments that passed through to the owner. If the department adjusts an owner's tax return, it will inform the owner of the details of the adjustments to its tax return, but the department will not report to the pass-through entity the details of the adjustments to the owner's tax return.

(4) If the audit adjustments resulting from an audit or other review of a pass-through entity's information return affect Montana tax returns that partners, shareholders, and other owners have not filed, the department may request that the owners file tax returns. If an owner does not file a tax return, the department may estimate the owner's tax liability in accordance with 15-30-2605, MCA. The department will not report the details of the owner's estimated tax liabilities to the pass-through entity.

(5) Except as provided in (6), for multi-tiered entity structures, the department will not report the details of audit adjustments resulting from an audit or other review of a pass-through entity's information return to a related entity, unless the related entity is an owner of the audited pass-through entity. For example:

(a) if an audit or other review of a first-tier entity results in an audit adjustment the department will report the details of the audit adjustments to the first-tier entity and the owners of the first-tier entity. However, the department will not report the details of the audit adjustments to the owners of the second-tier entity, the third-tier or any higher-tier entity.

(6) If a single member limited liability company that is considered a disregarded entity for federal tax purposes is an owner of the pass-through entity, the department may report the details of the audit adjustments directly to the disregarded entity's owner.

(7) In multi-tiered entity structures, audit adjustments resulting from an audit or other review of a pass-through entity's tax return may affect the tax returns of entities and individuals that are not direct owners of the pass-through entity. If audit adjustments pass through to these indirect owners the department may:

(a) adjust the indirect owner's tax returns. If the department adjusts an indirect owner's tax return, then the department will notify the indirect owner of the adjustments to its tax return, but the department will not report the details of the pass-through entity's audit adjustments that passed through to the indirect owner. If the indirect owner wants the details of the audit adjustments that affected its return, the indirect owner will have to contact the pass-through entity that it owns an interest in for that information; or

(b) estimate the indirect owner's tax liability in accordance with 15-30-2605, MCA. If the department estimates an indirect owner's tax liability, the department will notify the indirect owner of the estimated tax liability. The department will not report the details of the pass-through entity's audit adjustments that passed through to the indirect owner. If the indirect owner wants the details of the audit adjustments that affected its return, the indirect owner will need to contact the pass-through entity that it owns an interest in for that information.

History

Authorizing statute(s): 15-1-201, 15-30-3312, MCA
Implementing statute(s): 15-30-2605, 15-30-2618, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-511, 35-1-1107, 35-8-405, 35-10-103, 35-10-402, 35-12-508, MCA
History: NEW, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2016 MAR p. 2072, Eff. 11/11/16.

Mont. Admin. R. 42.9.111 Pass-Through Entities—statute of Limitations for Audit Adjustments

(1) The department may revise any return of an entity if, in the opinion of the department, it is incorrect in any essential respect.

(2) If a revision to a pass-through entity's information return changes the owners' distributive share of Montana source income, gain, loss, deduction, or credit or item of income, gain, loss, deduction, or credit, the department will review the owners' tax returns and determine if additional tax is due. If additional tax is due, the department may assess tax, penalties, and interest as follows:

(a) if the additional tax, penalties, and interest are due on a return filed by an individual, trust, or estate, it may be assessed within:

(i) five years of when the return was filed, if it pertains to a tax period beginning before January 1, 2015; or

(ii) three years after the return was filed if it pertains to a tax period beginning after December 31, 2014; or

(b) if the additional tax, penalties, and interest are due on a return filed by a C corporation, it may be assessed within three years of when the return was filed.

(3) If a revision to a pass-through entity's composite return changes the amount of tax, penalties, and interest due on a composite return filed by the pass-through entity, the tax, penalties, and interest may be assessed within:

(a) five years of when the composite return was filed if it pertains to a tax period beginning before January 1, 2015; or

(b) three years after the return was filed if it pertains to a tax period beginning after December 31, 2014.

(4) For purposes of (2) and (3), any return filed before the original due date is considered to be filed on the original due date.

(5) If no return was filed by the taxpayer, the department may assess tax, penalties, and interest at any time.

(6) There are various circumstances under which the statute of limitations described in (2)(a) and (3) may be extended as provided in 15-30-2605, MCA. The statute of limitations described in (2)(b) may be extended as provided in 15-31-509, MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2605, 15-30-2606, 15-30-2607, 15-30-3302, 15-30-3312, 15-31-509, MCA
History: NEW, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2016 MAR p. 2072, Eff. 11/11/16.

Mont. Admin. R. 42.9.112 Apportionable and Nonapportionable Income – Apportionment or Allocation – Pass-Through Entities

(1) For purposes of the reporting requirements for pass-through entities that have Montana apportionable or nonapportionable income and determining their Montana source income and Montana tax liability, the department adopts by reference the following rules contained in ARM Title 42, chapter 26 - Corporate Multistate Activities, subchapters:

(a) 1 - General Provisions;

(b) 2 - Income Allocation and Apportionment, except ARM 42.26.204, 42.26.228, 42.26.229, and 42.26.260;

(d) 6 - Railroads;

(e) 7 - Trucking;

(f) 8 - Airlines;

(g) 9 - Special Rules for Construction Contracts;

(h) 10 - Publishing Companies - Apportionment;

(i) 11 - Television and Radio Broadcasting;

(j) 12 - Telecommunication Services for Corporate Income Taxes; and

(k) 13 - Financial Institutions.

(2) The pass-through entity may petition for or the department may require an alternative method of reporting activity in the state as provided in 15-1-601, MCA.

(3) When applying the rules referred to in (1), the term "entity" replaces the term "corporation," and the provisions of Title 15, chapter 30, MCA, replace references to Title 15, chapter 31, MCA.

(4) The reporting requirements in ARM 42.9.107 are in addition to and not in lieu of any rules referred to in (1) and the provisions of the Multistate Tax Compact, as adopted in 15-1-601, MCA.

(5) A partnership whose operations are unitary with the business operations of a direct or indirect corporate partner and whose apportionment factors are included in the computation of that corporate partner's apportionment factors, pursuant to ARM 42.26.228, are considered a part of the corporate group for the purpose of applying the Finnigan Rule described in ARM 42.26.260.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-601, 15-30-2111, 15-30-3302, 15-31-301, 15-31-305, MCA
History: NEW, 2018 MAR p. 854, Eff. 4/28/18.

Subchapter 42.9.2 Composite Returns

Mont. Admin. R. 42.9.201 Composite Return—election

(1) A partnership or S corporation may elect to file a composite tax return and pay a composite tax on behalf of all eligible participants who consent to be included in the filing.

(2) The partnership or S corporation filing a composite return must maintain and make available to the department, on request, a written power of attorney of each consenting, eligible participant authorizing it to file the composite return and act on the individual's behalf.

(3) Any assessments of additional tax, penalties, and interest are the responsibility of the entity filing the composite return and will be based on the entity's total liability. Any additional assessment will be based on the total liability of the composite return.

(4) The entity or its representative must represent the eligible participants in any appeals, claims for refunds, hearings, or court proceedings in any matter relating to the filing of the composite return.

(5) Eligible participants who are nonresident individuals, estates, trusts, or foreign C corporations, and consent to be included in a composite filing, are consenting to such filing in lieu of filing a Montana income or corporate license tax return. The department will not accept Montana income or corporate license tax returns filed by an eligible participant for any tax year the eligible participant made a composite election.

(6) Eligible participants who are second-tier pass-through entities and consent to be included in a composite filing are consenting to such filing in lieu of filing a Montana partnership or S corporation information and composite tax return. The department will not accept Montana partnership or S corporation information and composite tax returns filed by an eligible participant for any tax year the eligible participant made a composite election.

History

Authorizing statute(s): 15-30-3312, MCA
Implementing statute(s): 15-30-3312, MCA
History: NEW, 1996 MAR p. 2985, Eff. 10/4/96; TRANS, from ARM 42.15.702 and AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2013 MAR p. 428, Eff. 3/29/13.

Mont. Admin. R. 42.9.202 Filing Requirement

(1) The Montana composite income tax return is due on or before the due date (including extensions) of the entity's information return provided in ARM 42.9.301 and 42.9.401. Extension of the date for filing the composite return does not extend the date for paying the composite tax. Interest and a late payment penalty accrue from the original due date of the return.

(2) The composite return must include the name, address, social security or federal employer identification number, ownership interest in the entity that is used to calculate the owner's distributive share of income, and composite return liability of each consenting eligible participant included in the filing.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2104, 15-30-3312, MCA
History: NEW, 1996 MAR p. 2985, Eff. 10/4/96; TRANS, from ARM 42.15.704 and AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2004 MAR p. 2751, Eff. 11/5/04; AMD, 2010 MAR p. 174, Eff. 1/15/10.

Mont. Admin. R. 42.9.203 Computation of Composite Tax

(1) The composite tax, required to be remitted to the department with the composite tax return, is the sum of each electing eligible participant's composite tax liability.

(2) A participant's composite tax liability is assessed on the participant's share of the entity's federal income, adjusted according to 15-30-3312, MCA, and multiplied by the composite tax ratio. To determine a participant's composite tax liability, the entity must use the five-step calculation in (3).

(3) The composite return liability of each eligible consenting participant is calculated as follows:

(a) compute the entity's composite tax ratio, used to determine the Montana portion of the tax, by:

(i) calculating the entity's federal income;

(ii) calculating the entity's Montana source income;

(A) if the entity is only doing business in Montana, the entity's Montana source income is the net taxable income after Montana additions and deductions to income as allowed in 15-30-3302, MCA; or

(B) if the entity is engaged in multistate business, the entity's Montana source income is determined as provided in ARM 42.9.107; and

(iii) dividing the entity's Montana source income by the entity's federal income from all sources;

(b) compute each participant's share of federal income by multiplying the entity's federal income by the ratio of the participant's distributive share of Montana source income over the entity's total Montana source income;

(c) subtract the allowable standard deduction for a single individual and one exemption allowance from each participant's share of federal taxable income to obtain each participant's adjusted share of federal income;

(d) apply the rates specified in 15-31-121, MCA, for C corporations and the rates specified in 15-30-2103, MCA, for all other eligible participants on each participant's adjusted share of federal income to obtain the amount of tentative tax used to determine the Montana composite tax; and

(e) compute each participant's Montana composite tax liability by multiplying the tentative tax on the participant's share of federal income determined in (d) by the composite tax ratio computed in (a).

(4) Examples of the computations in (3) are as follows:

(a) Example 1a. Composite tax ratio: Assume a partnership's federal income from all sources (as reported on Form PR-1, line 15) is $60,000 and the partnership's Montana source income (as reported on Form PR-1, line 21) is $20,000. The composite tax ratio is $20,000/$60,000 = 33.333333%.

(b) Example 1b. Participant's share of federal income: Assume that the partnership in Example 1a. has one electing eligible participant in the composite tax return, an individual. To determine the electing partnership's share of federal taxable income, multiply the entity's federal income (as reported on Form PR-1, line 15) by the ratio of the participant's distributive share of Montana source income (as reported on the participant's Montana Schedule K-1, part 2) over the entity's total Montana source income (Form PR-1, line 21). Assume the participant's share of Montana source income is $10,000.

Participant's share of Montana source income | $10,000 Divide by total Montana source income (Form PR-1, line 21) | ÷ $20,000 Ratio of participant's share of Montana source income over the entity's total Montana source income | 50% Multiply by the partnership's federal income from all sources (Form PR-1, line 15) | x $60,000 Participant's share of federal income | $30,000

(c) Example 1c. Participant's share of adjusted federal income: Reduce the electing partner's distributive share of federal income from all sources by the allowable standard deduction for a single individual and one exemption allowance.

Electing partner's distributive share of federal income | $30,000 Standard deduction | ($ 4,460) Exemption allowance | ($ 2,380) Participant's share of adjusted federal taxable income | $23,160

(d) Example 1d. Participant's tentative tax: Using the tax rates in 15-30-2103, MCA, assume the tax is $1,043.

(e) Example 1e. Participant's Montana composite tax liability: Multiply the resulting tentative tax by the composite tax ratio determined in Example 1a.

Tax on the distributive share of federal income | $1,043 Composite tax ratio (from Example 1a.) | x 33.333333% Total Montana composite tax liability | $348

(5) Tax credits may not be claimed against composite tax.

(6) Separately stated deductions subjected to election or limitation on the participant's federal income tax return cannot be subtracted from the participant's share of the federal income for the purpose of calculating composite tax.

(7) When shareholders and partners elect to be included in the composite return, the entity must apply their share of mineral royalty tax withheld on mineral rights paid to the entity, and their share of pass-through withholding paid on behalf of the entity, to the composite tax liability.

(8) The entity is required to make quarterly estimated tax payments as prescribed by 15-30-2512, MCA, on the total composite tax liability as computed in (1).

(9) For the purposes of this rule, "federal income" means an entity's income from all sources as determined for federal income tax purposes.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-30-3312, MCA
Implementing statute(s): 15-30-2103, 15-30-2512, 15-30-3302, 15-30-3312, 15-31-121, MCA
History: NEW, 1996 MAR p. 2985, Eff. 10/4/96; TRANS, from ARM 42.15.705 and AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2004 MAR p. 2751, Eff. 11/5/04; AMD, 2010 MAR p. 174; Eff. 1/15/10; AMD, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2016 MAR p. 2072, Eff. 11/11/16; AMD, 2017 MAR p. 2094, Eff. 11/10/17.

Mont. Admin. R. 42.9.204 Composite Return - Net Operating Loss

(1) Net operating losses pass through to the individual shareholders and partners and are not available for carryover or carryback on the entity return. When these shareholders and partners elect to be included in the composite return, they lose their ability to use their distributive share of the net operating losses.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-3312, MCA
History: NEW, 2010 MAR p. 174, Eff. 1/15/10.

Subchapter 42.9.3 Partnerships

Mont. Admin. R. 42.9.301 Pass-Through Entity Information Returns for Partnerships

(1) Every partnership that has Montana source income must file a Form PR-1, Montana Partnership Information and Composite Tax Return, on or before the 15th day of the third month following the close of its annual accounting period.

(2) A six-month extension of time to file a partnership return is automatically allowed if any tax, penalties, and interest due are paid on or before the date the return is filed.

(3) A partnership required to file a Montana partnership information return is subject to a late-filing penalty if:

(a) the Montana partnership information return is not filed by the due date (including extensions);

(b) a copy of the partnership's federal partnership return is not filed with the Montana partnership information return; or

(i) name, address, and social security or federal identification number of each partner;

(ii) the partnership's Montana source income;

(iii) each partner's distributive share of Montana source income, gain, loss, deduction, or credit or items of income, gain, loss, deduction, or credit; and

(iv) each partner's distributive share of income, gain, loss, deduction, or credit, or item of income, gain, loss, deduction, or credit from all sources.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 MAR p. 174, Eff. 1/15/10; AMD, 2017 MAR p. 2094, Eff. 11/10/17.

Mont. Admin. R. 42.9.302 Electronic Returns Required for Partnerships Having More Than 100 Members

(1) Effective for tax years beginning after December 31, 2013, a partnership having more than 100 partners over the course of its tax year must electronically file a Montana Partnership Information and Composite Return (Form PR-1), using department-approved e-filing tax software.

(2) For purposes of this rule, the more than 100-partner threshold shall be considered satisfied if a partnership, on any one day over the course of the year, has more than 100 partners. For example:

(a) Partnership A has 95 partners on January 1, 2014. On April 1, 2014, ten new partners acquire partnership interests in Partnership A so that there are 105 total partners. On August 1, 2014, one of Partnership A's partners acquired the interests of ten partners which reduced the total number of partners to 95. Partnership A must file its Form PR-1 electronically because over the course of the tax year, the partnership had more than 100 partners.

(3) A partnership may request a waiver of the electronic filing requirement if the partnership can demonstrate that compliance with the requirement would cause an undue hardship.

(4) To request a waiver, the partnership must complete and timely submit a Partnership e-File Waiver Request form to the department along with the required supporting information as detailed on the form at least 30 days prior to the partnership's return due date including extensions. Examples of the supporting information include, but are not limited to, a description of the hardship, the incremental costs, and the steps to be taken to ensure the partnership's ability to file future returns electronically.

(5) A waiver request may not be submitted with the partnership's return or with a request for an extension for filing the partnership's return.

(6) Within 25 days after receipt of a waiver request provided for in (3), the department shall either approve or deny the request.

History

Authorizing statute(s): 15-1-201, 15-30-3315, MCA
Implementing statute(s): 15-30-2602, 15-30-3302, 15-30-3315, MCA
History: NEW, 2014 MAR p. 2979, Eff. 12/12/14.

Mont. Admin. R. 42.9.303 Guaranteed Payments to Individual Partners - Sourcing, Apportionment, and Allocation

(1) Except as provided in (2) and (3), guaranteed payments made to individual partners pursuant to section 707 of the Internal Revenue Code, 26 U.S.C. 707, are sourced to Montana based upon the Montana apportionment factor of the partnership. For example:

(a) A nonresident taxpayer's federal adjusted gross income includes three hundred thousand dollars ($300,000) of guaranteed payments for a designated use of capital received from a partnership that has a fifty percent (50%) Montana apportionment factor. One hundred and fifty thousand dollars ($150,000) of the guaranteed payments are included in the partner's gross income from Montana sources based on the apportionment factor of the partnership.

(2) Guaranteed payments made to a retired partner, per 4 U.S.C., section 114(b)(1)(I), are sourced to the recipient's state of domicile.

(3) Guaranteed payments made to an individual partner as compensation for services are sourced to Montana if the services provided by the individual partner are performed in the state. For example:

(a) A nonresident taxpayer's federal adjusted gross income includes five thousand dollars ($5,000) of guaranteed payments for services performed outside of Montana received from a partnership that has a fifty percent (50%) Montana apportionment factor. None of the guaranteed payments are included in the partner's gross income from Montana sources because the services were performed outside of Montana.

(b) A nonresident taxpayer's federal adjusted gross income includes five thousand dollars ($5,000) of guaranteed payments for services performed in Montana received from a partnership that has a fifty percent (50%) Montana apportionment factor. All of the guaranteed payments are included in the partner's gross income from Montana sources because the services were performed in Montana.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, 15-30-2110, 15-30-3302, 15-30-3311, MCA
History: NEW, 2018 MAR p. 854, Eff. 4/28/18.

Subchapter 42.9.4 S Corporations

Mont. Admin. R. 42.9.401 Pass-Through Entity Information Returns for S Corporations

(1) Every S corporation that has Montana source income must file a Form CLT-4S, Montana S Corporation and Composite Information Return, on or before the 15th day of the third month following the close of its annual accounting period.

(2) A six-month extension of time to file an S corporation return is automatically allowed if any tax, penalties, and interest due are paid on or before the date the return is filed.

(3) An S corporation required to file a Montana S corporation information return is subject to a late filing penalty if:

(a) the Montana S corporation information return is not filed by the due date (including extensions);

(b) a copy of the S corporation's federal return is not filed with the Montana S corporation information return; or

(i) name, address, and social security or federal identification number of each shareholder;

(ii) the S corporation's Montana source income;

(iii) each shareholder's pro rata share of separately and nonseparately stated Montana source income, gain, loss, deduction, or credit, or item of income, gain, loss, deduction, or credit; and

(iv) each shareholder's pro rata share of separately and nonseparately stated income, gain, loss, deduction, or credit, or item of income, gain, loss, deduction, or credit from all sources.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 ARM p. 174, Eff. 1/15/10; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2017 MAR p. 2094, Eff. 11/10/17.

Mont. Admin. R. 42.9.402 S Corporation Shareholder's Addition to Montana Adjusted Gross Income

(1) An S corporation shareholder's income is that income included in federal adjusted gross income plus:

(a) an amount equal to the federal tax on capital gains and the minimum tax paid by the corporation times the shareholder's percentage of ownership;

(b) an amount equal to the excess net passive federal income tax paid by the corporation times the shareholder's percentage of ownership; and

(c) all other amounts equal to federal taxes paid by the corporation that reduce the shareholder's distribution of the net S corporation income.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 1985 MAR p. 1633, Eff. 11/1/85; TRANS, from ARM 42.15.307 and AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 MAR p. 174, Eff. 1/15/10.

Subchapter 42.9.5 Disregarded Entities

Mont. Admin. R. 42.9.501 Pass-Through Entity Information Returns for Single-Member Llc Treated as Disregarded Entity

(1) Any single-member limited liability company (LLC) treated as a disregarded entity that has Montana source income, whether formed in Montana or in another state or country, must file a Montana Disregarded Entity Information Return, Form DER-1, as provided in this rule unless the sole member is an individual who has been a full-year Montana resident during the applicable reporting period.

(2) If the single member of the LLC is a C corporation, the LLC must file the return on or before the 15th day of the third month following the close of the C corporation's annual accounting period.

(3) If the single member of the LLC is an S corporation, the LLC must file the return on or before the 15th day of the third month following the close of the S corporation's annual accounting period.

(4) If the single member of the LLC is a qualified subchapter S subsidiary, the LLC must file the return on or before the due date of the parent S corporation's information return.

(5) If the single member of the LLC is a real estate investment trust (REIT), the LLC must file the return on or before the 15th day of the third month after the close of the REIT's annual accounting period.

(6) If the single member of the LLC is a qualified REIT subsidiary, the LLC must file the return on or before the due date of the parent REIT's information return.

(7) If the single member of the LLC is an individual, estate, or non-grantor trust, the LLC must file the return on or before the 15th day of the fourth month following the close of the annual accounting period of the individual, estate, or trust.

(8) If the single member of the LLC is a partnership, the LLC must file the return on or before the 15th day of the third month following the close of the partnership's annual accounting period.

(9) If the single member of the LLC is a real estate mortgage investment conduit (REMIC), the LLC must file the return on or before the 15th day of the fourth month after the close of the REMIC's annual accounting period.

(10) If the single member of the LLC is a partnership that elected under IRC 761 to be excluded from some or all of the partnership tax rules, the LLC must file the return on or before April 15.

(11) If the single member of the LLC is not described in (1) through (10), the LLC must file the return on or before August 31.

(12) An LLC required to file an information return, as provided for in (1) through (11), may obtain an automatic extension of time to file its information return if its owner has qualified for an extension of time to file a return. The extended due date is the same as the owner's federal extended due date. The LLC is allowed an automatic extension to file its information return for up to six months if the owner is not required to file a federal information return.

(13) An LLC required to file an information return, as provided for in (1) through (11), is subject to a late-filing penalty if:

(a) the Montana disregarded entity information return is not filed by the due date (including extensions); or

(b) a return is filed that does not include all of the following information:

(i) name, address, and social security or federal identification number of each member or other owner during the tax period;

(ii) the LLC's employer identification number, if any;

(iii) any assumed business name(s) the LLC has registered with the Montana Secretary of State, under which it conducts any trade, business, or occupation in the state, or under which it holds title to any real or tangible personal property in the state;

(iv) the state, country, and date of formation of the LLC and, if the LLC was formed in another state or country, the date the LLC registered with the Secretary of State; and

(v) the LLC's Montana source income, gain, loss, deduction, or credit.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-30-3302, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15; AMD, 2017 MAR p. 2094, Eff. 11/10/17.

Mont. Admin. R. 42.9.502 Disregarded Entities – Sourcing Gain or Loss on the Sale of an Interest

(1) Gain on the sale of an interest in a single member limited liability company (LLC) that is a disregarded entity is sourced to Montana as if the single member LLC did not exist and the assets of the LLC are owned directly by the sole member (or sole member and spouse, if applicable). The following example illustrates how this rule is applied:

(a) Nonresident individual C is the sole member of LLC D. LLC D is a single member LLC that is disregarded as a separate entity for tax purposes. LLC D's only asset is rental property located in Montana. If nonresident individual C sells his interest in LLC D, the transaction is sourced to Montana in the same way that the gain would be sourced if C owned LLC D's assets directly and sold them.

History

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-30-2101, 15-30-2110, 15-30-3302, 15-30-3311, MCA
History: NEW, 2011 MAR p. 2679, Eff. 12/9/11.

Mont. Admin. R. 42.9.510 Pass-Through Entity Information Returns for Partnerships Electing Irc 761

(1) Any entity that has Montana source income, that elects under IRC 761 to be excluded from application of some or all of the partnership tax rules on or after January 1, 2003, must file a Montana Form DER-1 on or before the 15th day of the fourth month following the close of the annual accounting period of the owners.

(2) An entity required to file an information return provided in (1) can obtain an automatic extension of time to file its information return if its owner has qualified for extension of time to file a return. The extended due date is the same as the owner's federal extended due date. The entity is allowed an automatic extension to file its information return of up to six months if the owners are not required to file a federal information return.

(3) A disregarded entity required to file the information returns provided in (1) is subject to a late-filing penalty if:

(a) the Montana disregarded entity information return is not filed by the due date (including extensions); or

(b) a return is filed that does not include all of the following information:

(i) name, address, and social security or federal identification number of each partner, member, or other owner;

(ii) the date of the election and the internal revenue district (or service center serving the district) where the election was filed;

(iii) any assumed business name(s) the disregarded entity has registered with the Montana Secretary of State, under which it conducts any trade, business, or occupation in the state, or under which it holds title to any real or tangible personal property in the state; and

(iv) if the disregarded entity is a limited liability company, limited liability partnership, limited partnership, or any other unincorporated entity formed under the laws of Montana or any other state or country, the state, county, and date of formation.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-30-3302, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.520 Pass-Through Entity Information Returns for Qualified Subchapter S Subsidiaries

(1) Any corporation described in IRC 1361(b)(3) whose parent elects to treat as a qualified subchapter S subsidiary on or after January 1, 2003, and that has Montana source income, must file a Montana Form DER-1 on or before the 15th day of the third month following the close of the parent S corporation's annual accounting period.

(2) A corporation required to file an information return provided in (1) can obtain an automatic extension of time to file its information return if its owner has qualified for an extension of time to file a return. The extended due date is the same as the owner's federal extended due date. The corporation is allowed an automatic extension to file its information return of up to six months if the owner is not required to file a federal information return.

(3) A corporation required to file the information returns provided in (1) is subject to a late-filing penalty if:

(a) the Montana disregarded entity information return is not filed by the due date (including extensions); or

(b) a return is filed that does not include all of the following information:

(i) name, address, and federal identification number of its S corporation parent;

(ii) the date of the election and the internal revenue district (or service center serving the district) where the election was filed;

(iii) any assumed business name(s) the qualified subchapter S subsidiary has registered with the Montana Secretary of State, under which it conducts any trade, business, or occupation in the state, or under which it holds title to any real or tangible personal property in the state; and

(iv) the state, country, and date of its incorporation.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-30-3302, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2013 MAR p. 428, Eff. 3/29/13; AMD, 2015 MAR p. 2152, Eff. 12/11/15.

Mont. Admin. R. 42.9.530 Pass-Through Entity Information Returns for Qualified Reit Subsidiaries

(1) Any corporation defined as a qualified REIT subsidiary in IRC 856(i)(2) that has Montana source income and the assets, liabilities, and items of income, deduction, and credit of which are included in the federal income tax return of its parent REIT, must file a Montana Form DER-1, on or before the due date of its parent REIT's information return.

(2) A qualified REIT subsidiary is subject to a late-filing penalty if:

(a) the Montana disregarded entity information return is not filed by the due date (including extensions); or

(b) a return is filed that does not include all of the following information:

(i) name, address, and federal identification number of its REIT parent;

(ii) any assumed business name(s) the qualified REIT subsidiary has registered with the Montana Secretary of State, under which it conducts any trade, business, or occupation in the state, or under which it holds title to any real or tangible personal property in the state;

(iii) the state, country, and date of its incorporation; and

(iv) its Montana source income, deductions, and credits.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-30-3302, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2013 MAR p. 428, Eff. 3/29/13.

Mont. Admin. R. 42.9.540 Pass-Through Entity Returns for Remic

(1) Every unincorporated Real Estate Mortgage Investment Conduit (REMIC) described in IRC 860D, that has Montana source income, must file a copy of its form 1066, federal Real Estate Mortgage Investment Conduit Income Tax Return on or before the due date (including extensions) for filing its federal return.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, 15-31-101, 15-31-111, MCA
History: NEW, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 MAR p. 174, Eff. 1/15/10.

Chapter 42.10 Collections

Subchapter 42.10.5 Debt Collection Services on Behalf of Other Agencies

Mont. Admin. R. 42.10.501 Definitions

The following definitions apply to terms found in this subchapter:

(1) "Collection methods" means any action taken in an attempt to collect on a debt, including but not limited to making a demand for payment, issuing collection notices, obtaining a judgment, and levying wages and bank accounts.

(2) "Criteria for uncollectibility" means an agency's written standards stating the collection methods that must occur in order for the agency to determine that the debt is uncollectible.

(3) "Form CB-1" means the department's Request for Informal Review form, which is available at the department's website at www.mtrevenue.gov , for use by a person to file a written objection with the department concerning the transfer of a debt to the department or the department's collection of a debt.

(4) "Form CB-2" means the department's Notice of Referral to the Office of Dispute Resolution form, which is available at the department's website at www.mtrevenue.gov , for use by a person to appeal an informal review determination to the department's Office of Dispute Resolution (ODR).

(5) "Unliquidated debt" means a debt where the amount is unassessed, unsettled, or disputed.

(6) "Write off" means to remove the debt from accounts receivable.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 15-1-211, 17-4-101, 17-4-104, 17-4-105, 17-4-106, 17-4-107, 17-4-108, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14; AMD, 2021 MAR p. 1963, Eff. 12/24/21.

Mont. Admin. R. 42.10.502 Agency's Submission of Debts to Department

(1) Prior to submitting any debt to the department for collection services, the agency shall:

(a) enter into a memorandum of understanding with the department addressing debt collection services; and

(b) establish criteria for uncollectibility and provide that criteria to the department.

(2) The agency shall not submit to the department any unliquidated debts.

(3) The agency must have followed its internal policies and procedures regarding debtor notification and dispute resolution on any debts it submits to the department.

(4) To submit a debt to the department, the agency shall certify the amount of the debt and that the debt is uncollectible in accordance with the agency's criteria for uncollectibility.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 17-4-104, 17-4-109, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14.

Mont. Admin. R. 42.10.503 Department's Review of Submitted Accounts

(1) The department will only accept a debt for collection services if the department determines that the submitting agency has met its criteria for uncollectibility, unless the agency is exempted from this requirement under 17-4-105, MCA. The department will notify the agency of its acceptance or rejection of the debt for collection services.

(2) If the department determines that a submitting agency has not met its criteria for uncollectibility, the department may return the debt to that agency.

(3) Upon the department's request, the submitting agency shall submit all relevant evidence regarding a debt, including but not limited to documentation of the collection methods undertaken by the agency and any information that substantiates the debt.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 17-4-104, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14.

Mont. Admin. R. 42.10.504 Transfer of Debts to Department

(1) Upon the department's acceptance of a debt for collection services, the debt is transferred to the department.

(2) Once a debt has been transferred to the department, the submitting agency shall:

(a) write off the debt;

(b) cease all collection activities on the debt;

(d) update the department with any information received relating to the debt, including notification that the debtor filed for bankruptcy or has new contact information.

(3) If the submitting agency receives payment on a debt that has been collected in full, the agency shall refund the overpayment to the debtor.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 17-4-104, 17-4-105, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14.

Mont. Admin. R. 42.10.505 Debtor Appeals on Validity of Transfer of Debt

(1) The department shall notify a debtor that another agency has transferred a debt to the department for collection services. The notice of transfer shall identify the debt and provide:

(a) a statement that the department intends to undertake collection activities;

(b) payment information;

(d) the debtor's appeal rights as set forth in (2) through (4).

(2) To object to the transfer of the debt from the agency to the department, the debtor must submit a written request stating the basis of the debtor's objection within 30 days of the date on the notice of transfer. Written objections may be submitted on Form CB-1, by letter sent through U.S. mail or other generally accepted delivery service, or as electronic mail to the department's email address provided on the notice of transfer. The objection must be postmarked or electronically date stamped within 30 days of the date on the notice of transfer. Failure to timely submit a written objection shall be deemed an admission that the debtor agrees that the debt stated in the notice of transfer is due and owing.

(3) The department shall review the objection and shall mail written notice to the debtor advising the debtor of the department's determination within 30 days after receipt of the objection. If the department concurs with the debtor's objection, the department will return the debt to the submitting agency. If the department disagrees with the debtor, the department shall explain the reasons for the disagreement, notify the debtor that the department's determination may be appealed to the Office of Dispute Resolution, and provide a copy of Form CB-2. The department shall also notify the debtor that the debtor must submit a Form CB-2 or other written objection to the department within 30 days of the date on the department's determination, and that the debtor will forfeit the right to a hearing if the debtor fails to submit Form CB-2 or other written objection within the 30-day period.

(4) If the debtor disagrees with the department's determination, the debtor must submit a Form CB-2 or other written objection within 30 days of the date on the department's determination to request a hearing before the Office of Dispute Resolution. Objections should be mailed to the Department of Revenue, Office of Dispute Resolution, P.O. Box 5805, Helena, Montana 59604 or e-mailed to dordisputeresolution@mt.gov. The objection must be postmarked or electronically date stamped within 30 days of the date on the department's determination. Failure of the debtor to file a timely appeal shall be deemed an admission that the debtor agrees that the debt stated in the notice of transfer is due and owing.

(5) Deadlines may be extended if both parties agree.

(6) Hearings conducted pursuant to this rule are limited to whether the transfer of the debt from the agency to the department was valid. The department shall not make any determination regarding the validity of the underlying debt. If the debtor's objection to the debt transfer includes a challenge to the validity of the underlying debt, the department may return the debt to the submitting agency. The debtor is not entitled to a hearing on the validity of the debt if the debt has been the subject matter of any proceeding to determine the validity of the debt and a decision made as a result of that proceeding has become final.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 15-1-211, 17-4-105, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14; AMD, 2021 MAR p. 1963, Eff. 12/24/21.

Mont. Admin. R. 42.10.506 Debtor Appeals on Department's Collections

(1) The department shall notify the debtor when it identifies funds that may be subject to offset. The notice of offset shall identify the debt and funds held and inform the debtor that the department will hold the funds for 30 days pending receipt of an objection. The notice shall also provide the department's contact information, including phone number and mailing address, and the debtor's appeal rights, as provided in (2) through (4).

(2) To object to the potential offset of funds held, the debtor must submit a written request stating the basis of their objection within 30 days of the date on the notice of transfer. Written objections may be submitted on Form CB-1, by letter sent through U.S. mail or other generally accepted delivery service, or as electronic mail to the department's email address provided on the notice of transfer. The objection must be postmarked or electronically date stamped within 30 days of the date on the notice of offset. If the debtor fails to timely submit a written objection, the department will apply the held funds to the debt.

(3) The department shall review the objection and shall mail written notice to the debtor advising them of the department's determination within 30 days after receipt of the objection. If the department concurs with the debtor's objection, the department will release the held funds to the debtor. If the department disagrees with the debtor, the department shall explain the reasons for the disagreement, notify the debtor that the department's determination may be appealed to the Office of Dispute Resolution, and provide a copy of Form CB-2. The department shall also notify the debtor that the debtor must submit a Form CB-2 or other written objection to the department within 30 days of the date on the department's determination, and that the debtor will forfeit the right to a hearing if the debtor fails to submit Form CB-2 or other written objection within the 30-day period.

(4) If the debtor disagrees with the department's determination, the debtor must submit a Form CB-2 or other written objection within 30 days of the date on the department's determination to request a hearing before the Office of Dispute Resolution. Objections should be mailed to the Department of Revenue, Office of Dispute Resolution, P.O. Box 5805, Helena, Montana 59604 or e-mailed to dordisputeresolution@mt.gov. The objection must be postmarked or electronically date stamped within 30 days of the date on the department's determination. If the debtor fails to timely submit a written objection, the department will apply the held funds to the debt.

(5) Deadlines may be extended if both parties agree.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 15-1-211, 17-4-105, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14; AMD, 2021 MAR p. 1963, Eff. 12/24/21.

Mont. Admin. R. 42.10.507 Appeal Hearings

(1) Hearings on debts owed to an agency other than the Department of Public Health and Human Services will be conducted by the department. Such hearings will be conducted pursuant to 15-1-211, MCA, and ARM 42.2.613 through 42.2.621.

(2) Hearings on debts owed to the Department of Public Health and Human Services will be conducted by that agency.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 15-1-211, 17-4-105, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14.

Mont. Admin. R. 42.10.508 Write Off of Agency Debt by Department

(1) Upon determining that a transferred debt is uncollectible or that the cost of continued collection activities would exceed the amount of debt, the department shall write off the debt and cease collection activities.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 17-4-107, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14.

Mont. Admin. R. 42.10.509 Collection Services Fee

(1) The department shall collect a service fee for the cost of collections. Any payment the department receives will first be applied to the collections service fee and then to the transferred debt. Any payment the submitting agency receives on a transferred debt is also subject to the collections service fee.

History

Authorizing statute(s): 15-1-201, 17-4-110, MCA
Implementing statute(s): 17-4-103, 17-4-106, MCA
History: NEW, 2014 MAR p. 229, Eff. 1/31/14.

Chapter 42.11 Agency Liquor Stores and Vendors

Subchapter 42.11.1 General Provisions

Mont. Admin. R. 42.11.101 Business Hours for State Liquor Store

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-2-104, MCA
History: NEW, Eff. 11/3/75; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.11.102 Licensee's Agent for Liquor Purchases

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-303, MCA
History: NEW, Eff. 11/3/75; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.11.103 Replacement of Defective Liquors

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1979 MAR p. 1120, Eff. 9/28/79; REP, 1996 MAR p. 1161, Eff. 4/26/96.

Mont. Admin. R. 42.11.104 Calculation of Posted Price

(1) The posted price of liquor is determined by:

(a) adding:

(i) the wholesale price as set forth in (2);

(ii) the liquor excise tax as determined under 16-1-401, MCA; and

(iii) the liquor license tax as determined under 16-1-404, MCA;

(b) dividing the total from (a) by the number of individual units within the case; and

(2) The wholesale price is determined by:

(a) adding:

(i) the vendor's current quoted price per case; and

(ii) the department's current freight rate per case to agency liquor stores; and

(b) multiplying the total from (a) by the state markup as set forth in (3).

(3) Unless a vendor qualifies for a reduced state markup under ARM 42.11.106, the state markup is as follows:

(a) 40.5 percent on any liquor other than fortified or sacramental wine;

(b) 51 percent on fortified wine containing more than 16 but no greater than 24 percent alcohol by volume; and

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-302, 16-1-404, MCA
History: NEW, 1982 MAR p. 1693, Eff. 9/17/82; AMD, 1987 MAR p. 705, Eff. 5/29/87; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.105 Definitions

The following definitions apply to subchapters 1, 2, and 4:

(1) "Bailment" means the product at the state liquor warehouse that is owned by the vendor.

(2) "Consumer advertising specialties" are items designed to be carried away by the consumer, including trading stamps, nonalcoholic mixers, pouring racks, ashtrays, bottle openers, cork screws, shopping bags, matches, pamphlets, pencils, shirts, caps, and visors.

(3) "Discontinued product" means a product that is no longer available to the state.

(4) "Point-of-sale advertising materials" are items designed to be used within a retail establishment to attract consumer attention to the product, including posters, placards, designs, inside signs, window decorations, trays, coasters, mats, menu cards, meal checks, paper napkins, foam scrapers, back bar mats, thermometers, clocks, calendars, and alcoholic beverage menus.

(5) "Primary packaging" means the container that holds the alcoholic beverage, including aluminum cans, glass bottles, and a box containing a plastic bladder or other soft flexible container.

(6) "Product" means a liquor item, identified by a unique identification number or stock-keeping unit.

(7) "Promote" means to undertake efforts with the intention of increasing sales or public awareness of a product or distiller, including soliciting product orders from agency liquor store agents and retail licensees, disseminating product information or promotional materials, and distributing product samples.

(8) "Registered vendor representative" means an individual registered, as provided by these rules, to promote a vendor's product in Montana.

(9) "Regular product" means product that:

(a) is among the highest-selling 1,300 products in the state based on case sales in the 12-month period prior to the department's quarterly review where sales are not erratic or based upon closeout or overstock;

(b) is available year-round; and

(10) "Seasonal product" means a product that is only available during certain times of the year.

(11) "Special order product" means a product that does not meet the criteria to be classified as a regular product.

(12) "State liquor warehouse" means the designated building in Helena where product is received and stored and from which product is shipped to agency liquor stores.

(13) "Vendor" means a party that sells product to the department and to which the department makes payment for product depleted from the vendor's bailment inventory held at the state liquor warehouse.

(14) "Vendor permit" means a permit issued to a vendor entitling the vendor to promote its products in Montana through registered vendor representatives.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-302, MCA
History: NEW, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2011 MAR p. 2296, Eff. 10/28/11; AMD, 2013 MAR p. 176, Eff. 2/1/13; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.106 Reduction in State Markup for Distilleries at or Below 25,000 Proof Gallons

(1) For purposes of applying 16-2-211, MCA, a reduced markup rate of 20 percent will be applied to all liquor products acquired from a distillery that manufactures, distills, rectifies, bottles, or processes 25,000 proof gallons or less of liquor nationwide annually.

(2) The 20 percent reduced markup rate is determined using a 100 percent reduction in markup after agency liquor store commissions and the costs to operate the state liquor warehouse have been accounted for. These costs account for approximately half of the standard markup normally collected on product sold by the department. The department will annually review the associated agency liquor store commissions and the costs to operate the state liquor warehouse to ensure these costs do not exceed the reduced markup. The department will publish any adjustments to the reduced markup based on the results of the annual review.

(3) A distillery requesting a reduction in the state markup must certify with a sworn statement, on a form supplied by the department, that the number of proof gallons they have manufactured, distilled, rectified, bottled, or processed nationwide annually is at or below the 25,000 proof gallon threshold. A distillery requesting a reduced markup rate must submit this form and meet the specified requirements at the time of initially registering with the department and by February 15 of each of the following calendar years in order to receive the reduced markup rate.

(4) Failure to submit the form described in (3) to the department each year by February 15 will result in a 40.5 percent markup rate for liquor products, 20 percent for sacramental wine products, and 51 percent for fortified wine products. The effective date of any changes in a distillery's markup rate will coincide with the publication date of the next quarterly price book.

(5) Each new liquor product a vendor introduces will be assigned the distillery's current applicable markup rate.

(6) The department may request and examine any distillery's books and records for the purpose of determining the accuracy of the total number of proof gallons reported by the distillery.

(7) For the purpose of this rule, a distillery is considered a vendor.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-211, MCA
History: NEW, 2011 MAR p. 2296, Eff. 10/28/11; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.111 State Stamp

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-2-102 and 16-3-102, MCA
History: NEW, Eff. 11/3/75; REP, 1983 MAR p. 1928, Eff. 12/30/83.

Mont. Admin. R. 42.11.112 Division Shipment Orders -- Exceptions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-302, 16-1-303, and 16-1-304, MCA
History: NEW, Eff. 11/3/75; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.11.113 Shipping Labels

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-302 and 16-1-303, MCA
History: NEW, Eff. 11/3/75; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.11.114 Shipping Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-302 and 16-1-303, MCA
History: NEW, Eff. 11/3/75; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Subchapter 42.11.2 Liquor Vendors

Mont. Admin. R. 42.11.201 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-107, MCA
History: NEW, Eff. 9/4/75; AMD, Eff. 1/3/76; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR. p. 2899, Eff. 12/25/03; REP, 2007 MAR p. 478, Eff. 4/13/07.

Mont. Admin. R. 42.11.205 Vendors' Employment of Representatives

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-107, MCA
History: NEW, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; REP, 2014 MAR p. 2793, Eff. 11/7/14.

Mont. Admin. R. 42.11.211 Vendor Representatives

(1) A vendor seeking to promote product must do so through registered vendor representatives. A vendor is not required to register individuals who only promote product at the distiller's licensed premises. The vendor must also obtain a vendor permit pursuant to ARM 42.11.213.

(2) An electronic application and the registration fee must be submitted for each applicant seeking to represent a vendor.

(3) The department shall approve an application upon determining that the applicant:

(a) possesses no ownership interest in any Montana alcoholic beverage retail license or an agency liquor store;

(b) is 21 years of age or older; and

(4) A representative's registration is effective upon the department's approval of the application. All registrations expire on September 30 of each year.

(5) A representative seeking registration renewal shall submit an electronic renewal application and the vendor representative registration fee on or before September 1 of each year.

(6) The department shall cancel the registration of a vendor's representative if requested in writing by the vendor.

(7) The annual registration fee for each applicant is $50. This fee must be paid when the applicant first seeks approval to represent a vendor and upon each renewal of the registration thereafter.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-107, MCA
History: NEW, Eff. 9/4/75; AMD, Eff. 1/3/76; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2013 MAR p. 176, Eff. 2/1/13; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.212 Restriction on Number of Representatives

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-107, MCA
History: NEW, Eff. 9/4/75; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 2003 MAR p. 2899, Eff. 12/25/03; REP, 2014 MAR p. 2793, Eff. 11/7/14.

Mont. Admin. R. 42.11.213 Vendor Permit

(1) A vendor seeking to promote the sale of its liquor in Montana shall obtain a vendor permit from the department and employ at least one representative pursuant to ARM 42.11.211.

(2) An applicant for a vendor permit must submit an electronic application and the vendor permit fee.

(3) The department shall deny an application upon determining that the applicant possesses an ownership interest in any Montana alcoholic beverage retail license or state agency liquor store.

(4) A vendor permit is effective upon the department's approval of the application. All vendor permits expire on September 30 of each year.

(5) A vendor seeking renewal of its vendor permit shall submit an electronic renewal application and the vendor permit fee on or before September 1 of each year.

(6) The annual vendor permit fee is based upon the total number of cases the vendor sold to the department during the preceding fiscal year (July 1 to June 30) as follows:

(a) 0-24 cases = no charge;

(b) 25-100 cases = $100;

(d) 1,001 - 2,000 cases = $300; and

(e) 2,001 or more cases = $400.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.214 Permit and Registration Fees

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, Eff. 1/3/76; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; REP, 2014 MAR p. 2793, Eff. 11/7/14.

Mont. Admin. R. 42.11.215 Expiration and Renewal of Registration

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, Eff. 1/3/76; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; REP, 2014 MAR p. 2793, Eff. 11/7/14.

Mont. Admin. R. 42.11.216 Refusal of Registration

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; REP, 1985 MAR p. 165, Eff. 2/15/85.

Mont. Admin. R. 42.11.217 Cancellation of Registration

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-3-107, MCA
History: NEW, Eff. 9/4/75; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2003 MAR p. 2899, Eff. 12/25/03; REP, 2014 MAR p. 2793, Eff. 11/7/14.

Mont. Admin. R. 42.11.231 Vendor Identification Cards

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; REP, 1985 MAR p. 165, Eff. 2/15/85.

Mont. Admin. R. 42.11.232 Representative Identification Cards

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.11.241 Privileges of Registered Agents

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; REP, 1985 MAR p. 165, Eff. 2/15/85.

Mont. Admin. R. 42.11.242 Information on State Liquor Store Inventories

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1979 MAR p. 1120, Eff. 9/28/79; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.11.243 Samples

(1) The distribution of samples in Montana may only be conducted as follows:

(a) the vendor must hold a current vendor permit as required under ARM 42.11.213;

(b) the vendor representative must be registered as required under ARM 42.11.211;

(c) except as provided for in 16-4-311, MCA, the vendor must ship the samples to the state liquor warehouse at no charge to the department;

(d) an agency liquor store may only sell samples to a registered vendor representative and the cost shall be $12.00 per case; and

(e) only registered vendor representatives may provide samples.

(2) Each vendor is subject to an annual sample limitation of 200 liters per product. Samples are limited to primary packaging containing no more than 750 milliliters. If a vendor does not produce a product in a size of 750 milliliters or less, the next largest size may be substituted.

(3) For samples to be removed from bailment, the vendor must submit a request on a form provided by the department at least seven days prior to the requested ship date.

(4) A registered vendor representative may only provide samples as follows:

(a) samples may only be provided to licensed all-beverage retailers or agency liquor store agents;

(b) samples may not be provided to an all-beverage retailer or agency liquor store that purchased the product within the previous 12 months; and

(5) Samples may not be consumed on the premises of an agency liquor store.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-107, MCA
History: NEW, Eff. 9/4/75; AMD, 1979 MAR p. 1119, Eff. 9/28/79; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 1996 MAR p. 3146, Eff. 12/6/96; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.244 Records Related to Samples -- Department Examinations

(1) Each registered representative shall maintain a permanent sample log which must contain a listing of all sample purchases, the name and location of each recipient, and the date the sample was received.

(2) The department may, at any reasonable time and place, examine the records of a registered representative. For the purposes of this rule, reasonable time and place means normal business hours at the representative's place of business.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1979 MAR p. 1119, Eff. 9/28/79; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 1998 MAR p. 2088, Eff. 7/31/98.

Mont. Admin. R. 42.11.245 Advertising Specialties

(1) Registered vendor representatives may distribute point-of-sale advertising materials and consumer advertising specialties to a retailer as set forth in Title 27 of the Code of Federal Regulations, regulation number 6.84. Copies may be obtained at www.ttb.gov .

(2) Registered vendor representatives may not directly or indirectly pay or credit the retailer for using these materials.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1979 MAR p. 1120, Eff. 9/28/79; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2013 MAR p. 176, Eff. 2/1/13; AMD, 2013 MAR p. 2444, Eff. 12/27/13; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.251 Unlawful Acts

(1) Sections 16-1-304, 16-2-105, 16-3-101, 16-3-103, 16-6-104, and 16-6-301, MCA, provide that certain practices in connection with the sale of alcoholic beverages shall be unlawful. All vendors and registered vendor representatives shall be familiar with and abide by these statutes.

(2) Although not limiting the scope of the statutory provisions, and with the exception of the consumer advertising specialties stated in ARM 42.11.245, the following practices are prohibited:

(a) to grant, allow, pay, or rebate merchandise or any other thing of value to any licensee, state liquor store agent or anyone affiliated with either, including the purchase of merchandise at retail for delivery to a licensee;

(b) to grant, allow, or pay anything of value to a licensee, state liquor store agent, or anyone affiliated with either, for the privilege of displaying advertising;

(d) to induce department personnel to promote the sale of a product. This prohibition does not apply to discussions between vendors or registered vendor representatives and department employees with regard to the department's purchase of liquor;

(e) to grant, allow, or pay money or anything of substantial value to licensees or their agents or employees to induce the sale of a product;

(f) to represent, expressly or by implication, that a vendor or registered vendor representative is affiliated with or has any influence over any department of the state government; or

(g) to repurchase, replace, or exchange any product purchased by licensees or other persons from agency liquor stores.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-304, 16-2-105, 16-3-101, 16-3-103, 16-6-104, 16-6-301, MCA
History: NEW, Eff. 9/4/75; AMD, 1979 MAR p. 1120, Eff. 9/28/79; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.252 Revocation or Suspension of Permits or Registrations

(1) The department may, after notice and opportunity for hearing in conformity with the provisions of the Montana Administrative Procedure Act, deny, suspend, or revoke a vendor's permit or representative's registration if it determines that the vendor or representative has violated any provision of the Montana Alcoholic Beverage Code or administrative rule of Montana relating to alcoholic beverages, or upon any other reasonable cause shown.

(2) A vendor or representative whose permit or registration has been denied or revoked is ineligible to hold any permit or registration under this chapter, any other rule of the department or any law of Montana relating to liquor for a period up to three years from the date the permit or registration was denied or revoked.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-103, MCA
History: NEW, Eff. 9/4/75; AMD, 1985 MAR p. 165, Eff. 2/15/85; AMD, 1987 MAR p. 1795, Eff. 10/16/87.

Subchapter 42.11.3 Operating Agency Liquor Stores

Mont. Admin. R. 42.11.301 Definitions

As used in this subchapter, the following definitions apply:

(1) "Adult" means a person 18 years of age or older.

(2) "Agency liquor store" means a liquor store operated by an agent.

(3) "Agent" means a person or entity authorized under an agency franchise agreement with the department to operate an agency liquor store.

(4) "Community boundary" means:

(a) in the case of an incorporated city or town, the city or town limits; and

(b) in other communities, the area identified by the United States Census Bureau as a community for census purposes.

(5) "Minimum qualified petitioners" means the number of adults who reside in the community, which equals 5 percent of the community population as determined in the most recently available census estimate for the community or 20 adults who reside in the community if 5 percent of the community population is less than 20.

(6) "New agency liquor store" means an agency liquor store that begins operation in a community that has not had an agency liquor store in operation for one or more years or is eligible for an additional agency liquor store.

(7) "Public hearing" is a public meeting to solicit public comments and is not an administrative adjudication between opposing parties.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, MCA
History: NEW, 1987 MAR p. 1798, Eff. 10/16/87; AMD, 1993 MAR p. 2418, Eff. 10/15/93; AMD, 1998 MAR p. 2498, Eff. 9/11/98; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2012 MAR p. 2631, Eff. 12/21/12; AMD, 2015 MAR p. 2162, Eff. 2/1/16.

Mont. Admin. R. 42.11.302 Conversion to Agency Store

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-2-101, MCA
History: NEW, 1987 MAR p. 1798, Eff. 10/16/87; REP, 1996 MAR p. 1161, Eff. 4/26/96.

Mont. Admin. R. 42.11.303 Selection of Agent

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-2-101, MCA
History: NEW, 1987 MAR p. 1798, Eff. 10/16/87; REP, 1996 MAR p. 1161, Eff. 4/26/96.

Mont. Admin. R. 42.11.304 Closure of a State Liquor Store

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-2-101, MCA
History: NEW, 1987 MAR p. 1798, Eff. 10/16/87; REP, 1996 MAR p. 1161, Eff. 4/26/96.

Mont. Admin. R. 42.11.305 Opening a New Agency Liquor Store

(1) The number of agency liquor stores that may be located in a community may vary as prescribed in 16-2-109, MCA. For example, there may be no more than:

(a) one agency liquor store if the population is 0 – 12,000;

(b) two agency liquor stores if the population is 12,001 – 52,000;

(d) four agency liquor stores if the population is 92,001 – 132,000; or

(e) five agency liquor stores if the population is 132,001 – 172,000; and

(f) one additional agency liquor store within increments of population of 40,000 inhabitants above 172,000.

(2) The department shall use the most recent data available from the United States Census Bureau to determine a community's population.

(3) A new agency liquor store will be operated by an agent.

(4) The department shall conduct a public hearing to open a new agency liquor store when all of the following conditions are met:

(a) The department receives a petition signed by at least the minimum qualified petitioners to open a new agency liquor store in the community. The petition must clearly state that its purpose is to have the department open a new agency liquor store in the community. The petition must show the printed name, mailing address, and signature of each person signing the petition.

(b) The department receives a letter from a person willing to submit a proposal or bid to operate a new agency liquor store in the community. Agency liquor stores may only be located at premises in which the agent has possessory interest.

(d) The nearest community with an operating agency liquor store is more than 35 miles, as measured from the nearest community boundaries along the shortest route on a paved road between the two communities, unless the new agency liquor store is to be located in a community eligible for more than one agency liquor store pursuant to 16-2-109, MCA.

(e) The department has not solicited for an agent in the community within the previous three years.

(f) The petition identified in (a) and the letter from a potential agent in (b) must be received within six months of each other.

(5) When all of the conditions in (4) are met, the department may hold a public hearing to receive comments from interested parties concerning the department's intention to advertise for proposals or bids for a new agency liquor store. The procedures to determine if a public hearing will be held, and if so, the location of the public hearing are:

(a) the department will publish a notice to the public that will contain the following:

(i) the department's intent to open a new agency liquor store and the community it intends to open it in; and

(ii) an outline of how the public can provide written protests; and

(b) notice of the department's intent will be advertised twice during a two-week period in the legal section of:

(i) the nearest daily newspaper in general circulation for the affected area; and

(ii) in the local community newspaper, if there is one.

(6) If the department receives no written public protests from residents in the county or adjoining counties, the department may solicit to open a new agency liquor store in the proposed community without holding a public hearing.

(7) If the department receives at least one written public protest from residents in the county or adjoining counties, the department shall schedule a public hearing to determine whether the protest presents sufficient cause to deny the request.

(8) If the department receives a specified number of written public protests from residents in the county or adjoining counties, the public hearing will be held in the community in which the new agency liquor store is proposed. The specified number of written public protests from residents shall equal:

(a) a quantity greater than 25 percent of the number of all-beverage licenses determined for that quota area according to 16-4-201, MCA; and

(b) no less than two.

(9) If the provisions in (8) are not met, the hearing will be held in Helena.

(10) If the need for a public hearing is determined, all qualified protesters will be notified of:

(a) the date, time, and place where the public hearing will be conducted; and

(b) the name and address of the hearing officer appointed by the department to conduct the hearing.

(11) The hearing officer will preside over the hearing, which is not a contested case proceeding as defined in 2-4-102, MCA, and collect the information presented. The hearing will address the following:

(a) whether the department should proceed with its intention to advertise for a new agency liquor store for the community;

(b) whether any limitations or restrictions on the location and operation of the new agency liquor store should be considered; and

(c) whether any other issues directly related to the operation of the proposed new agency liquor store in the community or its possible effects on the community should be considered in the department's determination of whether to proceed with its intention to advertise for a new agency liquor store in the community.

(12) Within six weeks following the public hearing, the hearing officer will submit a report to the department. This report will:

(a) identify all issues raised at the hearing;

(b) recommend whether proceeding with the advertisement for a new agency liquor store is in the best interest of the state and the community; and

(c) recommend whether any limitations or restrictions on the location and operation of the new agency liquor store should be considered.

(13) The department shall decide what action will be taken in response to the hearing officer's recommendations within 30 business days of receipt of the hearing officer's report.

(14) Notice of the department's decision will be mailed to all parties who signed the petition, submitted a written protest, or attended the public hearing and provided a mailing address.

(15) If the decision is to proceed with advertising for a new agency liquor store, the agent will be selected by competitive sealed bids according to the procedures under the Montana Procurement Act, Title 18, chapter 4, MCA. To be eligible for consideration, a bid must meet all requirements set forth in the department's notice, including but not limited to an initial commission rate not to exceed 16 percent.

(16) If no bids are received or none of the bids received meet the minimum requirements specified in the request, the department will make no further solicitation for a new agency liquor store in the community for three years. If the conditions in (4) and (5) are met after the three-year period, the department will begin the solicitation process to open a new agency liquor store in the community.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 2-4-102, 16-2-101, 16-2-109, 16-4-201, MCA
History: NEW, 1993 MAR p. 2418, Eff. 10/15/93; AMD, 1998 MAR p. 2498, Eff. 9/11/98; AMD, 2012 MAR p. 2631, Eff. 12/21/12; AMD, 2015 MAR p. 2162, Eff. 12/11/15.

Mont. Admin. R. 42.11.306 Commission Percentage Discount Rate Review

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, MCA
History: NEW, 1998 MAR p. 2498, Eff. 9/11/98; AMD, 2012 MAR p. 2631, Eff. 12/21/12; REP, 2015 MAR p. 2162, Eff. 2/1/16.

Mont. Admin. R. 42.11.307 Volume of Sales Discount Rate Review

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, MCA
History: NEW, 1998 MAR p. 2498, Eff. 9/11/98; AMD, 2012 MAR p. 2631, Eff. 12/21/12; REP, 2015 MAR p. 2162, Eff. 2/1/16.

Mont. Admin. R. 42.11.308 Qualifications for Commission Rate Review

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, MCA
History: NEW, 1998 MAR p. 2498, Eff. 9/11/98; REP, 2012 MAR p. 2631, Eff. 12/21/12.

Mont. Admin. R. 42.11.309 Agent Requested Commission Percentage Discount Rate Review

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, MCA
History: NEW, 1998 MAR p. 2498, Eff. 9/11/98; AMD, 2000 MAR p. 1341, Eff. 5/26/00; AMD, 2012 MAR p. 2631, Eff. 12/21/12; REP, 2015 MAR p. 2162, Eff. 2/1/16.

Mont. Admin. R. 42.11.310 Selection of Agent

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, 16-2-109, 18-4-303, 18-4-304, MCA
History: NEW, 1998 MAR p. 2498, Eff. 9/11/98; AMD, 2012 MAR p. 2631, Eff. 12/21/12; REP, 2015 MAR p. 2162, Eff. 2/1/16.

Mont. Admin. R. 42.11.311 Agency Liquor Store Proximity to Grocery Stores

(1) Agency liquor stores may not be located in or adjacent to grocery stores in communities with populations over 3,000.

(2) The department shall consider a retail establishment to be a grocery store if:

(a) the establishment maintains food inventory with a cost of $5,000 or greater; and

(b) the department determines that the establishment's primary purpose is to sell products other than alcoholic beverages.

(3) An agency liquor store and a grocery store shall not be considered to be adjacent to one another where the stores are located across a street from one another. The department shall consider the agency liquor store and grocery store to be adjacent to one another if:

(a) the agency liquor store and the grocery store share a common internal or external wall; or

(b) there is an absence of a building between the agency liquor store and the grocery store that is owned by a party unrelated to any party with an ownership interest in the grocery store; and

(c) the distance between the nearest exterior wall of the agency liquor store and the grocery store is equal to or less than 100 feet.

(4) The prohibition in (1) does not apply when an agency liquor store was located on the site prior to a grocery store undertaking occupancy adjacent to the agency liquor store.

(5) The definition of a grocery store in (2) and the criteria for stores being adjacent to one another in (3) shall not be applied to determine the location suitability for agency liquor stores that are in operation as of January 1, 2016, unless the agency liquor store elects to relocate or expand an existing store.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-2-101, MCA
History: NEW, 2015 MAR p. 2162, Eff. 12/11/15.

Mont. Admin. R. 42.11.312 Direct Product Deliveries from a Distillery

(1) An agency liquor store may order product directly from a distillery pursuant to 16-4-311, MCA, without notification to the department.

(2) The date of the invoice issued by the department for product an agency liquor store receives directly from a distillery shall be the date of delivery.

(3) The agency liquor store shall maintain at its place of business a copy of the signed bill of lading provided by the distillery for each delivery.

(4) The agency liquor store shall notify the distillery of any deficient or defective product received. If adjustment of the invoice issued by the department is necessary, the agency liquor store shall notify the department within six months of the invoice date.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-311, MCA
History: NEW, 2015 MAR p. 2162, Eff. 1/1/16.

Subchapter 42.11.4 Purchasing and Distribution

Mont. Admin. R. 42.11.401 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-104, 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; REP, 2007 MAR p. 478, Eff. 4/13/07.

Mont. Admin. R. 42.11.402 Inventory Policy

(1) Liquor products that can be obtained without substantial inventory investment to the department will be made available for sale to state agency liquor stores based on historical demand.

(2) Each product a vendor seeks to sell in Montana must be approved by the department. In order to consider the product for approval, the department must receive a picture copy of the product's primary packaging.

(3) Liquor products are a mature product category, restricted by law to only consumers age 21 or older and who are not intoxicated, and therefore should be marketed in a responsible and appropriate manner. The department, in its discretion and on a case-by-case basis, will not approve a liquor product that:

(a) blurs the distinction between an alcoholic and nonalcoholic product by utilizing labeling and/or primary packaging that emphasize features that are most commonly associated with nonalcoholic consumable products including, but not limited to:

(i) aerosol cans; or

(ii) hollow candies;

(b) uses flavors that are designed to target or particularly appeal to underage persons, such as:

(i) bubble gum; or

(ii) cotton candy;

(i) are designed to target or particularly appeal to underage persons;

(ii) minimizes, fails to identify, or disguises that the product contains alcohol; or

(iii) alludes to or suggests irresponsible, excessive, or underage consumption;

(d) requires specialized handling requirements such as frozen or refrigerated products; or

(e) is in powdered or crystalline form.

(4) Products will not be made available in the state of Montana through the state liquor warehouse if the container, flavor, label, or advertising contains inappropriate or illegal content.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-104, 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2013 MAR p. 176, Eff. 2/1/13; AMD, 2014 MAR p. 2793, Eff. 11/7/14; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.11.405 Product Availability

(1) Liquor products will be made available for sale in the following classifications:

(a) Regular products will be designated in the department's quarterly price book and have sufficient supply maintained in the state liquor warehouse in accordance with ARM 42.11.421. An agent shall give an all-beverage licensee a reduction of eight percent off the posted price for purchasing regular products in unbroken case lots.

(b) Special order products that have sold at least one case in the prior 12 months will be published in the department's quarterly price book. An agent may not give an all-beverage licensee an eight percent discount for purchasing special order products in unbroken case lots.

(i) Inventories will be maintained in the state liquor warehouse in accordance with ARM 42.11.421 on the highest-selling 350 special order products based on case sales in the 12-month period prior to the department's quarterly review.

(ii) Inventories will not be maintained in the state liquor warehouse for all other special order products. These products will be available on an order-by-order basis and, depending on vendor requirements and availability, the order may take six weeks or more to be filled.

(A) A vendor with a vendor permit and at least one registered vendor representative may ship these products to the state liquor warehouse on a promotional contract. To seek approval for the shipment, the vendor must submit the request on a form prescribed by the department. The department shall notify the vendor upon approval. The promotional contract should state:

(I) that the product will be maintained in the state liquor warehouse;

(II) the test market locations proposed for the product and the expected initial order amount;

(III) the promotional strategy that the vendor and the vendor's registered representative will undertake during the six-month promotion period; and

(IV) a return address for excess product at the end of the promotional period.

(B) No additional vendor promotions will be allowed until excess product is removed from the state liquor warehouse. If arrangements have not been made to ship excess product back within 30 days of notification, product will be destroyed at the vendor's expense.

(c) Seasonal products are not published in the department's quarterly price book. The department will notify agency liquor stores when seasonal products become available. An agent may not give an all-beverage licensee an eight percent discount for purchasing seasonal products in unbroken case lots.

(d) Discontinued products are not published in the department's quarterly price book. Discontinued products are available until all inventories have been depleted. An agent is not required to give an all-beverage licensee an eight percent discount for purchasing discontinued products in unbroken case lots. An agent may sell discontinued products to licensees at or below the last price on file with the department and may sell discontinued products at any price to the general public.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, 16-2-201, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.406 Product Listing

(1) Each January, April, July, and October, the department shall classify all products based on the criteria set forth in ARM 42.11.405. Changes in product classification are effective as follows:

(a) January reviews are effective May 1;

(b) April reviews are effective August 1;

(d) October reviews are effective February 1.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.407 Minimum Sales Standards

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-104, 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; REP, 2007 MAR p. 478, Eff. 4/13/07.

Mont. Admin. R. 42.11.408 Product Approval Procedures

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-103, 16-1-104, and 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 1990 MAR p. 1839, Eff. 9/28/90; REP, 1996 MAR p. 1161, Eff. 4/26/96.

Mont. Admin. R. 42.11.409 Revised Listing and Overstock

(1) A product that no longer meets the current criteria in ARM 42.11.405 will be listed in a classification commensurate with its sales volume and effective with the quarterly price book.

(2) Inventory in excess of a historical eight-week case demand for a product will be treated as overstock.

(3) The department shall provide a vendor with written notice of any inventory identified as overstock. The vendor shall remove the overstock from the state liquor warehouse within 30 days of the department's notice. If the vendor fails to remove the overstock by the prescribed date in the notice, the department may, in its discretion, dispose of the overstock or return it to the vendor at the vendor's expense.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-104, 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; AMD, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2013 MAR p. 176, Eff. 2/1/13; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.420 Transitional Rule

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-103, 16-1-104, and 16-1-302, MCA
History: NEW, 1988 MAR p. 87, Eff. 1/15/88; REP, 1990 MAR p. 1839, Eff. 9/28/90.

Mont. Admin. R. 42.11.421 Bailment Limits

(1) Vendors shall supply the state liquor warehouse with regular products and maintained special order products in an amount above the minimum level and below the maximum level as set forth in (2) and (3).

(2) The minimum level is a historical three-week case demand. The historical three-week case demand is calculated by taking the product's sales from the previous 12 months and dividing by 52 to obtain a weekly demand. This figure is then multiplied by three to obtain a three-week demand.

(3) The maximum level is a historical eight-week case demand. The historical eight-week case demand is calculated by taking the product's sales from the previous 12 months and dividing by 52 to obtain a weekly demand. This figure is then multiplied by eight to obtain an eight-week demand. The maximum level may be exceeded if a vendor demonstrates to the department's satisfaction that a larger amount is needed to meet a sales forecast or to obtain an economical shipment.

(4) Vendors will be charged a bailment fee equivalent to one dollar per case based on a historical three-week case demand for each day a regular product is out of stock. A bailment fee will not be charged if the unavailability of supply is due to an incident beyond the vendor's control or it is based on department error.

(5) Vendors shall honor a product's sale price for agency liquor store orders that were not filled during a sale month due to insufficient inventory.

(6) Fees and credits will be offset against the department's payment for products.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.422 Bailment Receivings

(1) Vendors shall provide the department a bill of lading for each shipment to the state liquor warehouse by fax or e-mail ten days in advance of the expected date of arrival. The bill of lading must include the quantity, the National Alcoholic Beverage Control Association control state code, and a description of each product shipped.

(2) The department shall send vendors an acknowledgement of receipt within 24 hours noting any variance from the bill of lading.

(3) The number of cases received per product will be credited to the vendor's bailment inventory.

(4) Damaged cases will be adjusted from the vendor's bailment inventory.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.423 Bailment Depletions

(1) The department may deplete products from the vendor's bailment inventory if the department is purchasing the product.

(2) The department shall pay the vendor for products purchased within 15 days from the close of the month as follows:

(a) for regular products, the department shall pay the vendor the price stated on the standard price quotation form submitted for publication in the most recent quarterly price book;

(b) for special order, seasonal, and discontinued products, the department shall pay the price currently on file with the department; and

(3) For regular products, vendors shall submit the standard price quotation form not less than 75 days prior to the publication of the department's quarterly price book.

(4) The number of cases depleted per product will be debited from the vendor's bailment inventory, and upon request, a vendor shall be notified weekly of the amount and date the products were depleted.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2011 MAR p. 451, Eff. 3/25/11; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.424 Bailment Adjustments

(1) A vendor's bailment inventory will be adjusted for withdrawals, purchases, deliveries, defective merchandise, destructions, and errors.

(2) Vendors may withdraw their products from the state liquor warehouse by sending a written request to the department.

(3) Upon request, the department shall notify a vendor weekly of the number of cases credited to the vendor's bailment inventory that were deficient or defective, (e.g., hidden breakage, packed short, or bottles with no fill or low fill). A vendor may ask the department to return or destroy defective cases at the vendor's cost.

(4) Upon request, the department shall notify a vendor weekly of the number of cases credited or debited to the vendor's bailment inventory in error and an explanation of the errors.

(5) The department may charge a vendor for reasonable costs associated with handling the vendor's products at the state liquor warehouse beyond the normal receipt, storage, and shipping of products. Handling includes, but is not limited to, affixing labels on cases, repackaging cases, restacking cases, destroying product, and assembling product for return. Charges will be offset against the department's payment for products.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2015 MAR p. 2093, Eff. 11/26/15; AMD, 2020 MAR p. 1745, Eff. 9/26/20.

Mont. Admin. R. 42.11.425 State Liquor Warehouse Management

(1) Only department personnel are authorized to handle products in the state liquor warehouse.

(2) Vendors may arrange with the department for the temporary transfer of selected cases of product to a work area within the state liquor warehouse. Vendors or registered vendor representatives may inspect or modify cases of their product in the work area. The department must approve any modifications that may affect the vendor's bailment inventory. Vendors will be charged the direct and indirect costs the department incurs for transferring cases to and from the work area.

(3) Vendors and registered vendor representatives may request to observe the operation of the state liquor warehouse at any time during regular working hours.

(4) While on a visit to the state liquor warehouse, vendors and registered vendor representatives must observe all safety rules.

(5) The department will take physical inventory in the state liquor warehouse four times a year and reconcile the vendor's bailment inventory.

History

Authorizing statute(s): 16-1-103, 16-1-303, MCA
Implementing statute(s): 16-1-103, 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01; AMD, 2003 MAR p. 2899, Eff. 12/25/03; AMD, 2007 MAR p. 478, Eff. 4/13/07; AMD, 2015 MAR p. 2093, Eff. 11/26/15.

Mont. Admin. R. 42.11.426 Bailment Disputes

(1) If a vendor disputes any department decision under ARM 42.11.421 through 42.11.425, the vendor and the department will attempt to resolve the dispute informally.

(2) If an informal resolution is not successful, a vendor may contest the decision in accordance with the provisions for contested cases in the Montana Administrative Procedure Act.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-103, 16-1-104, and 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; AMD, 2001 MAR p. 348, Eff. 2/23/01.

Mont. Admin. R. 42.11.427 Bailment Transition Rule

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-103, 16-1-104, and 16-1-302, MCA
History: NEW, 1990 MAR p. 1839, Eff. 9/28/90; REP, 1996 MAR p. 1161, Eff. 4/26/96.

Chapter 42.12 Liquor Licenses and Permits

Subchapter 42.12.1 License Applications

Mont. Admin. R. 42.12.101 Application for License

(1) All applications for licenses to sell, manufacture, or distribute alcoholic beverages shall be made to the department upon forms supplied by the department or through the department's licensing portal. An abbreviated application may be used for license modifications as specified in ARM 42.12.118. In all other cases, the application process specified below shall be followed.

(2) Applications for licenses shall be in the names of all persons who will have an ownership interest in the business to be operated under the license, as required in 16-4-401, MCA.

(3) In addition to the license application, as applicable, the applicant shall submit:

(a) any processing fees required by ARM 42.12.111 and the license fee required by 16-4-420 or 16-4-501, MCA;

(b) a copy of the proposed agreement to transfer an ownership interest;

(d) any source of funding documents including, but not limited to, loan documents, gifting statements, and finance institution statements;

(e) the premises floor plan, which for all license types includes accurate dimensions of the premises, the licensee or applicant's name, alcoholic beverage license number, physical address, and submission date, plus:

(i) for a retail license, illustrates all service areas, stationary drink preparation areas, self-pour devices, storage areas, patios/decks, doors, hallways, stairways, perimeter barriers, drive-through windows, and permanent floor-to-ceiling walls required between the premises and another business;

(ii) for a distributor license, illustrates one or more permanent floor-to-ceiling walls required between the premises and another licensed alcoholic beverage business;

(iii) for a winery, brewery, or distillery license, identifies all manufacturing areas, storage areas, and as applicable: sample room, drink preparation areas, patios/decks, doors, hallways, stairways, perimeter barriers, drive-through windows, and permanent floor-to-ceiling walls required between the premises and another licensed alcoholic beverage business, except as otherwise provided in 16-3-311(8) and (9), MCA; or

(iv) for a colocated license, the respective manufacturing and retail areas are clearly marked with the floor plan criteria provided in (i) and (iii), as applicable, for both licenses.

(f) bank account authorization and signature documents;

(g) proof of assumed business name;

(h) a tax certificate issued by the department under ARM 42.2.402 for the applicant and any individual of the applicant who must meet the requirements of 16-4-401(2)(a), MCA;

(i) two complete sets of fingerprints and a personal history statement for each person identified in 16-4-414, MCA, and ARM 42.12.212;

(j) for any entity applicant:

(i) formation documents such as articles of organization, articles of incorporation, or registration/certificate of partnership. Foreign (non-Montana) entities are also required to provide proof of registration or certificate of authority issued by the Montana Secretary of State;

(ii) stock certificates or other unit ownership certificates that evidence underlying ownership of the entity, as applicable;

(iii) stock ledger or entity ownership register;

(iv) bylaws, operating agreement(s), partnership agreement(s), as applicable; and

(v) organizational meeting minutes, initial resolutions of shareholders, members, partners, as applicable; and

(k) any other documents the department deems reasonably necessary to reach a final decision.

(4) At any time during the application process, an applicant must notify the department of any changes in the information and documents submitted under (3) and promptly provide the department with any corrected or updated information or documents. The department will toll the processing time of the applicant's license application in accordance with 16-4-402, MCA, until the corrected or updated documents are received.

(5) An applicant who does not have a premises ready to operate may apply for an available license pursuant to 16-4-417, MCA. The applicant must electronically apply for the license through the department's licensing portal and submit any applicable information under (3) for the department to review the application. A license issued without an approved premises will be automatically placed on nonuse status by the department.

(6) The department shall determine whether a complete application has been submitted. If a complete application has been submitted, the department shall arrange an investigation of the application and, if applicable, publish the notice of application for a license required by 16-4-207, MCA.

(7) Failure of a licensee to fulfill the requirements of 16-4-417, MCA, shall subject the license to revocation.

(8) The department may waive an application requirement set forth in this rule in its sole discretion.

(9) The disqualification of any applicant to hold the license disqualifies all.

(10) The department may issue a license in its sole discretion. A licensee remains bound by all requirements in statute and rule that apply at the time an application for license or an application for renewal is approved.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-311, 16-4-105, 16-4-201, 16-4-204, 16-4-207, 16-4-210, 16-4-401, 16-4-402, 16-4-414, 16-4-417, 16-4-420, 16-4-501, 16-4-502, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2020 MAR p. 1177, Eff. 6/27/20; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.102 Supporting Documentation -- Public Convenience and Necessity

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-105 and 16-4-203, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; REP, 1998 MAR p. 2088, Eff. 7/31/98.

Mont. Admin. R. 42.12.103 Supporting Documentation -- Entity Applicants

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-203, 16-4-205, 16-4-401, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 434, Eff. 1/29/93; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2012 MAR p. 1846, Eff. 9/21/12; REP, 2014 MAR p. 2980, Eff. 12/12/14.

Mont. Admin. R. 42.12.104 Action Taken with Census Update

(1) Upon receipt of the most recent census taken under the direction of congress, or the most recent population estimates published by the Bureau of the Census, United States Department of Commerce, the Department of Revenue will determine the availability of any alcoholic beverages licenses subject to a quota system. The department will publish notice of increases in the availability of alcoholic beverages licenses subject to a quota limitation if the quota of licenses had previously been filled within 30 days of receipt of both city and county certified census numbers.

(2) In determining the availability of such licenses, the department will utilize only those boundaries that are recognized by the Bureau of the Census.

(3) The department will determine whether a license is available for a license applicant based on the verified census data in the department's possession on the date the department received the application, except when the department has published a notice of availability of a license three months before or after receipt of the application, in which case the verified census data in the department's possession on the date the notice is published shall be used. Census data is verified when the department has confirmation the Federal Census Bureau has declared the census data to be official, the department has calculated the license quotas from the official census data, and the department has placed the revised quotas on file.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-204, MCA
Implementing statute(s): 16-4-105, 16-4-106, 16-4-201, 16-4-203, 16-4-204, 16-4-502, MCA
History: NEW, 1981 MAR p. 689, Eff. 7/17/81; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2018 MAR p. 1613, Eff. 8/11/18.

Mont. Admin. R. 42.12.105 Electronic Submission of Documents and Electronic Signatures

(1) The department may accept electronic submission of certain documents through the licensing portal.

(2) An electronically submitted document is only complete if:

(a) all requested information is provided; and

(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.

(3) By electronically submitting a document, the submitter declares, under the penalty of false swearing, that:

(a) the information submitted is true, correct, and complete; and

(b) the submitter is the applicant, licensee, or an authorized representative of the applicant or licensee.

(4) An electronically submitted document is subject to the same deadlines as a document submitted in paper form.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-402, 45-7-202, MCA
History: NEW, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.106 Definitions

The following definitions apply to this chapter:

(1) "Adjacent to," with regard to alcoholic beverage advertising limitations for premises suitability, means:

(a) the premises share a common internal or external wall with the building at issue; or

(b) there is an absence of another building between the premises and the building at issue; and

(c) the distance between the nearest exterior wall of the premises and the building at issue is equal to or less than 100 feet.

(2) "Affiliation" means relationships wherein:

(a) an entity owns or controls another entity;

(b) entities are under common ownership or control; or

(3) "Alteration" means a structural change or modification to the premises other than a cosmetic change. Examples include adding a patio/deck or removing a half wall.

(4) "Associated business" means a business that is not licensed by the state to keep or sell alcoholic beverages, but has an alcoholic beverages licensed business located within or on the premises owned or controlled by the "associated business." Examples of associated businesses are:

(a) a hotel that is not licensed to keep or sell alcoholic beverages, but leases space in the hotel to a licensee to sell alcoholic beverages; or

(b) a shopping mall that is not licensed to keep or sell alcoholic beverages, but leases space in the mall to a licensee to sell alcoholic beverages.

(5) "Bona fide sale" means a transaction that completely transfers the property to a qualified purchaser for consideration.

(6) "Building" means an enclosed structure with external walls and a roof that meets the requirements of 16-3-311, MCA. Buildings connected by skyways are not considered one building for licensing purposes.

(7) "Business directly related to the on-premises consumption of alcoholic beverages" means a business that is readily associated with on-site alcoholic beverage consumption, such as a hotel, bowling alley, casino, or restaurant. It does not include alcoholic beverage manufacturers, grocery stores, or off-premises alcoholic beverage businesses, except as allowed under 16-3-311, MCA.

(8) "Catered event" means a special event where the sale and service of alcoholic beverages is conducted by a licensee who has obtained a catering endorsement.

(9) "Catered event service area" means the area in which the licensee with a catering endorsement may sell and serve alcoholic beverages at retail.

(10) "Colocated license" means the same as the term defined in 16-4-401, MCA.

(11) "Colocated premises" means the same as the term defined in 16-4-401, MCA.

(12) "Complete application" means that the applicant has supplied all information and documentation requested on the license application forms or required by statute or rule and the necessary information and documentation requested by the department to complete the application.

(13) "Concession agreements" are agreements in which an on-premises consumption beer licensee or all-alcoholic beverages licensee provides the sale and service of alcoholic beverages for a non-licensed entity.

(14) "Contiguous" means touching or sharing a common border.

(15) "Cross collateralization" means collateral for one loan also serving as collateral for another loan.

(16) "Drink preparation area" means the bar area on the premises where alcoholic beverages are stored and prepared for on-premises consumption and from which alcoholic beverages may be sold for off-premises consumption.

(17) "Event barrier" means a barrier enclosing the perimeter of a catered event service area. The construction, installation, and use criteria of an event barrier is provided in ARM 42.12.128.

(18) "Fair" means a county, state, or regional fair that occurs no more than once per year, is held on a publicly owned fairgrounds, and is officially sanctioned by a government entity.

(19) "Family relationship" means a spouse, dependent children, or dependent parents.

(20) "Floor plan" means a diagram with measurements of the premises as seen from above.

(21) "Grocery store" means a self-service retail establishment where a variety of perishable and nonperishable food items and household goods are sold for use off the premises.

(22) "Interior access" means entry that does not impede customer foot traffic from accessing any interior portion of the premises. Interior access is not found where a customer would be required to leave the interior portion of the premises.

(23) "Licensee" means a person, partnership, association, or other entity holding a Montana retail alcoholic beverage license, a retail alcoholic beverage operation located on a U.S. military installation, an alcoholic beverage manufacturer, a table wine distributor, or a beer wholesaler within Montana.

(24) "License fee" means a fee paid at the time a new license application is submitted and upon renewal of an existing license.

(25) "Loan" means a written contract by which one delivers a sum of money to another with the agreement that the money be returned with interest within a specified period of time.

(26) "Manufacturing area" means the portion of a manufacturing premises that is not designated as a sample room, or operating a retail license under 16-4-401(9), MCA.

(27) "Noninstitutional lender" means a person other than a state or federally regulated banking or financial institution, a credit union, an investment company, a development company, or other regulated lender as defined in 31-1-111, MCA, who loans money to the applicant for a license or to the licensee.

(28) "Ownership interest" means the involvement in the business operated under the license by someone who owns some or all of the assets of the business, shares any portion of the profits, or any portion of the losses or liabilities of the business. Someone with an ownership interest in a liquor license shares in the financial risks of the business and is entitled to the profits or suffers the losses. Ownership interest includes the right to control the location or ownership of a license. Examples of ownership interests would include the authority to participate in such business decisions as the sale of the license, relocation of the license, or change or creation of any financial arrangements for loan repayment or funding sources. Participation in business decisions does not include providing advice. A right of first refusal is not an ownership interest.

(29) "Parties" means a:

(a) licensee;

(b) applicant;

(d) protestor; or

(e) attorney representing the licensee, applicant, secured party, protestor, or other interested party.

(30) "Patio/Deck" means an outdoor portion of the premises where the preparation, service, and consumption of alcoholic beverages is allowed.

(31) "Perimeter barrier" means a barrier enclosing the perimeter of the patio/deck. The barrier shall be constructed in a manner that impedes foot traffic and clearly defines the boundary of the exterior portion of the premises. The barrier shall be at least three feet high at all points and may have a single entrance permitting public access from an unlicensed area to the patio/deck. Upon the department's determination that the barrier accomplishes its intended purpose, the barrier may:

(a) be constructed of materials such as lattice or wrought iron that do not form a solid structure;

(b) have a portion of it be water;

(d) be less than three feet in height.

(32) "Permanent floor-to-ceiling wall" means a continuous structure spanning from floor to ceiling that remains in a fixed position and serves as a solid physical barrier. The wall may be constructed of brick, glass, stone, wood, and other materials as approved by the department. The wall may not be constructed of materials such as lattice or wrought iron that do not form a solid physical barrier.

(33) "Premises" means the area identified in the floor plan approved by the department on which the activities authorized under the license may be conducted.

(34) "Prepared serving" means the same as the term provided in 16-1-106, MCA.

(35) "Registered vendor representative" means the same as provided in ARM 42.11.105.

(36) "Retail alcoholic beverages license" means a license operated by an establishment for the retail sale of alcoholic beverage for either on- or off-premises consumption but does not include brewery, winery, or distillery licenses.

(37) "Sacramental wine" means wine that is manufactured and sold exclusively for use as sacramental wine or for other religious purposes.

(38) "Sample room" means the area of a manufacturer's premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted.

(39) “Self-pour device” means the same as an electronic or other technology-based device used to measure and supply customers with a predetermined volume of beer or wine, as described in 16-3-311(1)(a)(ii), MCA.

(40) "Self-service of alcoholic beverages" means allowing persons other than the licensee or its employees, or a concessionaire or the concessionaire’s employees, to have access to alcoholic beverages prior to the licensee or its employees providing the alcoholic beverage to the person for on-premises consumption. The term does not include beer or wine that was provided in a pitcher, bucket, or bottle, and beer or wine dispensed through an approved self-pour device.

(41) "Service area" means the area on the premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted. The service area includes any patio/deck and drink preparation area.

(42) "Service bar" means an area on a restaurant beer and wine licensee's premises where alcoholic beverages are stored and prepared for on-premises consumption.

(43) "Ski hill," for the purpose of administering 16-3-302(4), MCA, means the site and permanent structures that have been developed for alpine or Nordic skiing.

(44) "Special event," as it relates to special permits and catered events, means a short, infrequent, out-of-the-ordinary occurrence such as a picnic, fair, festival, reception, seasonal event, or sporting event for which there is an outcome, conclusion, or result.

(45) "Stand-alone beer and/or table wine business" means a business in which 95 percent of the business's annual gross income comes from the sale of beer, table wine, or both.

(46) "Storage area" means any portion of the premises that is accessible only by the licensee or its employees and where alcoholic beverages are stored in original packaging.

(47) "Substantially different use" means a change great enough to create a new type of business operation at a premises which is easily distinguishable from the business currently operated or previously planned to be operated at the same premises.

(48) "Temporary operating authority" means the authority granted to an applicant to operate a business pending final approval of the application.

(49) "Undisclosed ownership interest" means a person with an ownership interest in a license who is not identified as an applicant, shareholder, or member of an applicant on an application for the license, or as a licensee on the face of the license.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-106, 16-1-302, 16-3-311, MCA
History: NEW, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 1997 MAR p. 1825, Eff. 10/7/97; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2019 MAR p. 1173, Eff. 8/10/19; AMD, 2020 MAR p. 1177, Eff. 6/27/20; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.107 Educational Materials

(1) The department maintains educational materials for each type of alcoholic beverage license along with the trade practices that are permitted by Montana law and rules. Montana law provides that transactions involving alcoholic beverages are illegal unless specifically permitted by law.

(2) Licensees should seek guidance from the department concerning whether actions not listed in the department materials are allowed before engaging in such transactions. Unless the department provides written guidance citing explicit authority, the licensee should treat all transactions not in the educational materials as prohibited.

(3) Failure of a licensee to follow the guidance in the educational materials will not constitute an additional violation of law or rule.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-301, 16-1-302, 16-1-304, 16-3-101, 16-6-301, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12.

Mont. Admin. R. 42.12.108 Hearing Procedure

(1) When it is determined that a hearing is necessary, the matter will be forwarded to the department's office of dispute resolution where the time, date, and place for the hearing will be determined. The date and time of the hearing shall be during regular business hours. The place of the hearing shall be in:

(a) Helena, if other than a public convenience and necessity hearing or a resort determination hearing;

(b) the community nearest the location of the applicant's proposed premises if it is a public convenience and necessity hearing or a resort determination hearing; or

(c) Helena for a telephonic hearing, when agreed to by all the parties to the hearing. The hearing will be initiated from Helena by the hearing examiner through a conference call to the telephone numbers provided by the parties.

(2) Prior to a hearing date, the office of dispute resolution shall issue a written notice of the date, time, and place of the hearing. At that time, a copy of the notice shall be provided to all interested parties.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-105, 16-4-203, 16-4-207, and 16-4-404, MCA
History: NEW, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.

Mont. Admin. R. 42.12.109 Protests

(1) A protest letter as described in 16-4-207, MCA, must:

(a) contain statement(s) of the writer's intent that the letter be considered a protest;

(b) describe the reason for protesting the granting of a license;

(i) providing the license number and accurate trade name or applicant name in a case of a transfer; or

(ii) the trade name and applicant name and stating that it is for a new application for an original Montana all-alcoholic beverages license; and

(d) be received by the department by the published protest letter deadline.

(2) A protest letter containing multiple signatures is considered one protest letter.

(3) If the grounds stated in the protest letter contain public convenience and necessity issues, the prerequisite number of protest letters required to initiate a public convenience and necessity hearing, as defined in 16-4-207, MCA, must be received.

(4) Pursuant to 16-4-203, MCA, protests are limited to the operation of the alcoholic beverage license only.

(5) A protest letter which fails to meet the criteria in (1) through (4) will not be considered.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-203, 16-4-207, MCA
History: NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.110 Service of Notices

(1) A notice of proposed adverse action issued pursuant to 16-4-107, 16-4-406, 16-4-407, or 16-4-1008, MCA, shall be served upon the licensee or registrant of record or, in the case of an application for a new license, on the applicant, by sending a copy of the notice to the licensee, registrant, or applicant by U.S. mail to the mailing address on file with the department or by electronic means if the licensee, registrant, or applicant consents in writing.

(2) Service by mail shall be considered complete upon mailing the notice. Service by electronic means shall be considered complete upon transmission but is not effective if the department learns that it did not reach the person to be served. Service shall not be considered incomplete because of refusal to accept delivery of the notice.

(3) The licensee, registrant, or applicant must respond to the department in writing within 23 days of service of the notice of proposed adverse action. Failure to respond will result in the enforcement of the administrative action proposed in the notice.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 2-4-601, 16-4-107, 16-4-406, 16-4-407, 16-4-1008
History: NEW, 2005 MAR p. 269, Eff. 2/11/05; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.111 Application Fees and Processing Fees for Other Requests

(1) The fees to be charged for processing applications or other requests and submissions are as follows:

(a) All-beverages license $400

(b) Beer importer's license $200

(d) Combined beer wholesaler and table wine distributor subwarehouse license $100

(e) Brewery license $200

(f) Out of state brewery or beer importers registration $200

(g) Brewery, winery, or distillery storage depot license $100

(h) Domestic distillery license $200

(i) Resort all-beverages license $400

(j) Restaurant beer and wine license $400

(k) Retail off-premises beer and table wine license $200

(l) Retail off-premises beer license $200

(m) Retail off-premises table wine license $200

(n) Retail on-premises beer and wine license $400

(o) Sacramental wine license $50

(p) Tour boat endorsement $100

(q) Winery license $200

(r) All-beverages, retail on-premises beer and wine, or restaurant beer and wine license delivery endorsement $200

(2) The fees to be charged for processing requests associated with an existing license are as follows:

(a) Adding a catering endorsement $100

(b) Adding a concession agreement $100

(d) Adding or changing mortgages, secured interests, or liens $50

(e) Transferring ownership as a result of a foreclosure $200

(f) Transferring location $200

(g) Increasing current ownership interest from less than 15 percent to 15 percent or more $200

(h) Changing the business entity type $200

(i) Changing the alcohol beverage type $200

(j) Adding a delivery endorsement $100

(k) Adding an additional golf course building $100

(l) Adding a noncontiguous storage area on the campus of a continuing care retirement community licensed premises $100

(m) Adding additional buildings or service locations on the campus of a continuing care retirement community licensed premises $100

(3) The processing fee for determination of resort area is $500.

(4) Processing fees are not refundable.

(5) A fingerprint processing fee, in the amount indicated on the application form, must accompany each application.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-201, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-1-302, 16-1-303, 16-3-302, 16-4-105, 16-4-201, 16-4-204, 16-4-303, 16-4-313, 16-4-315, 16-4-414, 16-4-420, MCA
History: NEW, Eff. 11/3/75; AMD, 1979 MAR p. 1249, Eff. 10/12/79; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1985 MAR p. 1155, Eff. 8/16/85; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2021 MAR p. 1152, Eff. 9/11/21; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.112 Additional Fee for Census

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-201 and 16-4-502, MCA
History: NEW, Eff. 11/3/75; REP, 1985 MAR p. 167, Eff. 2/15/85.

Mont. Admin. R. 42.12.113 License Fees for Combined Population Areas

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-105, 16-4-201, and 16-4-501, MCA
History: NEW, 1977 MAR p. 967, Eff. 11/26/77; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.12.114 License Fees

(1) New licenses issued are assessed an annual license fee in accordance with 16-4-501, MCA. All licenses must be renewed and the annual license fee paid on or before the due date of each year. A change in a license designation due to a change in quota area may affect the statutory license fee. Any change of license fee will be reflected on the next renewal application and the new fee will be due at the time of renewal.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-201, MCA
History: NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00.

Mont. Admin. R. 42.12.115 Assessment of License Renewal Late-Payment Fee - Grounds for Waiver

(1) The department will assess a license renewal late-payment fee in all cases where a licensee fails to pay the license renewal fee on or before the due date. The renewal application and fee are timely filed and paid if mailed in an envelope postmarked by the United States Postal Service on or before the due date. If the due date falls on a Saturday, Sunday, or state legal holiday, a postmark for the following business day or a payment received at the department on the following business day is timely.

(2) The department may waive a license renewal late-payment fee assessment upon receipt of a written request by the licensee. The request must state the reason for late payment and be supported by documentation. A waiver of the license renewal late-payment fee assessment shall be granted under the following conditions:

(a) a department error;

(b) the department mailed a license renewal notice less than two weeks prior to the due date;

(d) a United States Postal Service error;

(e) a renewal application and fee was erroneously mailed to the Internal Revenue Service or Alcohol and Tobacco Tax and Trade Bureau;

(f) a delay in payment due to bankruptcy or foreclosure action; or

(g) the late payment is the only late payment within the most recent five consecutive years or since the license was acquired, whichever is less, and payment was received at the department within 30 days after the due date.

(3) A licensee's neglect, lack of funds, or ignorance of the law are not sufficient reasons for waiver of a license renewal late-payment penalty fee assessment.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-501, MCA
History: NEW, 1985 MAR p. 1340, Eff. 9/13/85; AMD, 1991 MAR p. 467, Eff. 4/12/91; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12.

Mont. Admin. R. 42.12.116 Concurrent Applications

(1) An application received for a premises for which an application is pending, as defined in 16-4-412 , MCA, shall be returned to the applicant with an explanation that the applicant cannot be considered because there is a previous application pending for the same premises.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-412, MCA
History: NEW, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03.

Mont. Admin. R. 42.12.117 Substantially Different Use

(1) If an applicant has been denied a license under 16-4-405 , MCA, a new application cannot be considered for five years unless the department determines there has been a change great enough to be easily recognizable. The department will consider applications where the proposed use is noticeably and substantially different from the use that was previously rejected.

(a) The following examples constitute a substantially different use but are not all inclusive of the types of changes the department would consider:

(i) a situation where the new business operation has changed significantly enough to change the primary source of revenue generated by the business or the operation previously planned to be operated on the premises. Such a change would be where a business changed from primarily a casino/bar operation to a restaurant operation with all the necessary facilities to accommodate a restaurant setting and at least 65 percent of the gross revenue is from the sale of food; or

(ii) the zoning designation of the proposed location has changed by local government action.

(b) The following examples do not constitute substantially different use:

(i) a change in business hours;

(ii) a change in the type of alcoholic beverages offered for on-premises consumption; or

(iii) a newly constructed or remodeled building which will be used for the same primary purpose as the proposed use that was rejected.

(2) An applicant who has applied for substantially different use, and is approved under this rule, may not change the applicant's manner of operation for five years as described in 16-4-413 , MCA.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-405 and 16-4-413, MCA
History: NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2004 MAR p. 1972, Eff. 8/20/04.

Mont. Admin. R. 42.12.118 Abbreviated Application for License Modification

(1) An abbreviated application may be used to modify a license as set forth in (2) and (3). The application process in ARM 42.12.101 shall be followed in all other cases.

(2) A licensee must submit an abbreviated application within 90 days of:

(a) removing an existing, previously qualified owner, member, partner, or shareholder from the license without the exchange of funds;

(b) adding an individual or entity as a less than 15 percent owner;

(c) adding or removing officers and/or directors of the licensee to comply with the requirements of 16-4-401(2)(b)(i), (2)(c)(i), (2)(h)(i), or (2)(i)(i), MCA, as applicable;

(d) changing the entity type of the licensee if the existing owners and ownership percentages do not change.

(3) A licensee must submit an abbreviated application prior to:

(a) transferring the location of the license;

(b) increasing the current ownership interest of any owner, member, partner, or shareholder from less than 15 percent to 15 percent or more;

(d) changing the license type.

(4) A licensee's failure to timely submit an abbreviated application shall constitute a violation and may subject the licensee to administrative action.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, 16-4-402, 16-4-414, 16-4-415, MCA
History: NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.121 Processing of Application

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Title 16, chapter 4, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.

Mont. Admin. R. 42.12.122 Suitability of Licensed Premises

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-311, 16-4-402, 16-4-405, MCA
History: NEW, Eff. 11/3/75; AMD, 1992 MAR p. 2187, Eff. 9/25/92; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 1997 MAR p. 1825, Eff. 10/7/97; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2005 MAR p. 269, Eff. 2/11/05; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.123 Conduct of Other Activities on Premises

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-303 and 16-4-402, MCA
History: Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 1985 MAR p. 1155, Eff. 8/16/85.

Mont. Admin. R. 42.12.124 Rejection of Application Because of Number of Existing Licenses

(1) Applicants shall be notified that the issuance of a new license or transfer will not be allowed by the department when:

(a) the number of licenses of each type already issued for the quota area is equal to or exceeds the limitations specified in 16-4-105, 16-4-201, and 16-4-420, MCA; or

(b) the transfer of an on-premises consumption alcoholic beverages license under these circumstances could not be approved under the requirements of the law.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-204, 16-4-405, 16-4-420, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2018 MAR p. 1613, Eff. 8/11/18.

Mont. Admin. R. 42.12.125 Combined Area Quotas

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-105, 16-4-201, MCA
History: NEW, 1977 MAR p. 966, Eff. 11/26/77; AMD, 1978 MAR p. 394, Eff. 3/25/78; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2018 MAR p. 1613, Eff. 8/11/18.

Mont. Admin. R. 42.12.126 Off-Premises Sale of Beer or Table Wine

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-115, MCA
History: NEW, Eff. 11/3/75; AMD, 1979 MAR p. 1249, Eff. 10/12/79; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.127 Wine License Amendment

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-105, MCA
History: NEW, Eff. 11/3/75; AMD, 1980 MAR p. 431, Eff. 2/1/80; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.

Mont. Admin. R. 42.12.128 Catering Endorsement; Catered Events; Event Barriers

(1) Any licensee having obtained a catering endorsement under the provisions of 16-4-111 or 16-4-204, MCA, is authorized to sell alcoholic beverages authorized under the license to persons attending a catered event sponsored by someone other than the licensee or the concessionaire of the licensee and at a location not otherwise licensed or operating under a special permit.

(2) Prior to selling or serving alcoholic beverages at the catered event, the licensee shall:

(a) have an executed written agreement with the event's sponsor;

(b) notify the local law enforcement agency that has jurisdiction over the area where the catered event will be held using a form provided by the department;

(c) pay the local law enforcement agency a $35 fee, if required by the local government, as provided in 16-4-111 and 16-4-204, MCA; and

(d) ensure compliance with the alcoholic beverages sales restrictions provided in 16-3-306, MCA.

(3) A catered event may have more than one licensee cater the event. Licensees shall prevent the consumption of alcoholic beverages within their catered event service area that they did not sell or provide.

(4) A catered event may last for a maximum of three days, except a licensee may have one catered event per year that lasts up to seven days for a fair, as defined in ARM 42.12.106. The storage of alcoholic beverages may occur at the catered event, as provided in 16-4-111 and 16-4-204, MCA.

(5) Alcoholic beverages may be sold and served at the catered event from a booth, stand, or other fixed place of business as designated and described in the notice given to the local law enforcement agency and may include grandstands or bleachers, as provided for in 16-4-111 and 16-4-204, MCA.

(6) If there is not an existing boundary defining the catered event service area, an event barrier shall be required to clearly mark where the sale and service of each licensee's alcoholic beverages is allowed. The event barrier:

(a) shall be constructed in a manner that directs or impedes ordinary foot traffic and clearly defines the boundary of the catered event service area;

(b) shall be at least three feet in height at all points;

(d) may be shared with an adjoining licensee to define their respective catered event service areas; and

(e) may have a portion consisting of an existing natural or artificial barrier.

(7) When a licensee caters an event that is within 15 feet of its licensed premises, patrons may take alcoholic beverages between the licensed premises and the area authorized for the catered event if the licensee:

(a) incorporates into the event barrier, a clearly marked path or paths from the public entry of the licensed premises to the public entry of the catered event;

(b) posts signs along the path or paths informing patrons as to where the consumption of alcoholic beverages is allowed and not allowed; and

(i) the licensee does not already have possessory interest for the area;

(ii) the licensee does not already have conditional use approval from local government officials for the area; or

(iii) there is an ordinance in place prohibiting open containers of alcoholic beverages.

(8) The sale and service of alcoholic beverages at the catered event may be conducted by:

(a) the licensee or licensee's employees;

(b) volunteers of the licensee; or

(i) the licensee gives their explicit consent;

(ii) the alcoholic beverage manufacturer or vendor holds a current alcoholic beverage license, registration, or permit from the department; and

(iii) each person listed in (c) serving alcoholic beverages is current with the Responsible Alcohol Sales and Service Act, provided in 16-4-1005, MCA, prior to the commencement of the catered event.

(9) On or before the 15th day of each month, the licensee shall electronically report, on a form provided by the department, those events the licensee catered in the previous month and shall include a copy of the notification form signed by local law enforcement.

(10) A copy of the executed written agreement between the licensee and event sponsor for each event catered shall be maintained by the licensee for a period of three years from the date of the event. The department may make an examination of any such agreement at any time.

(11) The licensee who catered the event is ultimately responsible for ensuring compliance with all alcoholic beverage laws and regulations, violations of which may subject the licensee to administrative action.

(12) A distillery licensed under 16-4-312, MCA, may sponsor a catered event with an all-beverages licensee with a catering endorsement if:

(a) the distillery obtains department approval by submitting a form provided by the department at least 30 days prior to the start of the catered event;

(b) the all-beverages licensee follows the catering requirements provided in statute and this rule;

(c) all liquor provided for on-premises consumption at the catered event is purchased by the all-beverages licensee from an agency liquor store;

(d) all liquor sold for off-premises consumption at the catered event is purchased by the all-beverages licensee from an agency liquor store; and

(e) the distillery is prohibited from selling liquor directly to catered event attendees.

(13) In accordance with 16-4-204, MCA, the department may approve only six catered events per calendar year, industry-wide. As such, catered event requests from distilleries will be processed and approved on a first-come, first-served basis.

History

Authorizing statute(s): 16-1-303, 16-4-204, MCA
Implementing statute(s): 16-3-103, 16-4-111, 16-4-204, 16-4-312, MCA
History: NEW, 1979 MAR p. 983, Eff. 8/31/79; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1987 MAR p. 1491, Eff. 10/1/87; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 1994 MAR p. 3101, Eff. 12/9/94; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2019 MAR p. 1173, Eff. 8/10/19; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.129 Determination of Proximity to Place of Worship or School

(1) In order to apply the provisions of 16-3-306, MCA, the department must find:

(a) the entrance doors of the premises proposed for licensing and the entrance doors of the place of worship or school are situated on the same street; and

(b) the physical address of the premises proposed for licensing is designated as the same street as the physical address of the place of worship or school; and

(c) the distance, measured in a straight line, from the entrance doors of the business proposed for licensing and the entrance doors of the place of worship or school is 600 feet or less.

(2) If the above three-part test is not met in its entirety, the provisions of 16-3-306, MCA, do not apply.

(3) The distance between entrance doors is measured by a geometric straight line, regardless of intervening property and buildings. An entrance is considered to be a means of ingress to the premises generally used by the public. This does not include egress-only doors, delivery, or service entrances.

(4) In the event that a county or city government should enact an ordinance or resolution supplanting the provisions of 16-3-306, MCA, the restriction shall not apply.

(5) A conformed copy of such supplanting ordinance or resolution must be submitted to the department by the applicant.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-306, MCA
History: NEW, 1980 MAR p. 1086, Eff. 3/28/80; AMD, 1984 MAR p. 325, Eff. 2/17/84; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12.

Mont. Admin. R. 42.12.130 Determination of License Quota Areas

(1) Any applicant applying to the department for a new license or transfer of location of an existing license under the quota limitations provided for under 16-4-105, 16-4-201, and 16-4-420, MCA, must submit to the department the legal description or street address of the proposed premises.

(2) If the department determines the proposed premises are in close proximity to a quota area boundary line, the department may request the applicant complete and submit a survey affidavit form, provided by the department, from the local county or city surveyor or a private licensed land surveyor attesting to the location of the proposed premises. Any cost in obtaining the completed survey affidavit shall be paid by the applicant.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-420, 16-4-501, MCA
History: NEW, 1983 MAR p. 1928, Eff. 12/30/83; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2020 MAR p. 1177, Eff. 6/27/20.

Mont. Admin. R. 42.12.131 Applications for Licenses Available in Quota Areas, and Application Processing Times

(1) When the department is not required to conduct a competitive bidding process for an available license in a quota area, applications will be processed on a first-come, first-served basis.

(2) As set forth in 16-4-420, MCA, the department must grant or deny a completed restaurant beer and wine license application within four months of receipt of the application. However, if the department's investigation into the application uncovers the necessity to analyze additional information not previously provided by the applicant, the four-month time period stops until the information is provided.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-204, 16-4-420, MCA
History: NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.132 Location Manager

(1) All on-premises retailers, off-premises retailers, manufacturers, and distributors shall designate at least one location manager, which may be a person or an entity providing location management services, to oversee the alcoholic beverage operations and ensure compliance with alcoholic beverage laws and regulations on behalf of the licensee.

(a) A location manager designation is based upon the duties performed rather than job title and a location manager must meet the qualifications criteria provided in 16-4-419, MCA, and this rule.

(b) If more than one person performs location manager duties, the licensee shall seek the department's approval for each. manager

(2) The licensee shall initially seek the department's approval of all location managers and any business entity providing location management services on the license application.

(3) Following initial licensure, the licensee shall seek the department's approval of a location manager as follows:

(a) if the location manager is not an owner vetted pursuant to 16-4-401, MCA, then the licensee shall submit the location manager application, the employee's personal history statement, two complete sets of the employee's fingerprint cards, and the fingerprint processing fee within 30 days of the employee commencing location manager duties; or

(b) if the location manager is an owner vetted pursuant to 16-4-401, MCA, then the licensee must complete and submit the location manager application but does not need to resubmit the owner's personal history statement, two complete sets of the owner's fingerprint cards, or the fingerprint processing fee.

(4) If a licensee designates a business entity as a location manager, the business entity must appoint at least one person who meets the requirements of 16-4-419, MCA, and this rule as a location manager. The licensee shall submit the representative's location manager application, personal history statement, two complete sets of fingerprint cards, and fingerprint processing fee within 30 days of the commencement of location manager duties.

(5) A licensee shall also confirm annually, on the license renewal form, who is performing location manager duties whether under (3) or (4). The licensee shall also identify any location managers who ceased performing managerial duties during the past license year.

(6) The department shall issue its determination of the location manager application within 15 days of receiving the results of the investigation unless the department receives investigative findings that require additional consideration. In this case, the department will notify the licensee, in writing, within five days that an extension of the determination is necessary.

(7) The licensee shall:

(a) retain ultimate control over the license and premises;

(b) maintain an active participation in the alcoholic beverage operation sufficient to ensure the proper and lawful conduct of the business; and

(c) except for an owner acting as a location manager, provide the location manager compensation commensurate with the duties performed. Compensation shall not be based on a percentage of gross sales or net profits.

(8) Failure to abide by the provisions of this rule, including the failure to disclose the person performing location manager duties, may subject the licensee to administrative action, including revocation of the license.

History

Authorizing statute(s): 16-1-303, 16-4-419, MCA
Implementing statute(s): 16-1-302, 16-4-414, MCA
History: NEW, 1992 MAR p. 2192, Eff. 9/25/92; AMD, 1998 MAR p. 2102, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2003 MAR p. 2305, Eff. 10/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 346, Eff. 3/25/17; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.133 Concession Agreements

(1) Concession agreements, authorized to the licensees specified under 16-4-213(7) and 16-4-418, MCA, are written agreements, which may be in the form of a standalone contract or a department-approved, standard agreement, that formalize how a licensee will extend its licensed premises into a concessionaire's business for the purpose of selling and serving the licensee's alcoholic beverages to the concessionaire's customers provided the suitability requirements in ARM 42.12.145 are met.

(2) All new, proposed concession agreements must be submitted to the department for review and approval prior to their execution or effective date, and must be accompanied by the following:

(a) a completed concession agreement request form provided by the department, the application fee provided in 16-4-418, MCA, and the processing fee described in ARM 42.12.111;

(b) a copy of the proposed floor plan;

(d) a completed alteration request form if the addition of the concessionaire's area will change the licensee's current floor plan that is on file with the department.

(e) The alteration request requirement in (d) does not apply to a new, proposed concession agreement when it is included in a license application submitted by an applicant pursuant to 16-4-402, MCA, and ARM 42.12.101.

(3) The department, upon receipt of the proposed concession agreement and any supporting documentation, will advise the licensee and concessionaire of its approval or denial of the agreement unless further documentation or an audit review is necessary.

(4) Upon approval of the proposed concession agreement, the license will reflect language that the licensee is also serving alcoholic beverages in the concessionaire's establishment. The concessionaire shall display in a prominent place, a copy of the license and a placard, issued by the department, stating the consequences for violations of the alcoholic beverage code by persons under 21 years of age.

(5) Except as provided in (6), any proposed modification of an existing concession agreement must be submitted for review and approval by the department. The licensee and concessionaire may continue to operate under the approved, existing concession pending approval by the department.

(6) A licensee and concessionaire may change the compensation arrangement under a concession agreement, without department approval, if it meets the requirements of 16-4-418(6)(a), MCA. The licensee and concessionaire must submit a copy of the new compensation terms on the concession agreement request form within 30 days of the change.

(7) All concession agreements must be renewed on or before June 30 of each year by paying the renewal fee provided in 16-4-418, MCA. Failure to pay the renewal fee may result in the denial of renewal of the concession agreement.

(8) Failure of a licensee to submit a completed annual license renewal form to the department and pay the license's renewal fee may result in the denial of renewal of the concession agreement.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-305, 16-3-311, 16-4-401, 16-4-402, 16-4-418, MCA
History: NEW, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2020 MAR p. 1177, Eff. 6/27/20; AMD, 2022 MAR p. 1932, Eff. 9/26/22.

Mont. Admin. R. 42.12.139 Conditions and Qualifications Specific for a Manufacturer of Beer, Wine, or Distilled Spirits License

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-213, 16-3-214, 16-3-411, 16-4-102, 16-4-311, 16-4-312, 16-4-402, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.141 Licensed Entities

(1) No alcoholic beverages license shall be issued to an entity unless the entity has been authorized to do business in Montana prior to making application for an alcoholic beverages license.

(2) An entity's application must be accompanied by the following, as issued within the last six months by the Montana Secretary of State:

(a) articles of incorporation or organization, or a certificate of existence for corporations and limited liability companies; or

(b) a certificate of fact or application as filed with the Secretary of State for all other types of entities.

(3) The applicant must be current on all filings and payments related to Montana income, corporation, withholding, business, and other taxes.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2012 MAR p. 1846, Eff. 9/21/12.

Mont. Admin. R. 42.12.142 Change in Corporate Structure

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-205 and 16-4-401, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.

Mont. Admin. R. 42.12.143 Restriction on Interest in Other Licenses

(1) For purposes of this rule, any ownership interest in a business that operates a license issued under the Montana Alcoholic Beverage Code is considered to be an ownership interest in the license itself.

(2) A Montana all-beverages licensee may not:

(a) possess a financial or ownership interest in:

(i) a Montana agency liquor store;

(ii) possess an ownership interest in more than the limit for Montana all-beverages licenses established in 16-4-205, MCA; or

(iii) more than half the total number of Montana all-beverages licenses in any quota area described in 16-4-201, MCA;

(b) through a business or family relationship, share in the profits or liabilities in more than half the total number of Montana all-beverages licenses in the specific quota area in which the licenses will be held; or

(i) an alcoholic beverage manufacturer or importer of alcoholic beverages, except as provided in 16-4-401(8)(e) and (9), MCA; or

(ii) a distributor of alcoholic beverages, including a Montana combined beer wholesaler and table wine distributor and a Montana agency liquor store.

(3) All other Montana retail on-premises consumption alcoholic beverages licensees may not:

(a) possess a financial or ownership interest in a Montana agency liquor store; or

(b) individually or through the person's immediate family, receive financing from or have any affiliation to:

(i) an alcoholic beverage manufacturer or importer of alcoholic beverages, except as provided in 16-4-401(8)(e) and (9), MCA; or

(ii) a distributor of alcoholic beverages, including a Montana combined beer wholesaler and table wine distributor and a Montana agency liquor store.

(4) A Montana retail off-premises consumption beer and table wine licensee may not:

(a) possess a financial or ownership interest in a Montana agency liquor store; or

(b) individually or through the person's immediate family, receive financing from or have any affiliation to:

(i) an alcoholic beverage manufacturer or importer of alcoholic beverages; or

(ii) a distributor of alcoholic beverages, including a Montana combined beer wholesaler and table wine distributor and a Montana agency liquor store.

(5) A Montana combined beer wholesaler and table wine distributor may not:

(a) possess a financial or ownership interest in a Montana agency liquor store, a Montana alcoholic beverages retailer, an alcoholic beverages manufacturer, or another Montana combined beer wholesaler and table wine distributor;

(b) have any affiliation with a Montana alcoholic beverages retailer, or the immediate family of a Montana alcoholic beverages retailer; or

(6) A Montana alcoholic beverage manufacturer may not possess a financial or ownership interest in:

(a) a distributor of alcoholic beverages, including a Montana beer wholesaler, a Montana table wine distributor, and a Montana agency liquor store; or

(b) a Montana alcoholic beverages retailer, except as provided in 16-4-401, MCA.

(7) When a licensed retailer and a licensed manufacturer operate a colocated license, the following restrictions apply in addition to those in (1) through (6):

(a) a person with an ownership interest in a licensed brewery or licensed winery may hold complete ownership of up to a combined total of three on-premises consumption beer and wine licenses or all-beverage licenses;

(b) a person with an ownership interest in a licensed distillery may hold complete ownership of up to three all-beverage licenses;

(c) a person with an ownership interest in an all-beverage license and a Montana distillery license may hold complete ownership interest in up to two additional all-beverage licenses; and

(d) a person with an ownership interest in an on-premises consumption beer and wine license or all-beverage license and a Montana brewery license or Montana winery license may hold complete ownership interest in up to two additional on-premises consumption beer and wine licenses or all-beverages licenses.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-201, 16-4-205, 16-4-401, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1985 MAR p. 1632, Eff. 11/1/85; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.144 Transfers Between Quota Areas - Procedures and Documentation

(1) An applicant applying to the department to transfer an all-beverages license under the provisions of 16-4-204, MCA, may negotiate a bona fide sale with the owner of a license, located in a quota area from which that license may be transferred, to purchase a license and, if no competitive bidding is required, shall submit;

(a) an application for transfer of ownership and location in compliance with ARM 42.12.209 and 42.12.210;

(b) documents required for the application pursuant to ARM 42.12.101 to be considered a complete application as defined in ARM 42.12.106;

(d) other documents which may be needed or specified on the application form or during the license investigation process; and

(e) other documents deemed necessary by the department or hearing examiner to reach a final decision.

(2) A fully executed purchase agreement and a request for termination of secured parties' interests are not required upon initial filing of the application.

History

Authorizing statute(s): 16-1-303, 16-4-204, MCA
Implementing statute(s): 16-4-204, 16-4-413, MCA
History: NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 2423, Eff. 10/15/93; AMD, 1998 MAR p. 3132, Eff. 11/20/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2018 MAR p. 1613, Eff. 8/11/18.

Mont. Admin. R. 42.12.145 On-Premises Consumption Beer and All-Beverage License - Premises Suitability Requirements

(1) The department shall determine the suitability of the premises where an on-premises consumption beer and wine or all-beverage retailer proposes to operate a license, when a party applies to obtain a license, transfers ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, changes the location where a license will be operated, makes alterations to a premises with a floor plan that the department approved, applies to operate under a concession agreement with a concessionaire, as provided in ARM 42.12.133, or applies to operate as a colocated license. The requirements of this rule also apply to an on-premises consumption beer and wine or all-beverage retailer operating at a colocated premises.

(2) The premises of an on-premises consumption beer and wine or all-beverage retailer may be considered suitable only if:

(a) except as allowed in 16-3-311(1)(a), MCA, the applicant or licensee has possessory interest in the premises;

(b) the applicant or licensee has adequate control over the premises;

(c) except as allowed in 16-4-401, MCA, a single alcoholic beverage license of any kind will be operated at the premises;

(d) the premises are identified by a unique address;

(e) the premises are located in one building or a specific portion of one building, except that a patio/deck may extend the premises beyond the interior portion of the building. The premises may also include the buildings and structures allowed in 16-3-302, MCA, and ARM 42.12.153. The interior portion of the premises must comply with the requirements of 16-3-311(3), MCA. Subject to the exceptions in 16-3-311(1)(a), (8), (9), and (10), MCA, if the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other business, including any other business operated by the licensee. Except as otherwise provided in 16-3-311(8), (9), and (10), MCA, the only access from the premises to another business may be through lockable doors in the permanent floor-to-ceiling wall;

(f) building, health, and fire code approval is obtained;

(g) the premises are located on regular police beats and can be properly policed by local authorities, which includes the premises being located on property to which law enforcement has unrestricted access, except as provided in 16-6-103, MCA;

(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;

(i) the premises are either solely dedicated to the on-premises consumption of alcoholic beverages or are within a business directly related to the on-premises consumption of alcoholic beverages;

(j) the type of business is readily determinable due to indoor and outdoor signage and the premises' general layout and atmosphere;

(k) alcoholic beverages are advertised and displayed as being available for purchase;

(l) there are no signs, posters, or advertisements displayed on the exterior portion of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA, or advertisements excepted in 16-3-244, MCA;

(m) the interior premises include at least one stationary drink preparation area. The premises may have more than one drink preparation area, including drink preparation areas on the patio/deck and moveable drink preparation areas, subject to department approval;

(n) there is interior access to any interior portion of the premises;

(o) all storage areas are located in the interior portion of the premises, except as authorized by 16-3-311(1)(b) and (6), MCA;

(p) except as provided in 16-3-311(1), MCA, and ARM 42.13.1108, the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any drink preparation area; and

(q) except as provided in 16-3-311(1), MCA, and ARM 42.13.1108, self-service devices and vending machines are not used to serve alcoholic beverages.

(3) A patio/deck, authorized under 16-3-311, MCA, may be considered suitable only if:

(a) building, health, and fire code approval is obtained, as required by state or local law;

(b) subject to the exception in (c), the patio/deck is contiguous with and immediately accessible from the interior premises;

(c) any path connecting the interior premises and the patio/deck is under the possessory interest of the licensee, is clearly marked, and the department determines that sufficient physical safeguards are in place to ensure proper service and consumption of alcoholic beverages; and

(d) with the exception of a patio/deck at a golf course, a perimeter barrier or existing natural boundary clearly marks where the service and consumption of alcoholic beverages are allowed.

(4) If a licensee leases or subleases its kitchen, or another specified area within its premises, to allow another business entity to operate a business within the licensed premises, as conditioned in 16-3-311(1)(a), MCA, then the licensee shall ensure adequate physical safeguards are in place to prevent access to the alcoholic beverage inventory by the other business entity. The area leased or subleased by the licensee shall be clearly marked on the floor plan, a copy of which shall be submitted to the department.

(5) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.

(6) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-244, 16-3-309, 16-3-311, 16-3-312, 16-4-213, 16-4-402, 16-4-405, 16-4-418, MCA
History: NEW, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2019 MAR p. 2257, Eff. 12/7/19; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.146 Restaurant Beer and Wine License - Premises Suitability Requirements

(1) The department shall determine the suitability of the premises where a restaurant beer and wine retailer proposes to operate a license, when a party applies to obtain a license, transfers ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, changes the location where a license will be operated, or makes alterations to a premises with a floor plan that the department approved.

(2) The premises of a restaurant beer and wine retailer may be considered suitable only if:

(a) except as allowed in 16-3-311(1)(a), MCA, the applicant or licensee has possessory interest in the premises;

(b) the applicant or licensee has adequate control over the premises;

(d) the premises are identified by a unique address;

(e) the premises are located in one building or a specific portion of one building, except that a patio/deck may extend the premises beyond the interior portion of the building. The interior portion of the premises must comply with the requirements of 16-3-311(3), MCA. Subject to the exceptions in 16-3-311(8) and (9), MCA, if the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other business, including any other business operated by the licensee. Except as provided in 16-3-311(1)(a), (8), and (9), MCA, the only access from the premises to another business may be through lockable doors in the permanent floor-to-ceiling wall;

(f) building, health, and fire code approval is obtained;

(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;

(i) the type of business is readily determinable due to indoor and outdoor signage and the premises' general layout and atmosphere;

(j) alcoholic beverages are advertised and displayed as being available for purchase;

(k) there are no signs, posters, or advertisements displayed on the exterior portion of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA;

(l) there is seating for patrons totaling not more than the seating capacity for which the premises are licensed;

(m) there is an interior service bar. The premises may have more than one service bar, including service bars on the patio/deck, subject to department approval;

(n) there is interior access to any interior portion of the premises;

(o) all storage areas are located in the interior portion of the premises, except as authorized by 16-3-311(6), MCA;

(q) except as provided in 16-3-311(1), MCA, and ARM 42.13.1108, self-service devices and vending machines are not used to serve alcoholic beverages.

(3) A patio/deck, authorized under 16-3-311, MCA, may be considered suitable only if:

(a) building, health, and fire code approval is obtained;

(b) subject to the exception in (c), the patio/deck is contiguous with and immediately accessible from the interior premises;

(d) a perimeter barrier clearly marks where the service and consumption of alcoholic beverages are allowed.

(4) If a licensee leases or subleases its kitchen, or another specified area within its premises, to allow another business entity to operate a business within the licensed premises, as conditioned in 16-3-311(1)(a), MCA, then the licensee shall ensure adequate safeguards are in place to prevent access to the alcoholic beverage inventory by the other business entity. The area leased or subleased by the licensee shall be clearly marked on the floor plan, a copy of which shall be submitted to the department.

(5) A licensee which leases or subleases its kitchen, or another specified area of its licensed premises, must still meet the definition of "restaurant" and fulfill the license requirements of 16-4-420, MCA.

(6) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.

(7) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-244, 16-3-309, 16-3-311, 16-3-312, 16-4-402, 16-4-405, 16-4-421, MCA
History: NEW, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.147 Off-Premises Beer and Table Wine License - Premises Suitability Requirements

(1) The department shall determine the suitability of the premises where an off-premises beer and table wine retailer proposes to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.

(2) The premises of an off-premises beer and table wine retailer may be considered suitable only if:

(a) the applicant or licensee has possessory interest in the premises;

(b) the applicant or licensee has adequate control over the premises;

(d) the premises are identified by a unique address;

(e) the premises are located in one building or a specific portion of one building. The interior portion of the premises must comply with the requirements of 16-3-311(3), MCA. If the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other licensed alcoholic beverage business. The only access from the premises to another licensed alcoholic beverage business may be through lockable doors in the permanent floor-to-ceiling wall;

(f) building, health, and fire code approval is obtained;

(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;

(i) the premises are in a stand-alone beer and/or table wine business, a grocery store, or a drugstore licensed as a pharmacy;

(j) the type of business is readily determinable due to indoor and outdoor signage and the premises' general layout and atmosphere;

(k) alcoholic beverages are advertised and displayed as being available for purchase;

(m) there is interior access to any interior portion of the premises; and

(n) all storage areas are located in the interior portion of the premises, except as authorized in 16-3-311(6), MCA.

(3) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.

(4) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-244, 16-3-309, 16-3-312, 16-4-115, 16-4-402, 16-4-405, MCA
History: NEW, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.148 Beer Wholesaler and Table Wine Distributor - Premises Suitability Requirements

(1) The department shall determine the suitability including any subwarehouse where a beer wholesaler and table wine distributor proposes to operate a license when a party applies to obtain a license, transfer ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, change the location where a license will be operated, or make alterations to a premises with a floor plan that the department approved.

(2) The premises of a beer wholesaler and table wine distributor may be considered suitable only if:

(a) the applicant or licensee has possessory interest in the premises;

(b) the applicant or licensee has adequate control over the premises;

(d) the premises are identified by a unique address;

(e) building, health, and fire code approval is obtained;

(f) the premises are located in one building or a specific portion of one building. The interior portion of the premises must be a continuous area that is not broken by any area in which the applicant or licensee does not have adequate control, such as another business or a common area shared with other building tenants. If the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other licensed alcoholic beverage business. The only access from the premises to another licensed alcoholic beverage business may be through lockable doors in the permanent floor-to-ceiling wall;

(g) the premises include sufficient space for the storage and distribution of beer and/or table wine in large quantities;

(h) there is interior access to any interior portion of the premises; and

(i) all storage areas are located in the interior portion of the premises.

(3) The premises may include more than one building for storage and distribution purposes only if the property on which the buildings are located is contiguous and the licensee has possessory interest in the property on which the buildings are located. To seek approval, the licensee shall submit a form provided by the department. All buildings on the premises are subject to suitability requirements in (2).

(4) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.

(5) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-103, 16-4-108, 16-4-402, MCA
History: NEW, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.149 Winery, Brewery, and Distillery - Premises Suitability Requirements

(1) The department shall determine the suitability of the premises where an alcoholic beverage manufacturer proposes to operate a license, when a party applies to obtain a license, transfers ownership interest in an existing license requiring the vetting of a new party pursuant to 16-4-401, MCA, changes the location where a license will be operated, makes alterations to a premises with a floor plan that the department approved, or applies to operate as a colocated license. The requirements of this rule also apply to an alcoholic beverage manufacturer operating at a colocated premises.

(2) The premises of a manufacturer may be considered suitable only if:

(a) the applicant or licensee has possessory interest in the premises;

(b) the applicant or licensee has adequate control over the premises;

(c) a single alcoholic beverage license of any kind will be operated on the premises, except as authorized under an approved alternating proprietor arrangement;

(d) the premises are identified by a unique address;

(e) building, health, and fire code approval is obtained;

(f) the premises are located in one building or a specific portion of one building, except that a patio/deck may extend the premises beyond the interior portion of the building. The interior portion of the premises must comply with the requirements of 16-3-311(3), MCA. If the premises are located in a portion of a building, the premises must be separated by permanent floor-to-ceiling walls from any other licensed alcoholic beverage business, except as provided in 16-3-311(8) and (9), MCA. The only access from the premises to another licensed alcoholic beverage business may be through lockable doors in the permanent floor-to-ceiling wall, except as provided in 16-3-311(8) and (9), MCA;

(g) there is interior access to any interior portion of the premises;

(h) all storage areas are located in the interior portion of the premises;

(i) access by unauthorized persons to manufacturing areas is restricted; and

(j) it is readily determinable that a manufacturer operates at the premises due to outdoor signage and the existence of the equipment necessary to undertake the activities for which the premises are licensed.

(3) The premises may include more than one building for manufacturing purposes only if the licensee has possessory interest in the property on which the buildings are located. To seek approval, the licensee shall submit a form provided by the department and include verification that the Alcohol and Tobacco Tax and Trade Bureau approved the licensee's registration to operate any additional building under the manufacturer's existing federal permit or notice. All buildings on the premises are subject to the suitability requirements in (2).

(4) A domestic brewery, winery, or distillery may operate a warehouse anywhere in the state only if the warehouse is used exclusively for storage. To seek approval, the licensee shall submit a form provided by the department and include verification, if applicable, that the Alcohol and Tobacco Tax and Trade Bureau approved the licensee's registration to operate the warehouse. A licensee may seek approval for more than one warehouse. Each warehouse must have a separate storage depot license. All warehouses are subject to the suitability requirements in (2).

(5) In addition to all other requirements, a manufacturer's premises with a sample room shall be considered suitable only if:

(a) there is a single contiguous sample room;

(b) the sample room is located in the interior portion of the premises;

(d) the sample room contains a drink preparation area. The premises may have more than one drink preparation area, including drink preparation areas on the patio/deck, subject to department approval;

(e) the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any drink preparation area; and

(f) except as provided in 16-3-311(1), MCA, and ARM 42.13.1108, self-service devices and vending machines are not used to serve alcoholic beverages.

(6) A manufacturing premises with a sample room may have a patio/deck. The patio/deck will be considered suitable only if:

(a) building, health, and fire code approval is obtained;

(b) the patio/deck is contiguous with and immediately accessible from the sample room, except where the department approves a path connecting the sample room and the patio/deck. The use of a path may only be approved if the licensee holds possessory interest in the path, the path is clearly marked, and the department determines that sufficient physical safeguards are in place to ensure proper service and consumption of alcoholic beverages;

(d) the physical layout and equipment prevent the self-service of alcoholic beverages. This includes a prohibition against the service of alcoholic beverages through self-service devices and vending machines. Reach-in coolers and open shelving are prohibited unless they are located in a drink preparation area and the department determines that sufficient physical safeguards are in place to prevent the self-service of alcoholic beverages.

(7) A distillery premises may only include one sample room, regardless of the number of manufacturing buildings the licensee operates.

(8) The premises must meet and maintain compliance with all suitability standards in place at the time the premises are inspected. The department may, at any time, verify that the premises remain in compliance with all suitability standards in place at the time the suitability of the premises was last determined. Upon determining that the premises do not meet all applicable suitability standards, the department may deny an application or take administrative action against a licensee, including license revocation.

(9) The privileges granted under a license extend only to the premises depicted in the floor plan approved by the department. The licensee shall follow the process in ARM 42.13.106 for a premises alteration.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-311, 16-3-411, 16-4-102, 16-4-312, 16-4-402, MCA
History: NEW, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.150 Alcoholic Beverage Industry Trade Shows

(1) For the purpose of this rule, an alcoholic beverage industry trade show means an event sponsored by the department, another state agency of Montana, or a nonprofit association representing an alcoholic beverage group, where alcoholic beverage manufacturers showcase their products to industry trade show attendees.

(2) Alcoholic beverage industry trade shows may only be held if prior approval is obtained from the department. A trade show sponsor must electronically submit an industry trade show application to the department at least 30 days prior to the alcoholic beverage industry trade show.

(3) Attendees of an alcoholic beverage industry trade show are limited to the following persons invited by the event sponsor: licensees, persons employed in the alcoholic beverage industry or a related industry, or family members of such persons, and include public officers, candidates for public office, and public employees involved in the alcoholic beverage industry, or related industry. A related industry includes but is not limited to gambling, food preparation, and other professional services provided to alcoholic beverages licensees.

(4) The department, a state agency of Montana, or a nonprofit association representing an alcoholic beverage industry may not sponsor more than two alcoholic beverage industry trade shows per year.

(5) An alcoholic beverage industry trade show may be held at:

(a) the licensed premises of an all-beverages licensee or on-premises consumption beer and wine licensee;

(b) a location catered by an all-beverages licensee or on-premises consumption beer and wine licensee; or

(c) a location not otherwise licensed if the trade show sponsor has commercial general liability policy (CGL) with liquor liability coverage or has obtained an event liability insurance policy (with liquor liability coverage) for the trade show with coverage limits no less than $1 million per occurrence / $2 million aggregate.

(6) Except as provided in (8), a beer manufacturer or a beer manufacturer's employees or agents who intend to provide beer at an industry trade show or a table wine manufacturer or the table wine manufacturer's employees or agents who intend to provide table wine at an industry trade show must purchase the beer or table wine, for no more than the ordinary retail price, from:

(a) the all-beverage licensee or on-premises consumption beer and wine licensee hosting the industry trade show if the trade show is held at a location allowed for in (5)(a) or (5)(b); or

(b) any all-beverage licensee or on-premises consumption beer and wine licensee if the industry trade show is held at a location allowed for in (5)(c).

(7) Except as provided in (8), a vendor, as defined in ARM 42.11.105, with a current vendor permit, as provided in ARM 42.11.213, may request a trade show case from the department for use at an industry trade show. A trade show case means a case of product used by a registered vendor representative for promoting a vendor's products to attendees of an industry trade show. For the purposes of this rule, product means a liquor item identified by a unique identification number or stock-keeping unit.

(a) Except as provided in 16-4-311, MCA, the vendor must ship the trade show case to the state liquor warehouse at no charge to the department.

(b) In order for an industry trade show case to be removed from bailment at the state liquor warehouse, a vendor must submit a request electronically on a form provided by the department at least seven days prior to the requested ship date to the agency liquor store.

(c) A trade show case must be purchased by a registered vendor representative, as defined in ARM 42.11.211, from an agency liquor store at a cost of $12.00 per case.

(8) An alcoholic beverage manufacturer may use its own equipment, trucks, and employees or use a common carrier to deliver alcoholic beverages it produces from its premises to the alcoholic beverage industry trade show location.

(9) An alcoholic beverage trade show held at a licensed premises or at a location described in (5)(b) must serve only the types of alcoholic beverages authorized under the retail license and catering endorsement, where applicable.

(a) The alcoholic beverage manufacturer or its employees may serve samples with the permission of the licensee.

(b) All persons serving samples at an alcoholic beverage industry trade show shall be compliant with the Responsible Alcohol Sales and Service Act prior to the alcoholic beverage industry trade show.

(d) The service of samples must be conducted so as to prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated.

(10) For an alcoholic beverage industry trade show not held at a licensed premises or at a location described in (5)(b), the allowable sample serving size per product, per person shall not exceed two ounces for liquor products, 12 ounces for beer products, and five ounces for wine products.

(11) At the conclusion of an alcoholic beverage industry trade show, any remaining alcoholic beverages may not be given away to attendees and must be retained by the alcoholic beverage manufacturer or vendor, the alcoholic beverage manufacturer or vendor's employees, or registered vendor representatives.

(12) An alcoholic beverage manufacturer is responsible for the payment of all applicable alcoholic beverage taxes on alcoholic beverage samples provided at an alcoholic beverage industry trade show which are not purchased from a licensed retailer or agency liquor store.

(13) A licensee who hosts or caters an industry trade show is ultimately responsible for ensuring compliance with all alcoholic beverage laws and regulations, violations of which may subject the licensee to administrative action.

History

Authorizing statute(s): 16-1-303, 16-1-307, MCA
Implementing statute(s): 16-1-307, 16-3-107, 16-4-201, 16-4-204, 16-4-311, MCA
History: NEW, 2019 MAR p. 1173, Eff. 8/10/19; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.151 Limited All-Beverages License for Continuing Care Retirement Community – Campus and Premises Suitability Requirements and Conditions for Operating

(1) The department shall determine the suitability of the campus and premises when a continuing care retirement community applies to obtain a limited all-beverage license provided in 16-4-315, MCA, changes the campus where the license will be operated, or makes alterations to the department-approved premises.

(2) The continuing care retirement community campus and premises may be considered suitable only if:

(a) the applicant or licensee has possessory interest in the campus and licensed premises;

(b) the applicant or licensee has adequate control over the premises;

(d) the campus is identified by a unique address;

(e) the sales, service, storage, and delivery of alcoholic beverages are done within the boundaries of the continuing care retirement community campus and in department-approved buildings and structures in compliance with 16-4-315, MCA, ARM 42.12.153, and this rule;

(f) building, health, and fire code approvals are obtained, as required by state or local law;

(h) the premises are not located where a local government ordinance prohibits the sale of alcoholic beverages;

(i) the premises complies with the licensing restrictions provided in 16-3-306, MCA;

(j) there are no signs, posters, or advertisements displayed on the exterior of the premises that identify any brewer, beer importer, or wholesaler in any manner. This prohibition does not apply to temporary advertisements allowed under 16-3-244, MCA;

(k) a plat of the continuing care retirement community campus is submitted to the department that shows the campus boundaries and any buildings and structures used in the sales, service, delivery, and storage of alcoholic beverages, including any noncontiguous storage areas;

(l) one or more floor plans are submitted that accurately state the dimensions of the premises, includes the applicant or licensee's name; alcoholic beverage license number, if applicable; physical address and date of application; and identifies dining areas, service locations, and any storage areas;

(m) the premises includes at least one service location but may have more than one, including portable bar or dispensing equipment, subject to department approval;

(n) alcoholic beverages will not be sold through a drive-up window;

(o) the physical layout and equipment utilized provide sufficient physical safeguards to prevent the self-service of alcoholic beverages at any drink preparation area; and

(p) vending machines are not used to serve alcoholic beverages, except for self-pour devices provided in 16-3-311(1), MCA, and ARM 42.13.1108.

(3) The premises must meet and maintain compliance with all suitability standards in place at the time the premises was last approved by the department. The department may, at any time, verify that the premises remain in compliance with those suitability standards. Upon determining that the premises does not meet all applicable suitability standards, the department may deny an application or take administrative action against the licensee, including license revocation.

(4) The licensee shall follow the process in ARM 42.13.106 for a premises alteration. Alterations to residential areas or other areas where alcoholic beverages are not sold or served from do not require approval from the department.

(5) In addition to all other alcoholic beverage licensing requirements, a limited all-beverages continuing care retirement community licensee shall:

(a) only purchase and possess on the premises liquor and fortified wine from an agency liquor store, beer from a beer wholesaler or brewery, and table wine from a table wine distributor or winery, except for alcoholic beverages obtained elsewhere by residents of the continuing care retirement community for consumption in residential areas;

(b) sell or serve alcoholic beverages only from approved drink preparation areas;

(d) prevent the consumption or possession of alcoholic beverages outside of residential areas between 2 a.m. and 11 a.m. by removing all alcoholic beverages from individuals' possession by 2 a.m.;

(e) prevent the consumption or possession of alcoholic beverages on the campus and premises by persons who are under 21 years of age, or actually, apparently, or obviously intoxicated, in accordance with 16-3-301, MCA; and

(f) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises except for alcoholic beverages obtained elsewhere by residents of the continuing care retirement community for consumption in residential areas.

History

Authorizing statute(s): 16-1-303, 16-4-315, MCA
Implementing statute(s): 16-3-244, 16-3-309, 16-3-311, 16-4-315, 16-4-402, 16-4-405, 16-6-303, MCA
History: NEW, 2020 MAR p. 497, Eff. 3/14/20; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.152 Noncontiguous Alcoholic Beverage Storage Areas; Resort Alternate Retail Alcoholic Beverage Storage Facilities

(1) The use of a noncontiguous alcoholic beverage storage area by an on-premises retail licensee is permissible, as provided in 16-3-311, MCA. Except for a noncontiguous storage area for a continuing care retirement community under 16-4-315, MCA, all other noncontiguous alcoholic beverage storage areas may be located within ten miles of the licensee's premises as measured in a straight line from the nearest entrance of the licensed premises to the nearest entrance of the noncontiguous storage area.

(2) The use of resort alternate alcoholic beverage storage facilities is permissible, as provided in 16-3-311 and 16-4-213, MCA.

(3) Except as provided in 16-3-311(7), MCA, a noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility may be used for the storage of alcoholic beverages and must have adequate physical safeguards to prevent access by individuals other than the licensee or their employees. A noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility may also be used for the storage of items related to the alcoholic beverage business including supplies, equipment, and vehicles.

(4) A licensee must submit the following to the department via its online licensing portal for approval of either a noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility:

(a) a completed noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility request form, as applicable;

(b) the application fee provided in 16-3-311 or 16-4-213, MCA, as applicable;

(d) a copy of the floor plan for a noncontiguous alcoholic beverage storage area or the resort site plan and floor plan for a resort alternate alcoholic beverage storage facility;

(e) documentation of the licensee's possessory interest in the noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility;

(f) documentation demonstrating that a noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility meets the requirements of 16-3-311 and 16-4-213, MCA, as applicable, and (3);

(g) evidence of approvals from state or local officials that the premises meet building, health, and fire code requirements, as required by state or local law; and

(h) any additional documentation the department deems reasonably necessary in order to approve the licensee's request.

(5) Upon its acceptance and review of a licensee's submissions in (4), the department will arrange an inspection of a noncontiguous alcoholic beverage storage area or a resort alternate alcoholic beverage storage facility and will review the inspection findings.

(6) The department will notify the licensee, in writing, of the department's approval or denial of the noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility.

(7) Upon approval, a licensee's license will be updated to reflect the location of the noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility. The licensee must display a copy of the license in a prominent place at the noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility.

(8) No alcoholic beverages may be stored by the licensee at the noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility prior to receiving department approval.

(9) The selling, giving away, or consumption of alcoholic beverages at a noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility is prohibited.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-3-311, 16-4-213, MCA
History: NEW, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.153 Additional Retail Service Buildings or Structures

(1) In addition to the main licensed premises, a golf course beer and wine licensee or an all-beverages licensee operating a license at a golf course may use an additional building or structure, one per nine holes of the golf course that is designed to serve golfers alcoholic beverages during the course of play.

(2) In addition to the main licensed premises, an all-beverages licensee or resort all-beverages licensee may sell alcoholic beverages for consumption on the premises in one or more of the following:

(a) up to two licensed alcohol service structures separate from the main licensed premises of a hotel, if the premises is not located within the quota area boundaries of an incorporated city or incorporated town;

(b) a permanent, licensed alcohol service structure in a swimming area separate from the main licensed premises;

(d) an additional structure that constitutes the clubhouse or primary indoor recreational quarters of the golf course separate from the main licensed premises.

(3) A continuing care retirement community licensee may sell alcoholic beverages for consumption on its campus and premises from the following locations:

(a) any buildings or structures as long as those service locations are on the campus and include food service;

(b) patios, decks, or controlled lawn areas as long as those areas are immediately adjacent to the main licensed premises and located on the campus; and

(4) The department may approve a licensee for storage of alcoholic beverages at an additional retail service building if adequate physical safeguards prevent access by individuals other than the licensee or its employees.

(5) A licensee must submit the following to the department via its online licensing portal for approval of an additional retail service building or structure:

(a) a completed additional retail service building request form;

(b) the application fee provided in 16-3-302, MCA, as applicable;

(d) a copy of the floor plan for each proposed additional retail service building or structure;

(e) a plat-style map showing the location of each proposed additional retail service building or structure on the licensee's property;

(f) documentation of the licensee's possessory interest in the proposed additional retail service building or structure;

(g) evidence of approvals from state or local officials that the proposed additional retail service building or structure meets building, health, and fire code requirements, as required by state or local law; and

(h) any additional documentation the department deems reasonably necessary to approve the licensee's request.

(6) Upon its acceptance and review of a licensee's submissions in (5), the department will arrange an inspection of the proposed additional retail service building or structure and review the inspection findings.

(7) The department will notify the licensee, in writing, within ten business days of the completed investigation of its approval or denial of the additional retail service building or structure.

(8) Upon approval, an updated license will be issued and reflect the location of any additional retail service building or structure. The licensee must display a copy of the license in a prominent place at any additional retail service building or structure.

(9) No alcoholic beverages may be stored or served by a licensee at a proposed additional retail service building or structure prior to receiving department approval.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-302, 16-4-315, MCA
History: NEW, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.12.154 Guest Ranches

(1) An all-beverages licensee, an on-premises consumption beer and wine licensee, or an applicant for an all-beverages license or an on-premises consumption beer and wine license operating its license at a guest ranch, as described in 16-3-302(5), MCA, shall submit the following to the department:

(a) a plat-style map that accurately describes the guest ranch property including all indoor and outdoor portions of the premises; the permanent building where alcoholic beverages will be served; and indicators of the property's boundaries;

(b) a written description of the overnight lodging, dining, and onsite outdoor recreational activities offered at the guest ranch;

(c) a written description of the property line if a perimeter barrier is not used to confine the service of alcoholic beverages only to those areas under control of the licensee; and

(d) any other documents the department deems reasonably necessary to reach a final decision.

(2) In addition to the documents listed in (1), an applicant for a new license operating at a guest ranch must also comply with the applicable licensure requirements under the Alcoholic Beverage Code and ARM 42.12.101.

(3) If the documents required in (1) and (2), as applicable, are not provided, the department will notify the licensee or applicant, in writing, and provide an opportunity to correct any stated deficiencies.

(4) The department will notify the licensee or applicant, in writing, of the approval or denial of the guest ranch operation.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, MCA
History: NEW, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.155 Third-Party Delivery License and Third-Party Delivery Drivers

(1) An application for a third-party delivery license shall be made through the department’s online licensing portal. In addition to the license application, the applicant must pay the initial license fee required by 16-4-501, MCA.

(2) A third-party delivery license expires on June 30 and can only be renewed by completing a renewal application through the department’s licensing portal and paying the annual renewal fee. A third-party delivery licensee may not offer delivery service on an expired license.

(3) A third-party delivery driver must verify the age of the recipient. A third-party delivery driver may use the following forms of identification to verify age:

(a) any state-issued driver’s license or identification card;

(b) any Canadian government-issued driver’s license or identification card;

(d) any federally recognized tribal identification card; and

(e) any government-issued identification in a hard-copy or digital version.

(4) A third-party delivery driver may use scanning software technology to aid in the age verification of the recipient.

History

Authorizing statute(s): 16-1-303, 16-4-307, MCA
Implementing statute(s): 16-4-307, 16-4-501, MCA
History: NEW, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Subchapter 42.12.2 License Transfer, Suspension, and Revocation

Mont. Admin. R. 42.12.201 Assignment or Transfer of License

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-204, MCA
History: NEW, Eff. 11/3/75; REP, 1985 MAR p. 167, Eff. 2/15/85.

Mont. Admin. R. 42.12.202 Transfers Within Combined Areas

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-105, 16-4-201, MCA
History: NEW, 1977 MAR p. 966, Eff. 11/26/77; AMD, 1978 MAR p. 394, Eff. 3/25/78; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2018 MAR p. 1613, Eff. 8/11/18.

Mont. Admin. R. 42.12.203 Inter-Quota Area Transfers

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-201, MCA
History: NEW, 1978 MAR p. 727, Eff. 5/26/78; AMD, 1984 MAR p. 326, Eff. 2/17/84; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.12.204 Treatment of a License of an Incapacitated or Deceased Licensee; Notice and Documentation Requirements

(1) Pursuant to 16-4-431, MCA, in the event of the death or the judicial determination of incapacity of a licensee, the appointed conservator, guardian, personal representative, executor, or administrator must notify the department within 90 days of their appointment. In any event, the department must be notified within 180 days of the death or the judicial determination of incapacity of a licensee or owner of a licensee.

(2) An appointee's notice under (1) may be made by telephone, in writing, via electronic mail, or through submission of a department-provided form.

(3) Documentation of the appointee's appointment must be provided to the department within 30 days of the notice required in (1).

(4) An appointee may request department approval to continue operation of the licensed business for the duration of the existing license and to renew the license when it expires. In such case, the appointee must meet the licensure requirements set forth in 16-4-401, MCA, and pay all applicable license renewal, fingerprint, and license application fees.

(a) The department will not authorize an appointee's continued operation of a licensed business absent the documentation required in (3).

(b) If an appointee does not meet the requirements of (3) or this section, or elects not to operate the licensed business, the department shall place the license on approved non-use pending the outcome of a successor appointee, the sale or transfer of the affected license described in (5), or receipt of a judicial determination of licensee's restored capacity. This non-use is not subject to the requirements of 16-3-310, MCA.

(5) An appointee, as personal representative of a licensee or owner of a licensee, must provide the department with a certified copy of the decree of distribution or order of settlement confirming the sale and/or transfer of the license to a distributee or purchaser. The distributee or purchaser of an alcoholic beverages license must comply with all licensing criteria before the transfer of the license will be approved by the department.

(6) If an alcoholic beverages license is owned by joint tenants with right of survivorship, ownership of the license may be amended to reflect the surviving joint tenant or tenants, upon presentation of proof of death of the decedent joint tenant or tenants.

(7) In all other cases, upon the death of a licensee it is necessary to apply for transfer of ownership of the license as provided by 16-4-204 and 16-4-404 , MCA.

History

Authorizing statute(s): 16-1-303, 16-4-431, MCA
Implementing statute(s): 16-4-204, 16-4-404, 16-4-431, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.205 Requirements When License Subject to Lien

(1) All-beverages and on-premises beer and wine licenses may be subject to a mortgage, security interest, and other valid lien. Upon written request to the department, accompanied by a copy of the note or mortgage, security agreement, or other loan document (in which the license or licenses to be affected are described with common certainty such as inclusion of license number), together with a fee as required in ARM 42.12.111, the department will add the name of the mortgagee, secured party, or other lien holder, which must be endorsed upon the license. All such requests shall be upon forms prescribed by the department and signed in each case by the licensee and the mortgagee, secured party, or other lien holder.

(2) No transfer of any license subject to any mortgage security interest, or other lien shall be approved unless the mortgagee, secured party, or lien holder shall subscribe and acknowledge the instrument of assignment. If the mortgagee, secured party, or lien holder is deceased, or otherwise unavailable, the instrument of assignment may be subscribed and acknowledged by the personal representative, heir, devisee, or other person upon providing sufficient proof that the person has authority to act on behalf of the estate or has otherwise received the right to the security interest or lien.

(3) At such time as any mortgage, security interest, or lien affecting any license has been satisfied and fulfilled, the name of the mortgagee, secured party, or lien holder shall be removed upon written request of all parties in interest. If the mortgagee, secured party, or lien holder is deceased, or otherwise unavailable, the written request may be made by the personal representative, heir, devisee, or other person upon providing sufficient proof that the person has authority to act on behalf of the estate or has otherwise received the right to the security interest or lien. Any name of a mortgagee, secured party, or lien holder may also be removed upon the written request of the licensee or applicant for the license if accompanied by a court order releasing the security interest or lien, or other sufficient proof showing that the security interest or lien has expired, been discharged, or otherwise extinguished.

(4) Alcoholic beverage licenses may be subject to security interests as defined in 30-1-201, MCA, and other valid liens. The perfection of a security interest or other lien in an alcoholic beverages license does not depend upon filing with the department, but rather by the statutory requirements, which apply to the particular security interest or lien. If a secured party or a lien creditor, as defined in 30-9A-102, MCA, desires to give additional public notice, he may do so by filing a claim of security interest or other lien with the department. The department acts only as an additional source of public notice for voluntarily filed claims of security interest and other liens. The licensee must be the debtor. A loan guarantee by a licensee does not establish a valid security interest or lien by the lender under this rule.

(5) The consent of a secured party or a lien creditor is not required by the department to transfer a license. Persons who have filed a claim of a security interest or lien will be given notice by the department of any application for transfer of the license.

(6) Upon written request to the department, together with a fee as required in ARM 42.12.111, the name of a person claiming a security interest shall be endorsed upon the license and shall be kept on file with the department. All such requests shall be upon forms prescribed by the department and signed in each case by the licensee and the person claiming the security interest.

(7) The name of a lien creditor shall not be endorsed upon the license. However, upon written request to the department, the department shall keep the name of the lien creditor on file. The request must be accompanied by sufficient proof of perfection of the lien claimed. No fee is required.

(8) Any notice of security interest or other lien may be deleted from the department's file upon written request of the secured party or lien creditor on forms prescribed by the department. If the secured party or lien creditor is deceased, or otherwise unavailable, the written request for deletion may be made by a personal representative, heir, devisee, or other person upon providing sufficient proof that the person has authority to act on behalf of the estate or has otherwise received the right to the security interest or lien. Any notice of security interest or other lien may also be deleted from the department's file upon the written request of the licensee or applicant for the license if accompanied by a court order releasing the security interest or lien, or other sufficient proof showing that the security interest or lien has expired, been discharged, or otherwise extinguished.

(9) A security interest or other lien may be foreclosed upon in any manner provided by law. In nonjudicial foreclosures, the department will require sufficient documentation that the proper foreclosure proceedings were followed, pursuant to 16-4-801, MCA. Purchasers of a license at a foreclosure sale must apply to the department for transfer of the license and are subject to all statutes and rules required of any other applicant.

(10) Sections (1) through (3) will apply to all security interests and liens filed with the department prior to September 1, 1990. Beginning September 1, 1990, (4) through (9) will apply to all new security interests and liens filed with the department.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-204, 16-4-404, 16-4-801, MCA
History: NEW, Eff. 11/3/75; AMD, 1990 MAR p. 1266, Eff. 6/29/90; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.206 Prohibition and Exception Regarding Leasing of License

(1) A license issued under the provisions of Title 16, chapter 4, parts 1 through 5, MCA, is a privilege personal to the licensee, and in no case shall the licensee lease the license to any other person.

(2) Golf course beer and wine licenses owned by the state, a unit of the university system, or a local government, fairground complex beer and wine licenses owned by a political subdivision of the state, and airport all-beverages licenses are exempt from this rule.

(3) The lessee of the licenses in (2) are required to qualify under 16-4-401, MCA.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-109, 16-4-208, 16-4-306, 16-4-401, 16-4-404, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2011 MAR p. 165, Eff. 2/11/11.

Mont. Admin. R. 42.12.207 Application Approved Subject to Final Inspection of Premises

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-104, 16-4-106, 16-4-201, 16-4-402, 16-4-404, MCA
History: NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; REP, 2020 MAR p. 1177, Eff. 6/27/20.

Mont. Admin. R. 42.12.208 Temporary Operating Authority

(1) The department may grant an applicant temporary operating authority, as provided in 16-4-433, MCA. The applicant must submit an application meeting the requirements of ARM 42.12.101 and intend to operate the licensed business pending final approval.

(2) Temporary operating authority will be issued for one period not to exceed 180 days.

(3) If temporary operating authority has expired or been revoked, the applicant shall cease all operations and, in the case of a transfer of ownership, the licensee shall resume operations or place the license on nonuse.

(4) Temporary operating authority will be immediately revoked if the applicant to whom temporary operating authority was granted, or the applicant's employees, violate any provisions of Title 16, MCA, or department rules. Such violations may affect the final decision of the department.

(5) Any proposed fine, suspension, or revocation arising out of a violation will be assessed against, and is the responsibility of, the recorded owner of the license.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-404, 16-4-433, MCA
History: NEW, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1990 MAR p. 1266, Eff. 6/29/90; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2011 MAR p. 165, Eff. 2/11/11; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2022 MAR p. 244, Eff. 2/12/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.209 Transfer of Ownership of a License

(1) An ownership interest may be transferred to another qualified person only pursuant to means legally authorized for the transfer of personal property in Montana, such as when the person:

(a) is a purchaser upon a bona fide sale;

(b) is the distribute of a license from a personal representative of the estate of a deceased licensee;

(d) is gifted the license and the donor completely transfers ownership interest, as provided in Title 70, chapter 3, part 1, MCA.

(2) Except as allowed in ARM 42.12.118, an ownership interest may not be transferred until a transfer application is submitted to the department and the department approves the application.

(3) A current ownership interest of less than 15 percent may not be increased to 15 percent or more until an application reflecting the proposed increase is submitted to the department and the department approves the application.

(4) The application process in ARM 42.12.101 shall be followed unless an abbreviated application is authorized by ARM 42.12.118.

(5) Before approving a transfer of ownership application, the department shall make a thorough investigation as to the qualifications of an applicant and the suitability of the premises proposed for licensing. The department must also determine that a transferred ownership interest is being independently exercised by a transfer to a new owner and will not remain under the control of the transferor.

(6) The department shall not approve an application for a transfer of an ownership interest where the current owner is not current on the filing or payment of Montana state taxes or liquor fees, fines, or penalties.

(7) Prior to the department granting its written approval of a transfer of ownership interest:

(a) a certificate, stock, or other evidence of the proposed ownership interest may not be registered in the licensee's records; and

(b) earnest money may be paid to the license seller, not to exceed five percent of the license purchase price, but any additional funds or other consideration for the license or alcoholic beverage inventory may not be exchanged unless:

(i) temporary operating authority is granted, but any consideration other than earnest money must be returned to the buyer in the event the application is not approved; or

(ii) the consideration is held in escrow.

(8) The provisions of this rule do not apply to the:

(a) transfer of a security interest in a license pursuant to 16-4-801, MCA;

(b) addition of an individual or entity as a less than 15 percent owner;

(d) foreclosure of a security interest in a license or in an ownership interest (ARM 42.12.211 applies).

(9) A person or entity that is not approved by the department is prohibited from controlling or participating in the licensed operation in any capacity reflecting an ownership interest. A licensee's allowance of an undisclosed ownership interest shall constitute a violation and may subject the licensee to administrative action, including revocation of the license.

(10) The department, in its sole discretion, may waive an application requirement set forth in this rule.

(11) The buyer of the license can acquire the seller's alcoholic beverage inventory as provided in 16-4-404, MCA.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, 16-4-402, 16-4-404, MCA
History: NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2011 MAR p. 165, Eff. 2/11/11; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2020 MAR p. 1177, Eff. 6/27/20; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.210 Completed Transactions Under Bona Fide Sales

(1) A transaction under a bona fide sale is complete only if the department receives an application for a license submitted pursuant to ARM 42.12.101, and the department approves the application pursuant to 16-4-402, MCA, and this rule.

(2) An application will not be approved if the sale transaction:

(a) provides for a person other than the applicant to have an option to purchase the license;

(b) involves an escrow agent, unless the parties are required to report to the department all changes or assignments to the original escrow agreement within 30 days of the change;

(c) involves a loan from a noninstitutional lender or a loan guarantor, unless the loan from a noninstitutional lender has been approved in writing by the department, but this does not preclude a qualified owner of a license from lending money to the business operated under the license or from individually guaranteeing a debt incurred by the business operated under the license;

(d) involves a lessor of the licensed premises who is not qualified to own the license being applied for, unless the department approves in writing;

(e) involves an applicant who is or will be the manager of an associated business if the associated business is owned or controlled by a person who is not qualified to own the license being applied for, unless the department approves in writing; or

(f) involves any business relationship, with respect to the proposed alcoholic beverages business, with a person who is not qualified to own the license being applied for, unless the department approves in writing.

(3) An option to purchase represents an impermissible interference with the licensee's ability to control and operate the license. Such an option, with or without conditions, is prohibited because it constitutes an additional ownership interest in the license.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, 16-4-402, 16-4-404, MCA
History: NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2011 MAR p. 165, Eff. 2/11/11.

Mont. Admin. R. 42.12.211 Transfer of a License Due to Foreclosure

(1) A transfer of a license resulting from a foreclosure on a security interest requires an application to transfer the license to the secured party, if the secured party intends to operate the license, pursuant to ARM 42.12.101. This transfer is subject to the department's approval of the application pursuant to 16-4-402 , MCA, and this rule.

(2) A transfer of a license resulting from a foreclosure on a security interest requires the filing of documents evidencing the foreclosure if the secured party does not intend to operate or does not meet the requirements to hold the license pursuant to 16-4-401 and 16-4-801 , MCA. The documents must include either the defaulting party's written acknowledgment of default, evidence that a nonjudicial sale by the secured party has been made pursuant to the Uniform Commercial Code, or a court order foreclosing the defaulting party's interests in the license. Based on the foreclosure documents, the transfer may be approved pursuant to ARM 42.12.205. A foreclosing secured party may retain ownership of the transferred license in nonuse status for a period of no more than 180 days, and may, upon showing of good cause, receive one extension of 180 days. If the license has not transferred to a qualified purchaser within the time allowed, the license will be revoked.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-401, 16-4-402, 16-4-404, and 16-4-801, MCA
History: NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2004 MAR p. 1972, Eff. 8/20/04.

Mont. Admin. R. 42.12.212 Loan Standards

(1) The department will further evaluate a designated loan to determine if the transaction is in reality a loan or an ownership interest. A review of the transaction will be conducted by using standards found either in the Uniform Commercial Code, the Internal Revenue Code, or standards which are in accordance with generally accepted commercial lending practices.

(2) The department will decline to find a loan arrangement where the money borrowed has not been returned when due and alternate arrangements have not been memorialized in a written contract. Such an extended financial arrangement must be documented and available to the department.

(3) The department will require any noninstitutional lender to complete documents authorizing examination and release of information, a personal history statement, and fingerprint cards on forms provided by the department, as well as any contract, purchase agreement, or other documents from the lender deemed necessary to assess the suitability of an applicant's source of funding as required in 16-4-401, MCA.

(a) A loan agreement may not restrict the movement or transfer of a license.

(b) Cross collateralization language is unenforceable as it relates to loans secured by the liquor license as collateral.

(c) In the event of default, the lender's rights are protected under 16-4-801, MCA. Upon default, the license must be placed on nonuse status pending transfer to a qualified purchaser or temporary operating authority. The lender is prohibited from leasing the collateral.

(4) Institutional lenders may secure loans made to a license applicant or licensee with security interests in assets belonging to the license applicant or licensee. In securing institutional loans with security interests in the assets of a license applicant or licensee, an institutional lender may limit the movement of the assets, including a liquor license.

(5) For loans made to a license applicant or licensee, an institutional lender may require loan guarantees and may secure guarantee agreements with assets of the guarantor.

(6) A guarantor may make a payment on an institutional loan secured by a license, regardless of whether the institutional lender has exhausted its remedies against the licensee, and such payment will not cause an undisclosed ownership violation for the licensee, only if the following are applicable:

(a) the guarantor must be an owner of applicant/licensee, i.e., partner, shareholder, member;

(b) the payment is made with the owner/guarantor's own funds or funds borrowed from an institutional source or department-approved noninstitutional source;

(c) if the guarantor is not an owner, payment may only be made as a loan to the owners or licensed borrower/entity. Funds used to loan the money for the payment under the guarantee, must be the guarantor's own funds or funds borrowed from an institutional source. The guarantor must first be found by the department to be suitable as a source of credit as part of the application or loan approval process by submitting to the department a personal history statement and a complete set of fingerprint cards;

(d) a licensee having a loan secured by its license, and for which a loan guarantor has made payments on such loan on behalf of the licensee, must notify the department within 30 days of the guarantor's payment or on the date on which the licensee's renewal application is due, whichever occurs first, whether the payments made under a loan guarantee agreement have been elected to be treated as loans, as paid in capital, or as other equity contributions; and

(e) if the guarantor elects to treat the payments as loans to the licensee, the licensee must follow requirements for disclosing noninstitutional lenders.

(7) If the guarantor elects to treat payments as an equity contribution, and such election changes the percentage of ownership in the license, the licensee must notify the department at the time of the election to disclose the change in percentage.

(8) Prior department approval is not required on loans to a licensed entity by an approved (licensed) owner of the entity (shareholder, member, partner) under the following conditions:

(a) the loan is used to meet an obligation of the licensed entity that cannot be met with its existing operating accounts and reserves;

(b) the funds loaned to the licensed entity must be those of the owner or funds borrowed from an institutional source;

(c) the loan must be memorialized by an agreement between the licensed entity and owner. The loan agreement must meet the department's evaluation standards;

(d) the borrower's and lender's financial records must accurately reflect the transaction; and

(e) failure to maintain adequate records of the transaction or source of funds loaned will be considered a violation of this rule.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, 16-4-402, 16-4-404, 16-4-801, MCA
History: NEW, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2011 MAR p. 165, Eff. 2/11/11.

Mont. Admin. R. 42.12.213 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, 16-4-402, 16-4-404, 16-4-801, MCA
History: NEW, 2011 MAR p. 165, Eff. 2/11/11; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.221 Penalties for Violation of Rules or Statutes

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-4-406, 16-6-305, and 16-6-314, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.12.222 Procedure Upon Revocation, Lapse, or Suspension of License

(1) When any alcoholic beverages license is suspended or revoked by the department, the department shall cause a notice to be posted on the inside of the licensed premises so that the notice can be seen from the outside, stating that the license has been suspended or revoked. The notice must identify the number of the license, the name of the licensee, the reason for the suspension or revocation, and the period of suspension. The suspension or revocation notice issued by the department must be dated and signed. The notice must be posted at all times during the period of suspension. In the case of a revocation, the notice must be posted on the premises for a period of 10 days. If the notice is removed or caused to be removed by the licensee or any employee of the licensee during a period of suspension, the license shall be permanently revoked and the licensee must be so notified in writing at the time the notice is posted. The license or licenses suspended will be held by the department during the period of suspension. The department may waive the notice and posting requirements for revocations provided in this rule.

(2) A revoked or lapsed license affects a license quota area as follows:

(a) if an action against the license causes the creation of the last remaining license for that license type in the quota area, the department shall publish the availability of a retail alcoholic beverage license in accordance with ARM 42.12.502; or

(b) if the number of licenses issued for a quota area exceeds statutory limitations, the license will cease to exist and the department will adjust the license quota accordingly.

(3) If a revoked or lapsed beer license originally issued within an incorporated city quota area before October 1, 1997, is reinstated, the license may not be used for premises where gambling is conducted.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-303, 16-4-406, 16-4-430, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1994 MAR p. 2974, Eff. 11/11/94; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2003 MAR p. 21, Eff. 1/17/03; AMD, 2022 MAR p. 1707, Eff. 8/27/22.

Subchapter 42.12.3 Special Licenses and Permits

Mont. Admin. R. 42.12.301 Resort Licenses; Non-Resort Licenses Operating on Resorts; Delivery and Curbside Pickup

(1) The issuance of resort all-beverages licenses pursuant to 16-4-213, MCA, is governed by all other applicable provisions of Title 16, MCA, and the rules of the department.

(2) Other non-resort licenses are allowed within a defined resort area and such licenses are not considered for purposes of determining the number of allowable resort all-beverages licenses.

(3) A resort all-beverages licensee may deliver alcoholic beverages to guests staying in accommodation units, as provided in 16-4-213, MCA, after obtaining department approval and paying the statutory application fee.

(4) A non-resort on-premises consumption licensee may deliver alcoholic beverages anywhere within the resort area if the licensee has complied with the delivery endorsement requirements of ARM 42.13.1102, 42.13.1103, or 42.13.1105, as applicable.

(5) Both resort and non-resort licensees may conduct the sale of alcoholic beverages via curbside pickup, which may include the use of a drive-up window, provided the licensee's premises comply with the premises suitability requirements of 16-3-311, MCA, and the applicable rules of the department.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-312, 16-4-201, 16-4-213, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2020 MAR p. 697, Eff. 4/18/20; AMD, 2022 MAR p. 1932, Eff. 9/26/22.

Mont. Admin. R. 42.12.302 Definitions

The following definitions apply to this subchapter:

(1) "Conduct" means to develop, direct, manage and control the event.

(2) "Consideration" means the receiving of money or other compensation for providing a service, such as a charge for admission or other refreshments at the event where alcoholic beverages are provided.

(3) "Enclosure" means an area with definable boundaries including, but not limited to, a fair grounds or baseball stadium grounds.

(4) "Fortified wine" means wine that contains more than 16 percent, but not more than 24 percent, of alcohol by volume. Fortified wine constitutes liquor for distribution purposes.

(5) "Ordinary retail price" means the everyday price established by the retailer for the sale of alcoholic beverages to consumers. For distilled spirits and fortified wine, the price cannot be less than the department's posted price.

(6) "Resort area" means a location in Montana developed for the primary purpose of providing a suitable location and the necessary facilities where the general public may engage in recreational activity. Recreational activity includes hiking, skiing, boating, swimming, horseback riding, and golfing. It does not include such activities as shopping, movie-going, dining, and sight-seeing.

(7) "Structure" means the buildings and facilities constructed within the recreational development to house the alcoholic beverage service, and facilities constructed for use in recreational or sporting activity.

History

Authorizing statute(s): 16-1-201, 16-1-303, MCA
Implementing statute(s): 16-1-201, 16-4-201, 16-4-213, 16-4-301, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2010 MAR p. 2227, Eff. 9/24/10; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2020 MAR p. 697, Eff. 4/18/20.

Mont. Admin. R. 42.12.303 Appraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-201, 16-4-202, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00; REP, 2020 MAR p. 697, Eff. 4/18/20.

Mont. Admin. R. 42.12.304 Plat Verification

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-201 and 16-4-202, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.

Mont. Admin. R. 42.12.305 Required Accommodations

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-201 and 16-4-202, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; REP, 2000 MAR p. 1762, Eff. 7/14/00.

Mont. Admin. R. 42.12.306 Financial Responsibility

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-201, 16-4-202, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2000 MAR p. 1762, Eff. 7/14/00; REP, 2020 MAR p. 697, Eff. 4/18/20.

Mont. Admin. R. 42.12.307 Resort Area Determination Application Process

(1) A developer or landowner seeking a resort area designation shall submit to the department, at its sole expense:

(a) a completed application for resort area determination;

(b) a plat or master plan of the resort area;

(c) details of the recreational resort facilities that are or will be within the resort area, as that definition is described in ARM 42.12.302;

(d) processing fees as provided in ARM 42.12.111;

(e) except as provided in (2), an appraisal from an appraiser, as defined in 37-54-102, MCA, which provides a detailed analysis of the current actual valuation of the resort or recreational facilities, including land and improvements, of not less than $10 million, at least $5 million of which valuation must be for a structure or structures within the resort area; and

(f) any other reasonably necessary documents for the department to reach a final decision.

(2) A developer or landowner may request the use of the department's statutory valuation of the property for property tax purposes to determine the current actual valuation requirements in (1)(e).

(3) If the documents in (1) are not provided, the department will notify the developer or landowner of the missing items and request submission prior to the hearing date.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-212, MCA
History: NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2020 MAR p. 697, Eff. 4/18/20; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.311 Passenger Carrier License

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-402, 16-1-403, 16-4-302, and 16-4-501, MCA
History: NEW, Eff. 11/3/75; REP, 1985 MAR p. 167, Eff. 2/15/85.

Mont. Admin. R. 42.12.312 Liquor Manufacturer's License

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-201, 16-4-312, 16-4-501, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2010 MAR p. 2227, Eff. 9/24/10; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.313 Public Wine or Beer Tastings

(1) Beer or wine tastings must be conducted by an on-premises consumption retail licensee, special permittee, or an on-premises consumption retail licensee with catering endorsement.

(2) In no case can a table wine distributor, a beer wholesaler, a winery/wine importer or a brewer/beer importer sponsor a wine or beer tasting other than at:

(a) a licensed retail premises that permits on-premises consumption except for a domestic winery as allowed under 16-3-411, MCA;

(b) a domestic winery as allowed under 16-3-411, MCA;

(d) a special event with a special permit; or

(e) a catered premise from an on-premises consumption retail licensee with a catering endorsement.

(3) A wine distributor, a beer wholesaler, a wine importer, or a beer importer sponsoring a tasting:

(a) must purchase the products to be used for the tasting from the on-premises consumption retail licensee, special permittee, or an on-premises consumption retail licensee with catering endorsement at the ordinary retail price; and

(b) can participate only by providing advice or information about the products.

(4) A winery or brewer sponsoring a tasting is required to comply with (3). In addition, the winery or brewer can participate in serving the product.

(5) An off-premises retail licensee may only participate in a wine tasting conducted by an on-premises consumption retail licensee by providing advice or information about the products. The off-premises consumption licensee may take orders for products to be picked up and paid for at the off-premises consumption licensee's premises.

(6) All beer and wine provided to the public at a tasting conducted by an on-premises consumption licensee must be purchased by the on-premises consumption retail licensee from a licensed table wine distributor, beer wholesaler, brewery, or winery. Beer and wine must be served by the on-premises consumption licensee with the exception of beer and wine manufacturers. Beer or wine may not be provided by another retail licensee.

(7) This rule shall not apply to beer or wine tastings which are held in a private home wherein no consideration, remuneration, contribution, donation, gift, or any other money or thing of value is solicited or charged for entry or attendance and which do not violate the provisions of 16-6-306, MCA. In addition, the rule does not apply to industry sampling where alcoholic beverage product samples are provided by the manufacturer or distributor of the products to a licensed distributor or retailer solely for the purpose of soliciting sales of the product to such distributors or retailer.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-213, 16-3-411, 16-4-105, 16-6-306, MCA
History: NEW, Eff. 11/3/75; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 2010 MAR p. 2227, Eff. 9/24/10.

Mont. Admin. R. 42.12.314 Restaurant Beer and Wine Service Operations

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-420, MCA
History: NEW, 2010 MAR p. 2227, Eff. 9/24/10; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.12.315 Sacramental Wine License

(1) An establishment desiring to sell sacramental wine pursuant to 16-4-313, MCA, may apply to the department by submitting a license application accompanied by a $100 licensing fee. The license renewal fee every year thereafter is $50 and must be renewed annually by July 1.

(2) An applicant must qualify for licensure under 16-4-401, MCA.

(3) On the application, an applicant operating in Montana must verify that the following requirements are met:

(a) the layout of the premises allows for licensee-only and/or employee-only control over the sale, service, and/or distribution of the sacramental wine;

(b) the floor plan accurately represents the physical layout of the premises and identifies where the sacramental wine will be stored;

(c) the applicant has adequate safeguards in place to prevent the sale, delivery, or giving away of alcoholic beverages to the public; and

(d) the premises is physically separated from any business under separate ownership from the licensed area by permanent walls.

(4) Applicants for a sacramental wine license are not subject to fingerprint or background checks.

(5) This type of license is nontransferable and not subject to the quota system as described in 16-4-105, MCA.

(6) A sacramental wine licensee may purchase sacramental wine from an agency liquor store, licensed foreign winery, licensed domestic winery, or a table wine distributor.

(7) Licensees must adhere to all laws and rules relating to the retail sale of wine for off-premises consumption.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-105, 16-4-313, 16-4-401, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14.

Mont. Admin. R. 42.12.316 Sacramental Wine Sales Restrictions by Alcohol Content

(1) Sacramental wine may be sold in Montana only in conformity with the guidelines provided in (2) through (6) of this rule.

(2) Sacramental wine licensees may sell sacramental wine containing up to 24 percent alcohol by volume to officials of churches or other religious organizations.

(3) Registered foreign wineries may sell sacramental wine containing up to 24 percent alcohol by volume to licensed table wine distributors.

(4) Licensed foreign wineries may sell sacramental wine containing not more than 16 percent alcohol by volume to licensed retailers and sacramental wine containing not more than 24 percent alcohol by volume to table wine distributors and sacramental wine licensees.

(5) Licensed domestic wineries may sell sacramental wine containing not more than 16 percent alcohol by volume to licensed retailers and sacramental wine containing not more than 24 percent alcohol by volume to table wine distributors and sacramental wine licensees.

(6) Table wine distributors may sell sacramental wine containing not more than 16 percent alcohol by volume to licensed retailers and sacramental wine containing not more than 24 percent alcohol by volume to sacramental wine licensees.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-107, 16-4-108, 16-4-313, MCA
History: NEW, 2014 MAR p. 1277, Eff. 6/13/14.

Mont. Admin. R. 42.12.317 Sacramental Wine Monthly Reports and Tax Returns

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-411, 16-4-313, MCA
History: NEW, 2014 MAR p. 1277, Eff. 6/13/14; REP, 2019 MAR p. 2058, Eff. 11/9/19.

Mont. Admin. R. 42.12.321 Application for Special Permit

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-301, MCA
History: NEW, Eff. 11/3/75; REP, 1984 MAR p. 325, Eff. 2/17/84.

Mont. Admin. R. 42.12.322 Processing of Special Permit Application

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-301, MCA
History: NEW, Eff. 11/3/75; REP, 1984 MAR p. 325, Eff. 2/17/84.

Mont. Admin. R. 42.12.323 Permissible and Prohibited Special Permit Activities

(1) A special permit issued pursuant to 16-4-301, MCA, entitles the holder to sell and serve beer and/or table wine at retail only at a booth, stand, or other fixed place of business within the exhibition enclosure, confined to specified premises or designated areas, described in the application and approved by the department. A holder of any such permit, or his agents or employees may also sell and serve beer and table wine in the grandstand or bleacher.

(2) A special event may only last for a maximum of three days except that each permit holder may have one special event per year that lasts up to seven days for a fair if it is a county, state, or regional fair that occurs no more than once per year, is held on a publicly owned fairgrounds, and is officially sanctioned by a government entity.

(3) Special permits issued under 16-4-301, MCA, entitle the holder to sell and serve liquor, beer, and/or table wine at retail only within the hall or building described in the application. A holder of a special permit, the holder's agents, or employees may not sell liquor, beer, and/or table wine to persons other than members of the permittee organization and their bona fide guests. Where posts of nationally chartered veterans organizations or lodges of a recognized national fraternal organization do not own or maintain a permanent post, lodge building, or hall, the department may issue a special permit to the organization for use at premises where the post or lodge regularly meet to conduct its meetings or community related events.

(4) Beer wholesalers and table wine distributors shall not:

(a) allow their employees to assist a special permittee or catering permittee in the sale of beer and/or table wine, except for setting up equipment for sale and service of beer or table wine; or

(b) sell beer and/or table wine to a special permittee or catering permittee on a consignment basis.

(5) A special permittee or catering permittee may use portable equipment furnished by a wholesaler in accordance with 16-3-241, MCA.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-241, 16-4-301, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 167, Eff. 2/15/85; AMD, 1985 MAR p. 1632, Eff. 11/1/85; AMD, 1987 MAR p. 1491, Eff. 10/1/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2010 MAR p. 2227, Eff. 9/24/10; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.324 Special Permits

(1) A special permit application must be completed and approved by the department when requesting the ability to sell beer and table wine to patrons attending a special event. The holder of a special permit must abide by all applicable laws governing the retail sale of beer and table wine for on-premises consumption.

(2) The length of time for which a special permit can be issued is determined by the fact that there is an outcome, conclusion, or result. For example, the winner of a baseball tournament or the end of a concert.

(3) A special permit issued to an association or corporation pursuant to 16-4-301(1)(c), MCA, is used for professional sporting contests or junior hockey contests during seasons of play only.

(4) Except as provided in 16-4-301(1)(e), MCA, an applicant for a special permit cannot have an ownership interest in a manufacturer, importer, bottler or distributor of alcoholic beverages or ownership in an agency liquor store.

(5) Any on-premises consumption retail licensee entitled to a catering endorsement will not be issued a special permit, except for veteran and fraternal licensees as provided for in 16-4-301, MCA.

(6) Only one permit is required for multiple locations where beer and table wine are sold within the enclosure where the event is held. All locations must be described on the permit application. A copy of the permit must be posted at each location.

(7) A special permit cannot be issued to a location where another permit or license is issued.

(8) Private parties where no money or other consideration is exchanged such as weddings or office parties are not required to obtain a special permit.

(9) The department may revoke a special permit if the permit holder fails to operate the sale of alcoholic beverages at the special events in compliance with the alcoholic beverage laws and rules.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-306, 16-4-301, MCA
History: NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-420, MCA
History: NEW, 1997 MAR p. 2097, Eff. 11/18/97; REP, 2018 MAR p. 1613, Eff. 8/11/18.

Subchapter 42.12.5 Competitive Bidding Process for Retail Alcoholic Beverage Licenses

Mont. Admin. R. 42.12.501 Definitions

The following definitions apply to this subchapter:

(1) "Bidder" means an individual or business entity.

(2) "Competitive bid form" means an electronic form provided by the department and submitted by a bidder, to enter a competitive bidding process.

(3) "Competitive bidding" means a process to select a bidder to submit an application for licensure.

(4) "Minimum bid amount" means the lowest acceptable bid amount. The minimum bid amount shall be set by the department at 75 percent of the market value of licenses of the same type and privileges that have sold within the quota area or similar quota area.

(5) "Pivotal straight line" means a line that is created from the center point of two overlapping incorporated cities' or incorporated towns' boundaries and extends outward in a manner that separates the two quota areas as close to equidistant as possible.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-201, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-430, MCA
History: NEW, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2019 MAR p. 2385, Eff. 12/28/19; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.502 Publishing of Alcoholic Beverage License Availability

(1) The department shall publish the availability of a retail alcoholic beverage license, that is subject to the quota limitations in 16-4-105, 16-4-201, or 16-4-420, MCA, when:

(a) a new license becomes available in a quota area in which a license of the same type is not currently available in the quota area;

(b) the opportunity to transfer a license into a quota area becomes available in which a license of the same type is not currently available in the quota area; and

(c) the lapse, revocation, or issuance of a license within the quota area in which the license is located has created the last remaining license for that license type in the quota area; and

(d) the department's denial of an application for licensure or the applicant's withdrawal of an application for licensure has created the last remaining license for that license type in the quota area.

(2) The department shall publish the availability of the license once a week for two consecutive weeks in a newspaper in the area. The publication notice shall include:

(a) the type of license(s) available;

(b) the reason for the availability;

(d) the minimum bid amount; and

(e) that the department will use a competitive bidding process for determining who is granted the opportunity to apply for licensure.

(3) Concurrent with the notice of publication in (2), the department will post the availability of a license on the department's website until the competitive bid deadline provided in ARM 42.12.503(2), and will send an electronic notification to any individuals who have signed up with the department to receive competitive bid notices.

(4) The department has the right to cancel or amend a competitive bidding process at any time. If a competitive bidding process is cancelled, the department shall notice the availability of the license, if applicable, in a future publication.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-201, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-430, MCA
History: NEW, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2019 MAR p. 2385, Eff. 12/28/19; AMD, 2021 MAR p. 1152, Eff. 9/11/21; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.503 Retail Alcoholic Beverage License Competitive Bid Forms

(1) Competitive bid forms must be submitted electronically to the department.

(2) The deadline to submit a bid is ten business days from the date of the last publication notice required in ARM 42.12.502(2).

(3) The department shall notify the highest bidder, in writing, if any deficiencies exist on the highest bidder's bid form. The highest bidder shall have the opportunity to correct any deficiencies by submitting a revised bid form within five business days of being notified.

(4) A bidder will be disqualified from the competitive bidding process if:

(a) the competitive bid form is not received on or before the deadline;

(b) any individual listed as an owner, partner, member, officer, or director is younger than 19 years of age at the time of the competitive bid closing; or

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-201, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-204, 16-4-401, 16-4-420, 16-4-430, MCA
History: NEW, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2019 MAR p. 2385, Eff. 12/28/19; AMD, 2021 MAR p. 1152, Eff. 9/11/21; AMD, 2022 MAR p. 288, Eff. 2/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.504 Determination of Successful Competitive Bidder and Submission of Completed Application

(1) The department shall rank all qualified bidders by bid amount.

(2) In the event a bidder places multiple bids, the department shall accept the highest bid placed by the bidder.

(3) In the event of the highest bid resulting in a tie, the department shall notify those bidders to request the bidders to submit a new bid.

(4) The department shall notify the highest (i.e., successful) bidder in writing. The department shall also notify all other bidders that the successful bidder was notified.

(5) The successful bidder shall have 60 days to submit the application for licensure from the day the notification was received. Up to 60 additional days may be granted to the successful bidder upon the department receiving and approving a written request by the successful bidder that explains the need for additional time. If the successful bidder does not submit a completed application for licensure within the allotted time, the successful bidder will be disqualified. Once the successful bidder submits its license application to the department, the bidder becomes the applicant for all purposes relative to the requirements and qualifications for licensure.

(6) All applications for licensure must be made in the name of the individual successful bidder of the competitive bid, or a business entity that is wholly owned by the successful bidder. For example, John Doe is the successful bidder of a license in a competitive bid process, so the applicant for the issuance of the license may either be John Doe, individually, or a corporation or limited liability company in which John Doe maintains the only ownership interest.

(7) License applications that do not comply with (6) will be disqualified and the department will proceed as provided in (10).

(8) The applicant must meet all other licensing and premises suitability requirements in order for a license to be issued by the department. Once the application has been approved by the department, the applicant becomes a licensee.

(9) Failure to pay the bid amount by the time the department is ready to approve the license will result in disqualification and the application for licensure will be denied.

(10) If the application for licensure is not approved or the license is forfeited pursuant to 16-4-430(7), MCA, the next highest bidder will be notified in writing. The next highest bidder shall comply with the requirements of (5) through (9) and 16-4-430(4), MCA.

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-201, 16-4-204, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-204, 16-4-420, 16-4-430, MCA
History: NEW, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2019 MAR p. 2385, Eff. 12/28/19; AMD, 2021 MAR p. 1152, Eff. 9/11/21; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.12.505 Determination of Boundaries for the Location of Premises

(1) The department shall separate two or more incorporated cities or incorporated towns, pursuant to 16-4-105, 16-4-201, and 16-4-420, MCA, by using a pivotal straight line.

(2) The department shall make available maps of any incorporated cities or incorporated towns that were previously part of a combined quota area whose boundaries were separated pursuant to (1).

(3) Except as provided in 16-4-105, 16-4-201, and 16-4-420, MCA, under no circumstance may a license, restricted by the quota limitations in 16-4-105, 16-4-201, or 16-4-420, MCA, be located farther than:

(a) the county boundary within which the incorporated city or incorporated town is located; or

(b) the line that separates the incorporated city or incorporated town's boundary from another incorporated city or incorporated town as specified in (1).

History

Authorizing statute(s): 16-1-303, 16-4-105, 16-4-201, 16-4-420, MCA
Implementing statute(s): 16-4-105, 16-4-201, 16-4-420, 16-4-430, MCA
History: NEW, 2018 MAR p. 1613, Eff. 8/11/18; AMD, 2019 MAR p. 2385, Eff. 12/28/19.

Chapter 42.13 Regulation of Licensees

Subchapter 42.13.1 General Regulations

Mont. Admin. R. 42.13.101 Compliance with Laws and Rules

(1) All licensees, their agents, employees, and concessionaires must operate in compliance with the rules of other state and local agencies and abide by all:

(a) provisions of the laws of Montana and the United States related to alcoholic beverages;

(b) county and city or town ordinances related to alcoholic beverages;

(c) Indian alcoholic beverage laws applicable within the areas of Indian country, as defined by 18 USC 1151, provided a tribe having jurisdiction over such area of Indian country adopted an ordinance, certified by the Secretary of the Interior, and published in the Federal Register; and

(d) rules of the department relating to alcoholic beverages.

(2) Proof of violation by a licensee, a concessionaire, or the licensee's or concessionaire's agent or employee of any of the provisions of the above laws, ordinances, or rules is sufficient grounds for revocation or suspension of the license or termination of a concession agreement, and a licensee, a concessionaire, or both, may be reprimanded or assessed a civil penalty in accordance with 16-4-406, MCA.

(3) The department may use a range of progressive and proportional penalties for any combination of violations of any laws, ordinances, and rules. The progressive penalty schedule is not an exhaustive list of the grounds for administrative action. The schedule does not preclude the department's use of discretion to propose a penalty greater or less than those listed based upon aggravating or mitigating circumstances, non-exhaustive examples of which are described in (4) and (5). For purposes of determining penalties under the progressive penalty schedule, the department uses a three-year lookback. Proposed penalties are assessed based upon the date the violation occurs. For violations that occur over time, such as an undisclosed ownership interest, the violation date shall be the date the department issues its notice of proposed department action. The department may proceed to revoke or refuse to grant the renewal of a license, concession agreement, or both, only if a violation jeopardizes health, welfare, safety, or there is not a cure in place.

Progressive Penalty Schedule

Violation | Penalty 1st Violation | Up to a $250 monetary penalty 2nd Violation | Up to a $600 monetary penalty 3rd Violation | Up to a $1,000 monetary penalty, up to a 2-day suspension, or both 4th Violation | Up to a $1,500 monetary penalty, up to a 5-day suspension, or both 5th Violation | Up to a $1,500 monetary penalty, up to a 7-day suspension, or both Subsequent Violations | In accordance with 16-4-406, MCA

(4) Aggravating circumstances may result in the imposition of maximum monetary penalties, maximum suspension time or revocation, and will not bind the department to the progressive penalty schedule. Aggravating circumstances include, but are not limited to:

(a) no effort on the part of a licensee, a concessionaire, or both, to prevent a violation from occurring;

(b) a licensee's failure to report a violation at the time of renewal;

(d) recurring sales to underage or intoxicated persons;

(e) providing alcoholic beverages to a person under 18 years of age;

(f) lack of cooperation by a licensee, a location manager, a concessionaire, or a combination thereof, in an investigation;

(g) a violation's significant negative effect on the health, welfare, and safety of the community in which the licensee, the concessionaire, or both, operate; and

(h) those instances provided in 16-4-406, MCA.

(5) Mitigating circumstances may result in the adjustment of monetary penalties, amount of suspension time, or revocation, and will not bind the department to the progressive penalty schedule. Mitigating circumstances include, but are not limited to:

(a) the admissions of either the licensee, a location manager, or concessionaire regarding violations of the code or a rule of the department prior to the department commencing investigation of the licensee or concessionaire; and

(b) those instances provided in 16-4-406, MCA.

(6) Nothing in this rule prevents the department from revoking, suspending, or refusing the renewal of a license, or a concession agreement, or both, if revocation, suspension, or refusing renewal is expressly allowed in law or rule with reference to a prohibited act.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-302, 16-3-301, 16-4-406, 16-6-314, MCA
History: NEW, Eff. 11/3/75; AMD, 1980 MAR p. 2199, Eff. 7/18/80; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 1998 MAR p. 2088, Eff. 7/31/98; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2012 MAR p. 122, Eff. 1/13/12; AMD, 2012 MAR p. 1150, Eff. 6/8/12; AMD, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 346, Eff. 3/25/17; AMD, 2020 MAR p. 1283, Eff. 6/27/20; AMD, 2022 MAR p. 1707, Eff. 8/27/22.

Mont. Admin. R. 42.13.102 Retention of Records

(1) All records may be inspected by the department in accordance with the provisions of ARM 42.2.305.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-303, MCA
History: NEW, 11/3/75; AMD, 2001 MAR p. 449, Eff. 3/23/01.

Mont. Admin. R. 42.13.103 Department Examinations

(1) The department or its duly authorized representative has the right at any time to make an examination of any premises licensed for the sale of alcoholic beverages and to check the books, records, and stock-in-trade, and to make an inventory of the latter. The department or its authorized representative may immediately seize and remove any alcoholic beverage kept in violation of law.

(2) Any authorized representative designated in (3) shall have immediate access to all parts of the licensed premises. Except as provided in 16-6-103, MCA, doors of licensed premises shall not be locked while persons other than the licensee or the licensee's employees are within or upon the licensed premises.

(3) The department designates as its authorized representative, for the purpose of carrying out 16-6-103, MCA, any member of a county sheriff's department or the police force of a city or town, provided the police force is organized pursuant to Title 7, chapter 32, part 41, MCA (metropolitan police law).

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-6-103, MCA
History: NEW, Eff. 11/3/75; NEW, Eff. 5/5/77; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2019 MAR p. 2257, Eff. 12/7/19.

Mont. Admin. R. 42.13.104 Posting of Licenses

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-4-104 and 16-4-204, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 170, Eff. 2/15/85; REP, 1992 MAR p. 1244, Eff. 6/12/92.

Mont. Admin. R. 42.13.105 Applicability of Licenses; Premises Defined; Golf Course Exception; Portable Satellite Vehicle; Movable Devices

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-302, 16-3-311, 16-4-109, 16-4-404, 16-6-104, MCA
History: NEW, Eff. 11/3/75; AMD, 1987 MAR p. 1213, Eff. 7/31/87; AMD, 1996 MAR p. 3146, Eff. 12/6/96; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2004 MAR p. 1972, Eff. 8/20/04; REP, 2014 MAR p. 2980, Eff. 12/12/14.

Mont. Admin. R. 42.13.106 Alteration of Premises

(1) Any alteration to licensed premises, other than a cosmetic change, must be approved by the department.

(a) An alteration that increases the premises' square footage must receive preapproval.

(b) An alteration that does not increase the premises' square footage must be submitted within seven days from its commencement.

(2) A licensee must submit a request to alter the premises and provide copies of the current and proposed floor plans meeting the requirements of ARM 42.12.101.

(3) Upon receipt of the items in (2), the department will notify the licensee within seven business days of the approval or denial of the alteration request.

(4) The department's approval of an alteration request shall be valid for one year. An alteration not completed within one year must be resubmitted to the department for another approval.

(5) If the alteration prevents the licensee from continuing operations, the licensee shall request nonuse status pursuant to ARM 42.13.107.

(6) The licensee is responsible for ensuring the department receives notification of building, health, and fire code approval for the premises unless the licensee attests that no building permit was required.

(7) The department will arrange for an inspection of the premises upon either completion of the alterations or upon receipt of the building, health, and fire code approvals or licensee attestation described in (6).

(8) The department will review the Department of Justice's findings and, upon determining no issues are present, the department shall notify the licensee that the alteration is approved, and any new addition is now part of the licensed premises. Prior to receiving this written approval, a licensee shall not operate in any area that has not been previously approved.

(9) Any alteration to licensed premises, other than a cosmetic change, without approval shall constitute a violation and may subject the licensee to administrative action.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-302, 16-3-311, 16-4-402, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.107 Nonuse Status

(1) The department shall grant nonuse status to a licensee who:

(a) is issued a license without an approved premises as provided in 16-4-417, MCA; or

(b) is not operating a going establishment if the licensee provides written notice to the department prior to exceeding 90 days of not operating a going establishment.

(2) Except as provided in (3) or in 16-4-431(2), MCA, an approved nonuse period shall not exceed one year.

(3) The department may extend the one-year nonuse period if the licensee provides evidence that the delay in use is for reasons outside the licensee's control, that the licensee is progressing on a department-approved alteration, or for licenses issued without a premises, the licensee is making progress toward licensure. Acceptable reasons for extending the nonuse period may include but are not limited to:

(a) the death of the licensee or the licensee's family member;

(b) a natural disaster;

(d) the licensee lost possessory interest in the premises; or

(e) bankruptcy.

(4) Prior to expiration of the approved nonuse period, the licensee shall resume operations and notify the department that operations have resumed.

(5) If a licensee fails to timely resume operations or provide the required notification, the department shall lapse the license pursuant to 16-3-310, MCA, and ARM 42.13.108.

(6) A licensee cannot resume operations of a license at premises where the licensee:

(a) was granted nonuse status for the license; and

(b) operated another license at the premises while the previous license was on nonuse status.

(7) A licensee may not purchase, sell, or otherwise provide alcoholic beverages while on nonuse status. This includes catering events and operating through a concession agreement.

(8) The amount of time spent on nonuse status does not count towards the operational requirement provided in 16-4-417 and 16-4-432, MCA.

(9) A license issued pursuant to 16-4-101, 16-4-107, and 16-4-311, MCA, may be granted nonuse status if the licensee submits a written request to the department prior to exceeding 90 days of not operating.

(10) A licensee granted nonuse status pursuant to (9) may not produce, purchase, sell, distribute, or otherwise provide alcoholic beverages while on nonuse status.

History

Authorizing statute(s): 16-1-303, 16-4-417, 16-4-431, MCA
Implementing statute(s): 16-3-310, 16-4-417, 16-4-431, 16-4-432, MCA
History: NEW, Eff. 11/3/75; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 1992 MAR p. 1244, Eff. 6/12/92; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2008 MAR p. 2183, Eff. 10/10/08; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2020 MAR p. 1177, Eff. 6/27/20; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.108 Lapse of License for Nonuse

(1) A retail licensee shall operate the business as a going establishment unless the license has been approved for seasonal use pursuant to ARM 42.13.112 or approved for nonuse pursuant to ARM 42.13.107.

(2) The department shall lapse a license based upon a licensee's failure to operate a going establishment for a period exceeding 90 consecutive days unless the license is approved for seasonal use or is granted nonuse status.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-310, MCA
History: NEW, 1992 MAR p. 2192, Eff. 9/25/92; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2014 MAR p. 2980, Eff. 12/12/14.

Mont. Admin. R. 42.13.109 Seven-Day Credit Limitation

(1) A brewer, beer importer, beer wholesaler, winery, or table wine distributor is subject to a penalty under 16-4-406, MCA, if credible evidence demonstrates that they extended credit to a retail licensee for more than seven days or sold and delivered beer to a retailer who has unpaid deliveries that exceed seven days.

(2) A retail licensee is subject to a penalty under 16-4-406, MCA, if credible evidence demonstrates that the retail licensee accepted credit extended by a brewer, beer importer, beer wholesaler, winery, or table wine distributor for more than seven days for the purchase of beer or table wine or failed to pay a brewer, beer importer, beer wholesaler, winery, or table wine distributor within seven days from the date the beer or table wine was delivered.

(3) The first day of the seven-day credit period begins at 8:00 a.m. on the day after the delivery.

(4) Criteria which demonstrates credit has been extended are:

(a) wholesaler delivered product to retailer;

(b) retailer or wholesaler does not have documentation of payment;

(d) wholesaler does not have documentation of efforts to collect payment; or

(e) (a), (b), (c), and the wholesaler has no documentation to show further product delivery was terminated.

(5) Criteria which demonstrates credit has been accepted are:

(a) wholesaler delivered product to retailer;

(b) retailer or wholesaler does not have documentation of payment;

(d) product has not been returned by retailer.

(6) When a license is sold and a debt to a beer and wine wholesaler remains unpaid, the debt becomes the obligation of the new owner of the license. Based on the seven-day credit limitation, the wholesaler may not sell to the new licensee until the previous debt is paid in full.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-243, 16-3-406, 16-4-404, MCA
History: NEW, 1993 MAR p. 158, Eff. 1/29/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2008 MAR p. 2183, Eff. 10/10/08; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.110 Closing Hours Due to Change to or from Daylight Savings Time

(1) Hours of operation change twice yearly due to daylight savings time. The change in time will occur at 2:00 a.m., therefore:

(a) in the fall the establishment must close at 2:00 a.m. and then set the clock back to 1:00 a.m.; and

(b) in the spring the establishment must close at 2:00 a.m. and then set the clock forward to 3:00 a.m.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-304, MCA
History: NEW, 1993 MAR p. 158, Eff. 1/29/93.

Mont. Admin. R. 42.13.111 Definitions

The following definitions apply to this chapter:

(1) "Alteration" means a structural change or a modification to the premises other than a cosmetic change. Examples include adding a patio or removing a half wall.

(2) "Building" means an enclosed structure with external walls and a roof. Separate structures or structures connected by skyways are not considered one building for licensing purposes.

(3) "Contiguous" means touching or sharing a common border.

(4) "Contract packaging" means blending, bottling, packing, and/or filling of a distilled spirits product by a domestic distilled spirits plant for another distilled spirits plant.

(5) "Cosmetic change" means a nonstructural change to the premises. Examples include painting, carpeting, and other interior decorating.

(6) "Coupons" are certificates or tickets entitling the holder to a specified right, as redemption for cash or gifts or reduced purchase price.

(7) "Distilled at the microdistillery" means the process of vaporization and subsequent condensation of a beverage containing ethyl alcohol that occurs at the licensed premises.

(8) "Distilled spirits" means alcoholic beverages that contain ethyl alcohol and generally are the result of distillation of fermented materials. Examples include whiskey, gin, vodka, cordials, liqueurs, and flavored brandies. Distilled spirits do not include alcoholic beverages that are defined as beer or wine by the Montana Alcoholic Beverage Code.

(9) "Distilled spirits plant" means a plant at which distilled spirits are manufactured, produced, aged, stored, packaged, or bottled.

(10) "Drink preparation area" means the bar area on the premises where alcoholic beverages are stored and prepared for on-premises consumption and from which alcoholic beverages may be sold for off-premises consumption.

(11) "Flavors and nonbeverage ingredients containing alcohol" means any intermediate product containing alcohol that is used in the production of beer.

(12) "Floor plan" means a diagram with measurements of the premises as seen from above.

(13) "Fortified wine" means wine that contains more than 16 percent, but not more than 24 percent, of alcohol by volume. Fortified wine constitutes liquor for distribution purposes.

(14) "Going establishment" means a business that:

(a) is open at least 20 hours per week for any four weeks in a 90-day period;

(b) maintains an inventory of at least ten cases of alcoholic beverages for each day that the establishment is open; and

(15) "Grocery store" means a self-service retail establishment where a variety of perishable and nonperishable food items and household goods are sold for use off the premises.

(16) "Industry member" is any person engaged in business as a manufacturer, importer, or wholesaler of alcoholic beverages.

(17) "Mitigating circumstances" means a justification for a violation that the department considers extenuating enough to warrant a reduction of the penalty that would otherwise be proposed.

(18) "Original packaging" means the sealed container in which a manufacturer packages its product for retail sale. It includes bottles, cans, kegs, and growlers, but does not include lines or piping carrying product from a manufacturer's premises to a retailer's premises.

(19) "Patio/deck" means an outdoor portion of the premises where the preparation, service, and consumption of alcoholic beverages is allowed.

(20) "Perimeter barrier" means a barrier enclosing the perimeter of the patio/deck. The barrier shall be constructed in a manner that impedes foot traffic and clearly defines the boundary of the exterior portion of the premises. The barrier shall be at least three feet high at all points and may have a single entrance permitting public access from an unlicensed area to the patio/deck. Upon the department's determination that the barrier accomplishes its intended purpose, the barrier may:

(a) be constructed of materials such as lattice or wrought iron that do not form a solid structure;

(b) have a portion of it be water;

(d) be less than three feet in height.

(21) "Portable satellite vehicle" or "other movable satellite device" as used in 16-3-302, MCA, may include:

(a) self-propelled wheeled vehicles such as golf carts, concession vans, or similar conveyances containing beverage dispensing and storage equipment; or

(b) wheeled devices such as concession wagons or vendors carts and other similar vehicles which may be towed, pushed, or transported to a temporary site and which contains beverage dispensing and storage equipment; and

(c) fixed booths or stands in which portable beverage dispensing and storage equipment may be temporarily installed and removed after use.

(22) "Posted price" as it applies to liquor and fortified wine, means the wholesale price of liquor and fortified wine for sale to persons who hold liquor licenses as fixed and determined by the department.

(23) "Premises" means the area in the floor plan approved by the department on which the activities authorized under the license may be conducted.

(24) "Primary packaging" means the container that directly holds the alcoholic beverage. Examples of primary packaging include, but are not limited to, aluminum cans, glass bottles, kegs, and a box containing a plastic bladder or other soft flexible container of wine.

(25) "Purchase price" means the ordinary, dine-in menu price for beer and wine and food items.

(26) "Sale to an underage person" means a violation consisting of the unlawful sale, service, or delivery of an alcoholic beverage to a person under the age of 21.

(27) "Sample room" means the area of a manufacturer's premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted.

(28) "Seasonal business" means a business closed for greater than 90 consecutive days due to climatic and other conditions.

(29) “Self-pour device” means the same as an electronic or other technology-based device used to measure and supply customers with a predetermined volume of beer or wine, as described in 16-3-311(1)(a)(ii), MCA.

(30) "Self-service of alcoholic beverages" means allowing persons other than the licensee or its employees to have access to alcoholic beverages prior to the licensee or its employees providing the alcoholic beverage to the person for on-premises consumption. The term does not include beer or wine that was provided in a pitcher, bucket, or bottle, and beer or wine dispensed through a self-pour device.

(31) "Service area" means the area on the premises where the service, sale, and on-premises consumption of alcoholic beverages are permitted. The service area includes any patio/deck and drink preparation area.

(32) "Service bar" means an area on a restaurant beer and wine licensee's premises where alcoholic beverages are stored and prepared for on-premises consumption.

(33) "Stand-alone beer and/or table wine business" means a business in which 95 percent of the business's annual gross income comes from the sale of beer, table wine, or both.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-302, 16-3-311, MCA
History: NEW, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2007 MAR p. 512, Eff. 4/13/07; AMD, 2010 MAR p. 757, Eff. 3/26/10; AMD, 2012 MAR p. 122, Eff. 1/13/12; AMD, 2012 MAR p. 1150, Eff. 6/8/12; AMD, 2012 MAR p. 2646, Eff. 12/21/12; AMD, 2014 MAR p. 979, Eff. 5/9/14; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2019 MAR p. 2058, Eff. 11/9/19; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.13.112 Seasonal Business

(1) The department may approve a license for use in a seasonal business to enable closures exceeding 90 consecutive days.

(2) To request approval, the licensee shall submit a written request that includes the:

(a) type of seasonal business;

(b) justification for operating seasonally; and

(3) Once approved, a licensee shall notify the department prior to changing the general dates of operation.

(4) The time spent on seasonal status does not count towards the operational requirement provided in 16-4-417 and 16-4-432, MCA, when the business is closed.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-310, 16-4-417, 16-4-432, MCA
History: NEW, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Subchapter 42.13.2 Labeling and Advertising

Mont. Admin. R. 42.13.201 Labeling and Packaging Requirements

(1) As a condition of holding a retail license, no retail licensee shall sell, offer for sale, or provide any beer, wine, or hard cider unless the label and primary packaging are in conformity with this rule and ARM 42.13.221.

(2) Alcoholic beverage products are a mature product category, restricted by law to only consumers age 21 and older and who are not intoxicated, and therefore should be marketed in a responsible and appropriate manner. The department, in its discretion and on a case-by-case basis, will not approve a beer, wine, or hard cider label or primary package that:

(i) aerosol cans; or

(ii) hollow candies;

(b) uses flavors that are designed to target or particularly appeal to underage persons, such as:

(i) cotton candy; or

(ii) bubble gum; or

(i) are designed to target or particularly appeal to underage persons;

(ii) minimizes, fails to identify, or disguises that the product contains alcohol; or

(iii) alludes to or suggests irresponsible, excessive, or underage consumption; or

(d) is in powdered or crystalline form.

(3) The department will notify the winery, wine importer, brewer, or beer importer of any products that do not conform to the requirements in (2). The winery, wine importer, brewer, or beer importer must remove the product from the Montana market within 60 days of being notified by the department.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-101, 16-1-102, 16-1-106, 16-1-303, MCA
History: NEW, Eff. 11/3/75; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2010 MAR p. 757, Eff. 3/26/10; AMD, 2012 MAR p. 2646, Eff. 12/21/12; AMD, 2019 MAR p. 2058, Eff. 11/9/19; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.202 Draught Beer and Wine Taps

(1) All taps or other devices used in the withdrawal of draught beer or wine from kegs for consumption on the premises of any retail licensee shall bear a prominent, easily readable label identifying the brand of beer or wine being served.

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-1-303, MCA
History: NEW, Eff. 11/3/75.

Mont. Admin. R. 42.13.203 Beer Label Approvals

(1) All beer or malt beverage products that a brewer or beer importer desires to sell in the state of Montana must be approved by the department and conform to ARM 42.13.201 prior to the product entering the Montana market. In order to consider the product for approval, the department must receive copies of:

(a) the primary packaging, unless a traditional container is used. Traditional containers include aluminum cans, glass bottles, kegs, and boxes that are typically associated with alcoholic beverages; and

(b) the Certificate of Label Approval for products that are regulated by the Alcohol and Tobacco Tax and Trade Bureau (TTB); or

(2) Any changes to the product packaging or labels described in (1)(a) through (c) require department approval prior to the product entering the Montana market.

(3) A brewer of malted beverages who has an annual nationwide production of less than 10,000 barrels is exempt from the requirements in (1)(a) through (c).

(4) Beer containing more than 8.75 percent but not more than 14 percent alcohol by volume must:

(a) meet the definition of beer provided in 16-1-106(5), MCA;

(b) be approved by the department prior to being sold or distributed within the state; and

(5) In addition to the requirements in (1)(a) through (c), for beer or formula changes that meet the criteria in (4), the following documents are also required:

(a) The brewer or beer importer must file a form, supplied by the department, attesting that the formula meets the requirements in (4).

(b) If the brewer or beer importer is required by federal law or regulations to file its formula with TTB, the brewer or beer importer is also required to send a copy of the formula filed with the TTB to the department.

(c) At the department's request and sole discretion, brewers or beer importers must file a formula for verification of its compliance with Montana statutes.

(d) All formulas filed with the department are protected by the privacy act and will not be released by the department unless otherwise required by law or by court order.

(6) The department will process the request and provide approval or denial in writing within 30 days of receipt of all required information.

(7) Each brewer actively involved in a distinct beer collaboration pursuant to 16-3-213(4), MCA, must file for a beer label approval if the collaboration beer meets the criteria provided in (4).

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-102, 16-1-106, 16-1-302, 16-4-105, MCA
History: NEW, 2010 MAR p. 757, Eff. 3/26/10; AMD, 2012 MAR p. 2646, Eff. 12/21/12; AMD, 2025 MAR, Notice No. 2025-249, Eff. 10/25/25.

Mont. Admin. R. 42.13.204 Wine Label Approvals

(1) Each product a winery or wine importer desires to sell in the state of Montana must be approved by the department and conform to the provisions of ARM 42.13.201.

(2) In order to consider the product for approval, the department must receive copies of:

(a) a picture of the primary packaging unless a traditional container is used. Traditional containers include aluminum cans, glass bottles, kegs, and boxes that are typically associated with alcoholic beverages. Any changes to the primary packaging must be approved by the department prior to entering the Montana market if a nontraditional container is used; and

(b) the Certificate of Label Approval from the Alcohol and Tobacco Tax and Trade Bureau for wine over 7 percent alcohol by volume. Any changes to the label that require approval from the Alcohol and Tobacco Tax and Trade Bureau must be approved by the department prior to entering the Montana market; or

(c) the label, if the wine is less than 7 percent alcohol by volume. Any changes to the label must be approved by the department prior to entering the Montana market.

(3) The department will process the request and provide approval or denial to the winery or wine importer in writing within 30 days of receipt of all required information.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-101, 16-1-102, 16-1-106, 16-1-303, 16-4-107, MCA
History: NEW, 2012 MAR p. 2646, Eff. 12/21/12.

Mont. Admin. R. 42.13.210 Consumer Promotions

(1) Industry members authorized to do business in the state are allowed to offer coupons and direct offerings as set forth in regulation number 6.96 of the Tobacco Tax and Trade Bureau (TTB), United States Department of the Treasury as set forth in 27 CFR, as revised on April 1, 2005, and incorporated by reference as fully set forth as the regulations for consumer promotions. Copies may be obtained at the United States web site located at ttb.gov/other/regulations.shtml.

(2) Industry members may furnish to consumers coupons which are redeemable at a retail establishment as follows:

(a) all retailers within the market where the coupon offer is made may redeem such coupons; and

(b) an industry member does not reimburse a retailer for more than the face value of all coupons redeemed, plus a normal and customary handling fee for the redemption of coupons.

(3) Contest prizes, sweepstakes, refunds, premium offers, internet promotions, and like items may be offered by industry members directly to consumers. Officers, employees, and representatives of wholesalers or retailers are excluded from participation in these direct offerings.

(4) Conditions that must be met for all types of promotions include but are not limited to:

(a) the company offering the promotion must be a registered industry member authorized to do business in the state of Montana;

(b) alcohol may not be awarded as a prize or given away to participants;

(d) no purchase is necessary to participate in a sweepstakes or contest.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-303, MCA
History: NEW, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2017 MAR p. 346, Eff. 3/25/17.

Mont. Admin. R. 42.13.211 Permissible Advertising

(1) No licensee shall publish or cause to be published or disseminate or cause to be disseminated any advertisement of alcoholic beverages unless such advertisement conforms with ARM 42.13.221.

(2) For the purpose of this rule, "advertising" means the publication, dissemination, solicitation, or circulation of visual, oral, or written communication intended for the public.

(3) The prohibited acts in this rule shall constitute a violation and may subject the licensee to administrative action.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-103, 16-3-244, MCA
History: NEW, Eff. 11/3/75; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.212 Advertising Media

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-241 and 16-3-244, MCA
History: NEW, Eff. 11/3/75; REP, 1998 MAR p. 2088, Eff. 7/31/98.

Mont. Admin. R. 42.13.221 Adoption of Certain Federal Regulations

(1) The United States Department of Treasury, Alcohol and Tobacco Tax and Trade Bureau regulations 1, 4, 5, 6, and 7, as set forth in 27 CFR, as revised April 1, 2006, available from the U.S. Government Printing Office, Washington, DC 20402-0001, are adopted by reference. These regulations apply to basic permit requirements, tied-house restrictions, labeling, sampling, and advertising of liquor (distilled spirits, wine, and malt beverages) sold within this state except where the provisions of these federal regulations may be contrary to or inconsistent with the provisions of Montana law or rules of the department.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-201, 16-3-103, 16-3-244, MCA
History: NEW, Eff. 11/3/75; AMD, 1996 MAR p. 3146, Eff. 12/6/96; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2004 MAR p. 1972, Eff. 8/20/04; AMD, 2007 MAR p. 483, Eff. 4/13/07.

Mont. Admin. R. 42.13.222 Beer Wholesaler and Table Wine Distributor Recordkeeping Requirements

(1) Beer wholesalers and table wine distributors shall keep and maintain records at their place of business of all beer or table wine furnished or sold to retailers. These records must contain the following information:

(a) name and address of retailer;

(b) item that was sold or furnished;

(d) date item was delivered;

(e) cost of item sold;

(f) date wholesaler or distributor received retailer's payment; and

(g) from which warehouse or subwarehouse the item was delivered.

(2) Commercial records or invoices may be used if they contain the information listed in (1)(a) through (g).

(3) Beer wholesalers shall keep and maintain records at their place of business of visits to retailers within their assigned territory, as specified under Title 16, MCA, for department inspection.

(4) A beer wholesaler or a table wine distributor may use a common carrier to deliver beer or wine to a retail license in limited quantities. The department may inspect the books and records of the common carrier regarding the conveyance of alcoholic beverages within the state.

(a) Quantity is limited to three cases a day for each licensed retailer.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-106, 16-3-220, 16-3-243, 16-3-404, 16-3-406, 16-3-411, MCA
History: NEW, 1985 MAR p. 170, Eff. 2/15/85; AMD, 1987 MAR p. 1213, Eff. 7/31/87; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2008 MAR p. 2183, Eff. 10/10/08.

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-201, MCA
History: NEW, 2000 MAR p. 1762, Eff. 7/14/00; AMD, 2002 MAR p. 2337, Eff. 8/30/02; REP, 2017 MAR p. 493, Eff. 4/29/17.

Subchapter 42.13.4 Wine

Mont. Admin. R. 42.13.401 Importation of Wine

(1) A foreign winery or importer, not otherwise licensed in Montana, desiring to ship table wine, sacramental wine, or hard cider to Montana must submit an application for registration specified in 16-4-107, MCA. The registration must be renewed annually by October 1 and be accompanied by the applicable registration fee shown in (3).

(2) Each product the foreign winery or importer desires to ship must conform to the provisions of ARM 42.13.201.

(3) For the first year, the registration fee is based on the total number of 9-liter cases the registrant intends to ship to Montana that year. For subsequent years, the registration fee is based on the total number of 9-liter cases the registrant actually shipped to Montana during the preceding year. The registration fee schedule is as follows:

(a) 0-60 9-liter cases = no charge;

(b) 61-500 9-liter cases = $100;

(d) 1001- 2000 9-liter cases = $300; or

(e) 2001 + 9-liter cases = $400.

(4) A winery that desires to ship table wine directly to consumers in Montana must also hold a current direct shipment endorsement, as specified in 16-4-1102, MCA. The direct shipment endorsement has an annual fee of $50.

(5) A winery must comply with all laws of the United States, Montana, Tribes, and local jurisdictions pertaining to the sale and shipment of alcoholic beverages, and may not ship table wine to any address in Montana where local or Tribal law prohibits the purchase or receipt of alcoholic beverages.

(6) Any winery or importer failing to renew or failing to file copies of its agreements of distributorship pursuant to 16-3-402, MCA, will be subject to cancellation or suspension as provided in 16-4-107, MCA.

History

Authorizing statute(s): 16-1-303, 16-4-1103, MCA
Implementing statute(s): 16-3-402, 16-4-107, 16-4-1102, 16-4-1103, MCA
History: NEW, Eff. 11/3/75; AMD, 1979 MAR p. 1249, Eff. 10/12/79; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 1993 MAR p. 158, Eff. 1/29/93; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2012 MAR p. 2646, Eff. 12/21/12; AMD, 2013 MAR p. 2312, Eff. 12/13/13; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD, 2019 MAR p. 2058, Eff. 11/9/19.

Mont. Admin. R. 42.13.402 Table Wine and Hard Cider Tax Return

(1) Each winery and table wine distributor shall pay any tax due and file a quarterly tax return on Form WIT, pursuant to 16-1-411 and 16-3-411, MCA. The form must be filed regardless of whether the winery or table wine distributor sold any table wine or hard cider during the quarter.

(2) Each winery and table wine distributor must file the return and pay tax on or before the 15th day of the month following the end of the quarter for table wine and hard cider sold in the previous quarter.

(3) Failure to file the return or pay the table wine tax and hard cider tax is sufficient cause for the assessment of penalties and interest in accordance with 15-1-216 and 16-1-411, MCA, and other penalties provided in 16-4-406, MCA.

(4) Sections (1) through (3) do not apply to a winery or wine importer that sells its products solely to table wine distributors.

(5) For purposes of this tax, a tax year begins on July 1, and a "quarter" means a tax reporting period which begins July 1, October 1, January 1, and April 1 of each tax year.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 15-1-216, 16-1-411, 16-3-404, 16-3-411, 16-4-406, MCA
History: NEW, 1980 MAR p. 433, Eff. 2/1/80; AMD, 1985 MAR p. 170, Eff. 2/15/85; AMD, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2010 MAR p. 757, Eff. 3/26/10; AMD, 2013 MAR p. 2312, Eff. 12/13/13; AMD, 2024 MAR p. 759, Eff. 4/13/24.

Mont. Admin. R. 42.13.403 Domestic Winery

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-411 and 16-4-107, MCA
History: NEW, 2001 MAR p. 449, Eff. 3/23/01; REP, 2003 MAR p. 21, Eff. 1/17/03.

Mont. Admin. R. 42.13.404 Wine Reporting Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-411, 16-3-411, 16-4-107, 16-4-1101, 16-4-1102, 16-4-1103, MCA
History: NEW, 2008 MAR p. 2183, Eff. 10/10/08; AMD, 2010 MAR p. 757, Eff. 3/26/10; AMD, 2013 MAR p. 2312, Eff. 12/13/13; REP, 2019 MAR p. 2058, Eff. 11/9/19.

Mont. Admin. R. 42.13.405 Winery - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, a winery shall:

(a) refrain from providing alcoholic beverages on the premises until the department approves a sample room;

(b) except as provided in 16-4-401(9), MCA, not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business;

(d) store on the premises only the alcoholic beverages for which the premises are licensed or those authorized under an approved alternating proprietor arrangement;

(e) except as provided in 16-3-316(4)(a), MCA, sell and deliver its products to distributors or retailers only in original packaging;

(f) prevent the self-service of alcoholic beverages on the premises;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(h) prevent the sale of alcoholic beverages for on-premises or off-premises consumption between 2 a.m. and 8 a.m.;

(i) prevent the consumption or possession of alcoholic beverages on the premises between 2 a.m. and 8 a.m. by removing all alcoholic beverages, other than those sold for off-premises consumption pursuant to (3), from individuals' possession by 2 a.m.;

(j) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold in original packaging for off-premises consumption;

(k) prevent the consumption of alcoholic beverages in the manufacturing area or storage area except as authorized by federal laws;

(l) maintain records documenting its business operations including, but not limited to the sale, production, storage, and processing of alcoholic beverages on the premises; and

(m) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law.

(2) A license to operate a winery is not a retail license.

(3) A winery may sell alcoholic beverages on its premises to a consumer for off-premises consumption under the following conditions:

(a) all alcoholic beverages must be in original packaging, prepared servings, or growlers;

(b) except as provided in (c), alcoholic beverages may only be sold in an approved sample room; and

(c) use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online, in person, or through the phone.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-3-304, 16-3-305, 16-3-312, 16-3-406, 16-3-411, 16-4-107, MCA
History: NEW, 2010 MAR p. 757, Eff. 3/26/10; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.406 Sacramental Wine Reporting Requirements

(1) The following licensed entities shall pay any tax due and file a wine tax return on Form WIT for sacramental wine sold in Montana:

(a) sacramental wine licensees located outside Montana for sacramental wine sold to officials of churches or other established religious organizations;

(b) licensed wineries for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees; and

(c) table wine distributors for sacramental wine containing not more than 16 percent alcohol by volume sold to licensed retailers and for sacramental wine containing not more than 24 percent alcohol by volume sold to sacramental wine licensees.

(2) Failure to file the required return or pay the tax is sufficient cause for the assessment of penalties and interest in accordance with 15-1-216 and 16-1-411, MCA, and other penalties provided in 16-4-406, MCA.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-411, 16-3-404, 16-3-411, 16-4-107, 16-4-313, 16-4-1101, 16-4-1102, 16-4-1103, MCA
History: NEW, 2019 MAR p. 2058, Eff. 11/9/19; AMD, 2024 MAR p. 759, Eff. 4/13/24.

Subchapter 42.13.5 Drive-up Windows

Mont. Admin. R. 42.13.501 Drive-Up Windows

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 16-1-303, MCA
Implementing statute(s): Sec. 16-3-303, MCA, Title 16, chapter 3, part 3, MCA, and Title 16, chapter 4, MCA
History: NEW, 1980 MAR p. 1087, Eff. 3/28/80; AMD, 1985 MAR p. 170, Eff. 2/15/85; REP, 1992 MAR p. 2187, Eff. 9/25/92.

Mont. Admin. R. 42.13.502 Operation of Drive-Up Windows

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Re-pealed.)

History

Authorizing statute(s): Sec. 16-1-303 MCA
Implementing statute(s): Sec. 16-3-303, MCA, Title 16, chapter 3, part 3, MCA, and Title 16, chapter 4, MCA
History: NEW, 1980 MAR p. 1087, Eff. 3/28/80; AMD, 1985 MAR p. 170, Eff. 2/15/85; REP, 1992 MAR p. 2187, Eff. 9/25/92.

Subchapter 42.13.6 Breweries

Mont. Admin. R. 42.13.601 Brewery - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, a brewery shall:

(a) except as provided in 16-4-401(9), MCA, not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business;

(b) store alcoholic beverages only on the premises;

(c) store on the premises only the alcoholic beverages for which the premises are licensed or those authorized under an approved alternating proprietor arrangement;

(d) prevent the consumption of alcoholic beverages in the manufacturing area or storage area except as authorized by federal law;

(e) except as provided in 16-3-316(4)(a), MCA, sell and deliver its products to wholesalers and retailers only in original packaging;

(f) maintain records documenting its business operations including, but not limited to, the sale, production, storage, and processing of alcoholic beverages on the premises; and

(g) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law.

(2) A license to operate a brewery is not a retail license.

(3) In addition to all other requirements, a brewery with an annual nationwide production of less than 200 gallons shall:

(a) refrain from providing alcoholic beverages on the premises until the department approves a sample room;

(b) only provide samples without charge;

(d) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(e) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold for off-premises consumption pursuant to (f);

(f) sell all alcoholic beverages on its premises to a consumer for off-premises consumption under the following conditions:

(i) the alcoholic beverages must be sold in an approved sample room;

(ii) the alcoholic beverages must be in original packaging, prepared servings, or growlers only;

(iii) the sale of alcoholic beverages is prohibited between 2 a.m. and 8 a.m.; and

(g) subject to, and in addition to the off-premises consumption sales conditions in (f), a brewery may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online, in person, or through the phone.

(4) In addition to all other requirements, a small brewery with an annual nationwide production of not less than 200 gallons or more than 60,000 barrels that operates a sample room shall:

(a) refrain from providing alcoholic beverages on the premises until the department approves a sample room;

(b) provide with or without charge no more than 48 ounces of alcoholic beverages to any individual for on-premises consumption or prepared servings through curbside pickup, including a drive-through window, during a business day;

(c) provide not more than 2,000 barrels of beer annually for on-premises consumption, including the premises of any affiliated manufacturers as defined in 16-3-213, MCA;

(d) prevent the sale of alcoholic beverages for on-premises consumption between 8 p.m. and 10 a.m.;

(e) prevent the consumption or possession of alcoholic beverages on the premises between 9 p.m. and 10 a.m. by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (h) from individuals' possession by 9 p.m.;

(f) prevent the self-service of alcoholic beverages on the premises;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(h) sell alcoholic beverages on its premises to a consumer for off-premises consumption under the following conditions:

(i) the alcoholic beverages must be sold in an approved sample room;

(ii) all alcoholic beverages sold must be in original packaging, prepared servings, or growlers;

(iii) the sale of alcoholic beverages is prohibited between 2 a.m. and 8 a.m.;

(iv) the sale of alcoholic beverages in prepared servings is prohibited between 8 p.m. and 10 a.m.;

(i) subject to, and in addition to the off-premises consumption sales conditions in (h), a brewery may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online, in person, or through the phone; and

(j) for each brewery participating in a distinct beer collaboration provided in 16-3-213(4), MCA, notify the department at least three business days prior to the collaboration and file all required reports with the department subsequent to the collaboration for tax collection purposes. For the purposes of administering 16-3-213(4), MCA, a "distinct collaboration beer" means a single beer manufactured through a single collaboration by two or more brewers. For example, if two brewers collaborate in March to make "Beer 123," that product constitutes one distinct collaboration beer. If the same two brewers collaborate to make the same beer at a later date in the year, that is considered a second distinct beer collaboration counting towards the collaborating brewers' statutory limit.

(5) In addition to all other requirements, a brewery with an annual nationwide production of 60,000 barrels or more may only sell beer in original packaging to a licensed beer distributor. Selling or providing alcoholic beverages to consumers for consumption on the premises and selling alcoholic beverages to retailers is prohibited.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-211, 16-3-213, 16-3-214, 16-3-242, 16-3-301, 16-3-304, 16-3-305, 16-3-312, MCA
History: NEW, 2001 MAR p. 449, Eff. 3/23/01; AMD, 2002 MAR p. 2337, Eff. 8/30/02; AMD, 2008 MAR p. 2183, Eff. 10/10/08; AMD, 2009 MAR p. 1021, Eff. 6/26/09; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2017 MAR p. 2085, Eff. 11/10/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.602 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-401, 16-1-404, 16-3-214, MCA
History: NEW, 2012 MAR p. 199, Eff. 1/27/12; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.13.603 Use of Flavors and Nonbeverage Ingredients Containing Alcohol in the Manufacturing of Beer

(1) A brewery licensed by the department and located in Montana that uses flavors and other nonbeverage ingredients containing alcohol in their blending and manufacturing processes is required to request such products through the department on a form supplied by the department.

(2) The department will process the request and notify the supplier, specified by the brewery, of the quantities and sizes of the various flavors and nonbeverage ingredients containing alcohol to be delivered to the brewery.

(3) For beer with alcohol content of 6 percent or less alcohol by volume, flavors and other nonbeverage ingredients containing alcohol may contribute no more than 49 percent of the overall alcohol content of the finished product.

(4) For beer with an alcohol content of more than 6 percent alcohol by volume, no more than 1.5 percent of the volume of the finished product may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol.

(5) All brewery beer formulas, for beer containing flavors and other nonbeverage ingredients containing alcohol, must be approved by the Alcohol and Tobacco Tax and Trade Bureau (TTB), prior to state approval. Brewers requesting label approval by the state, for beer containing flavors and other nonbeverage ingredients containing alcohol, must include a copy of their TTB formula approval letter.

(6) The brewery must keep all flavors and nonbeverage ingredients containing alcohol on its licensed premises.

(7) Flavors and nonbeverage ingredients containing alcohol can only be used for blending and manufacturing purposes and may not be resold, transferred, or given away. A brewery must receive approval from the department to destroy or dispose of any flavors or nonbeverage ingredients containing alcohol.

(8) A brewery must document and maintain records at their place of business of all flavors and nonbeverage ingredients containing alcohol used for blending and manufacturing purposes. The department may make an examination of any brewery's records and otherwise check the accuracy of the alcohol content of any malt beverage manufactured by the brewery.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-401, 16-1-404, MCA
History: NEW, 2012 MAR p. 199, Eff. 1/27/12.

Mont. Admin. R. 42.13.604 Importation of Beer

(1) An out-of-state brewery or beer importer not otherwise licensed in Montana that desires to ship beer to Montana must submit an application for registration pursuant to 16-4-101, MCA, pay the department a registration fee of $500, and receive department approval for the registration.

(2) The registration and fee described in (1) must be renewed annually by July 1.

(3) Each product that an out-of-state brewery or beer importer ships into Montana must conform to the requirements of ARM 42.13.201, 42.13.202, and 42.13.203.

(4) An out-of-state brewery or beer importer that fails to renew its registration or pay the fee provided in (2) is subject to cancellation or suspension of the registration, as authorized under 16-4-101, MCA.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-101, MCA
History: NEW, 2025 MAR, Notice No. 2025-244, Eff. 10/25/25.

Subchapter 42.13.7 Brewery Taxes

Mont. Admin. R. 42.13.701 Production Increments Used in the Calculation of Taxes on Beer

(1) Section 16-1-406, MCA, requires each barrel of beer sold in Montana to be taxed. This tax is based upon the total number of barrels of beer produced by a brewer in a year. For purposes of this tax, "year" means the department's fiscal year which begins on July 1 of each calendar year and ends on June 30 of the following calendar year. "Annual" or "annually" are synonymous with the department's "year."

For purposes of this tax, a tax year begins on July 1, and a "quarter" means a tax reporting period beginning July 1, October 1, January 1, and April 1 of each tax year.

(2) The brewer production increments and graduated per barrel tax rates provided in 16-1-406, MCA, correspond to a brewer's reported annual production regardless of whether the beer is produced nationally or internationally.

(a) For the purposes of production reporting and calculating taxes owed, a brewer who has produced 10,000 barrels of beer or less in the preceding year will begin the next year at the $1.30 per barrel tax rate. The quarter after the brewer exceeds a production increment, the per barrel tax rate will increase to the next production increment amount. For example, if the 5,001st barrel is produced during the first quarter, the tax rate will be $1.30 for all of the first quarter. The per barrel tax rate will increase to $2.30 beginning with the second quarter and will continue at that rate for the remainder of the year or until the quarter after the next production increment is exceeded.

(b) For the purposes of production reporting and calculating taxes owed, a brewer who has produced 10,001 barrels of beer or more in the preceding year will begin the next year at the $4.30 per barrel tax rate.

(c) For the purposes of production reporting and calculating taxes owed, a new brewer will begin the year at the $1.30 per barrel tax rate. The quarter after the new brewer exceeds a production increment, the per barrel tax rate will increase to the next production increment amount. If a new brewer produces more than 10,000 barrels in the first quarter of the year, all its production will be taxed at the $4.30 per barrel tax rate for the year.

(3) A brewer must notify both the department and its wholesalers, in writing, by the end of the quarter when a production increment is exceeded, resulting in the brewer moving to the next production increment.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-406, 16-1-409, MCA
History: NEW, 2002 MAR p. 955, Eff. 3/29/02; AMD, 2008 MAR p. 2183, Eff. 10/10/08; AMD, 2017 MAR p. 2085, Eff. 11/10/17; AMD, 2021 MAR p. 1061, Eff. 8/28/21; AMD, 2024 MAR p. 759, Eff. 4/13/24.

Mont. Admin. R. 42.13.702 Beer Tax Returns

(1) A brewery or beer wholesaler shall pay any beer taxes due and file a quarterly tax return with the department on Form BET, pursuant to 16-1-406, MCA. The form must be filed regardless of whether the brewery or beer wholesaler sold any beer during the quarter.

(2) A brewery or beer wholesaler must pay the beer tax and file the required return on or before the 15th day of the month following the end of the quarter for beer sold during the previous quarter.

(3) Failure to file the required return or pay the beer tax is sufficient cause for the assessment of penalties and interest in accordance with 15-1-216 and 16-1-406, MCA, and other penalties provided in 16-4-406, MCA.

(4) Sections (1) through (3) do not apply to a brewery or beer importer that sells its products solely to a beer wholesaler.

(5) For purposes of this tax, a tax year begins on July 1, and a "quarter" means a tax reporting period which begins July 1, October 1, January 1, and April 1 of each tax year.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-406, 16-3-211, MCA
History: NEW, 2008 MAR p. 2183, Eff. 10/10/08; AMD, 2017 MAR p. 2085, Eff. 11/10/17; AMD, 2024 MAR p. 759, Eff. 4/13/24.

Subchapter 42.13.8 Distilleries

Mont. Admin. R. 42.13.802 Distillery - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, a distillery shall:

(a) not sell, deliver, or provide any alcoholic beverages until the licensee has obtained a certificate of label approval or an exemption from label approval from the Alcohol and Tobacco Tax and Trade Bureau and product approval from the department;

(b) except as provided in 16-4-401(9), MCA, not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business;

(d) store on the premises only the alcoholic beverages for which the premises are licensed or those authorized under an approved alternating proprietor arrangement;

(e) except as provided in 16-3-316(4)(a), MCA, sell and deliver its product in Montana only in original packaging and to the department; and

(f) maintain records documenting its business operations including, but not limited to, the sale, production, storage, and processing of alcoholic beverages on the premises.

(2) A license to operate a distillery is not a retail license.

(3) In addition to all other requirements, a microdistillery shall:

(a) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law;

(b) only transfer alcoholic beverages from a manufacturing area or storage area to a sample room in original packaging;

(c) prevent the consumption of alcoholic beverages in the manufacturing area or storage area except as authorized by federal law;

(d) prevent the self-service of alcoholic beverages on the premises;

(e) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated;

(f) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold in original packaging for off-premises consumption;

(g) only provide alcoholic beverages to consumers at a microdistillery for on-premises or off-premises consumption that have been produced at the microdistillery. For purposes of this requirement only, an alcoholic beverage is considered to have been produced at a microdistillery only if:

(i) on a quarterly basis, at least 90 percent of the liquor provided at the microdistillery for on-premises or off-premises consumption was distilled at the microdistillery; and

(ii) all liquor provided at the microdistillery for on-premises and off-premises consumption contains alcohol that was distilled at the microdistillery;

(h) notify the department of the percentage of alcohol distilled at the microdistillery for each liquor product prior to providing the product to consumers at the microdistillery for on-premises or off-premises consumption. The microdistillery shall notify the department of any changes to the percentages on file with the department prior to providing the changed product to consumers.

(4) In addition to all other requirements, a microdistillery that operates a sample room shall:

(a) refrain from providing alcoholic beverages to consumers for on-premises consumption until a sample room is approved by the department;

(b) prevent the consumption or possession of alcoholic beverages outside of an approved sample room and any approved patio/deck;

(d) prevent the consumption or possession of alcoholic beverages on the premises between 9 p.m. and 10 a.m. by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (5) from individuals' possession by 9 p.m.; and

(e) regardless of the liquor product's alcohol content, provide no more than a combined total of 2 ounces of liquor products approved for labeling or exempt from labeling for on-premises consumption or prepared servings for curbside pickup to any individual during a business day.

(5) In addition to all other requirements, a microdistillery that conducts off-premises sales shall:

(a) sell alcoholic beverages only in original packaging;

(b) sell alcoholic beverages only in an approved sample room except for curbside pickup, including a drive-through window, that were ordered online, in person, or through the phone;

(c) sell no more than 4.5 liters of liquor product approved for labeling or exempt from labeling in one day to an individual;

(d) sell alcoholic beverages for off-premises consumption only between 8 a.m. and 2 a.m.; and

(e) deliver alcoholic beverages only to the department or an agency liquor store; the delivery of alcoholic beverages to consumers off-site is prohibited.

History

Authorizing statute(s): 16-1-303, 16-1-424, MCA
Implementing statute(s): 16-1-404, 16-3-301, 16-3-304, 16-3-305, 16-3-312, 16-4-311, 16-4-312, 16-4-501, MCA
History: NEW, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2014 MAR p. 979, Eff. 5/9/14; AMD, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.803 Distilleries - Product Pricing

(1) The department will provide each distillery with a standard quotation and specification form to report the necessary information for each product the distillery desires to sell in Montana.

(2) The distillery will advise the department the cost per case FOB Helena, Montana that the distillery intends to sell the product to the department.

(3) The distillery will provide the department with the total number of proof gallons manufactured, distilled, rectified, bottled, or processed, and sold nationwide to determine the distillery's tax and mark-up brackets.

(4) The department will generate the posted price per bottle from the distillery's case cost. The posted price includes the distillery's case cost delivered to Helena, Montana, the department's current freight rate to agency liquor stores, the state's mark-up, liquor excise tax and liquor license tax, rounded to the nearest five-cent increment.

(5) The posted price will remain the price until a revised form is submitted and approved by the department. A revised quote for regular listed products shall be submitted not less than 60 days prior to the effective date of the department's quarterly price book.

(6) Products offered by a distillery will be listed in an inventory class based on the criteria in accordance with ARM 42.11.406.

History

Authorizing statute(s): 16-1-303, 16-1-424, MCA
Implementing statute(s): 16-1-404, 16-4-311, 16-4-312, 16-4-501, MCA
History: NEW, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2014 MAR p. 979, Eff. 5/9/14.

Mont. Admin. R. 42.13.804 Microdistillery - Monthly Tax Return

(1) Each microdistillery shall electronically file with the department a monthly Excise and License Tax Return, as required by 16-1-424, MCA, reporting the following information:

(a) the total number of gallons distilled during the preceding calendar month to verify the distillery qualifies as a microdistillery based on its production level;

(b) the total number of bottles transferred to the sample room for on-premises consumption with or without charge at the distillery;

(d) the total number of bottles sold to consumers at retail for off-premises consumption;

(e) the total number of bottles donated to nonprofit and tax-exempt organizations, pursuant to 16-3-316, MCA;

(f) the total number of bottles brought to a state-allowed industry trade show pursuant to 16-1-307, MCA; and

(g) the total amount of liquor excise tax and liquor license tax due for the month being reported.

(2) All product provided to a consumer by the microdistillery must have a standard quotation and specification form on file with the department. If no form is provided to the department or, at the department's discretion, if the form provided is or appears to be incomplete or inaccurate, the department may determine the per-bottle liquor excise tax and liquor license tax that the distillery must pay. The liquor excise tax and liquor license tax will be determined by using the higher of:

(a) the retail selling price set by the microdistillery as the posted price; or

(b) an average cost for products within the same category and size by other domestic distilleries that sell product to the department.

(3) The department will notify the microdistillery of the posted price per bottle, the per-bottle liquor excise tax, and the liquor license tax amounts as determined in (2).

(4) The return must be accompanied by payment of the tax pursuant to 16-1-424, MCA, on or before the 15th day of each month for liquor sold during the previous month.

History

Authorizing statute(s): 16-1-303, 16-1-424, MCA
Implementing statute(s): 16-1-404, 16-1-424, 16-4-311, 16-4-312, 16-4-501, MCA
History: NEW, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2013 MAR p. 176, Eff. 2/1/13; AMD, 2014, MAR p. 979, Eff. 5/9/14; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.805 Microdistillery Sample Rooms

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-310, 16-4-312, MCA
History: NEW, 2007 MAR p. 483, Eff. 4/13/07; AMD, 2014 MAR p. 979, Eff. 5/9/14; REP, 2017 MAR p. 493, Eff. 4/29/17.

Mont. Admin. R. 42.13.806 Use of Outsourced Distilled Spirits in the Manufacturing of Distilled Spirits

(1) A distillery licensed by the department and located in Montana may procure bulk distilled spirits from another distilled spirits plant by requesting such products through the department on a form supplied by the department. The distillery may only use the acquired distilled spirits:

(a) to distill, rectify, blend, or manufacture its own distilled spirits; or

(b) for contract packaging purposes.

(2) A distillery may only obtain distilled spirits from sources authorized by the federal government, such as an entity that holds a basic permit or industrial permit.

(3) The department will process the request and notify the distilled spirits plant, specified by the distillery, of the quantities, proof, types, and sizes of distilled spirits to be delivered to the distillery.

(4) The distillery must keep all distilled spirits acquired from another distilled spirits plant at the distillery and must receive preapproval from the department to destroy or otherwise dispose of any distilled spirits the distillery acquired from another distilled spirits plant.

(5) A distillery must document and maintain records at its place of business for all distilled spirits acquired from another distilled spirits plant and document how it was used. The department may make an examination of any such records at any time.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-401, 16-1-404, 16-4-311, 16-4-312, MCA
History: NEW, 2012 MAR p. 199, Eff. 1/27/12; AMD, 2014 MAR p. 979, Eff. 5/9/14; AMD, 2019 MAR p. 2058, Eff. 11/9/19.

Mont. Admin. R. 42.13.807 Distillery Deliveries to Agency Liquor Stores

(1) A distillery delivering product to an agency liquor store pursuant to 16-4-311, MCA, shall report each delivery through the department's online reporting system within two business days of the delivery.

(2) The distillery shall maintain at its place of business a bill of lading signed by the individual at the agency liquor store who accepted the delivery. A duplicate copy of the bill of lading shall be given to the agency liquor store. The bill of lading shall contain the:

(a) date of delivery;

(b) agency liquor store number;

(d) product number;

(e) name of the distillery employee who made the delivery; and

(f) name of the agency liquor store employee who accepted the delivery.

(3) A distillery may only make deliveries of products for which a standard price quotation and specification form is on file with the department.

(4) A distillery may deliver product only upon an agency liquor store's request.

(5) The department shall pay the distillery within 15 days from the close of the month in which the distillery reports the delivery. The payment shall be:

(a) the cost per case, based on the product's standard price quotation and specification form on file with the department at the time the product is delivered; and

(b) beginning July 1, 2018, the department's freight rate per case at the time the product is delivered.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-311, MCA
History: NEW, 2015 MAR p. 2157, Eff. 1/1/16.

Subchapter 42.13.9 Responsible Alcohol Sales and Service Act

Mont. Admin. R. 42.13.901 Definitions

The following definitions apply to this subchapter:

(1) "Acceptable forms of identification" include:

(a) any state-issued driver’s license or identification card;

(b) any Canadian government-issued driver’s license or identification card;

(d) any federally recognized tribal identification card; and

(e) any government-issued identification in a digital or physical form.

(2) “Licensee” means the same as defined in 16-4-1003, MCA. For purposes of implementing 16-4-1002, MCA, and for RASS training compliance, a licensee may be referred to as:

(a) an “off-premises licensee” - a person or entity licensed by the department under 16-4-115, MCA, with or without delivery endorsement and operating the licensed business in accordance with ARM 42.13.1105; or

(b) an “on-premises licensee” - a person or entity licensed by the department under 16-3-213, 16-4-105, 16-4-201, 16-4-213, 16-4-311, 16-4-401, or 16-4-420, MCA, and operating the licensed business in accordance with ARM 42.13.405, 42.13.601, 42.13.802, 42.13.1102, 42.13.1103, 42.13.1104, or 42.13.1107, as applicable. An on-premises licensee also includes a concessionaire who has entered into a concession agreement with the on-premises licensee, authorized under 16-4-418, MCA, and ARM 42.12.133, and its employees.

(3) "Private training provider" means a private business providing RASS training using a department-approved program.

(4) "Proof of training document" means a document showing the RASS training program name, training date, and the participant who obtained a passing score on the exam.

(5) “RASS training” means the Responsible Alcohol Sales Service and Delivery Act training required under 16-4-1001, MCA, et seq.

(6) "State trainer" means a department-approved individual providing RASS training using the department's training program.

(7) "Training records" means documentation or information submitted electronically to the department by a state trainer or private training provider showing the RASS training program, training date, whether training was online or in person, and each participant's name, date of birth, and exam score.

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-4-1002, 16-4-1006, MCA
History: NEW, 2015 MAR p. 1205, Eff. 8/14/15; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-292, Eff. 3/7/26.

Mont. Admin. R. 42.13.902 State Training Program; Department and State Trainer Responsibilities

(1) The department shall:

(a) effective January 1, 2026, implement two RASS training programs: one for on-premises licensees, and one for off-premises licensees that meet the requirements of 16-4-115, 16-4-1006, and ARM 42.13.907, as applicable;

(b) update the training programs in (1)(a) following each legislative session, as needed;

(d) provide RASS training materials electronically;

(e) grade RASS training exams; and

(f) issue proof of RASS training documents.

(2) A state trainer shall:

(a) deliver RASS training utilizing the department's training programs;

(b) follow the department's RASS training programs delivery requirements;

(d) administer a training program exam provided by the department;

(e) electronically submit training records to the department within two weeks of a training session; and

(f) comply with all applicable laws, regulations, and department policies concerning the confidentiality of training participants' personally identifiable information in training records. Training records must be transmitted securely.

(3) The department will not pay state trainers for providing RASS training. State trainers may charge participants a fee for each training session.

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-4-115, 16-4-1006, MCA
History: NEW, 2012 MAR p. 122, Eff. 1/13/12; AMD, 2015 MAR p. 1205, Eff. 8/14/15; AMD, 2026 MAR, Notice No. 2025-292, Eff. 3/7/26.

Mont. Admin. R. 42.13.903 Licensee Responsibilities Regarding the Responsible Alcohol Sales and Service Act

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-3-301, 16-4-1001, 16-4-1002, 16-4-1003, 16-4-1004, 16-4-1005, 16-4-1006, 16-4-1007, 16-4-1008, 16-6-304, 16-6-305, MCA
History: NEW, 2012 MAR p. 122, Eff. 1/13/12; REP, 2015 MAR p. 1205, Eff. 8/14/15.

Mont. Admin. R. 42.13.904 Private Training Programs; Department and Private Trainer Responsibilities

(1) The department shall:

(a) effective January 1, 2026, issue decisions on private training program submissions for on-premises licensee and off-premises licensee training within 60 days;

(b) publish private training provider contact information on the department's website;

(d) evaluate private training provider program effectiveness, as needed, including the percentage of program participants who sell to underage or intoxicated persons;

(e) notify a private training provider of any required changes based upon training program deficiencies; and

(f) provide private training providers with a Montana specific exam for program participants to complete at the end of a training.

(2) A private training provider shall:

(a) update and electronically submit its training program materials for department approval within 30 days of receiving the notice in (1)(c);

(b) only utilize updated training program materials upon receipt of departmental approval;

(c) establish the time and location of in-person training sessions and notify the department at least two weeks in advance of any training;

(d) administer the required Montana exam and questions based upon the training program content requirements in ARM 42.13.907;

(e) grade exams;

(f) issue proof of training documents;

(g) electronically submit training records to the department within two weeks of a training session;

(h) contact training participants who fail a compliance check, while employed, to determine the reason for failure and report findings to the department; and

(i) comply with all applicable laws and department policies concerning the confidentiality of training participants’ personally identifiable information in training records. Training records must be transmitted to the department by secure means only.

(3) The department may review a private training provider’s training program if any five of the provider’s training participants fails a compliance check, while employed, in any consecutive four-month period.

(4) Upon determining that an approved training program is ineffective or that the private training provider failed to adhere to any requirement in (2), the department shall notify the provider, and the provider may be subject to corrective action, including suspension or decertification of its training program. To continue to offer training, the private training provider must cure program deficiencies and reapply to have its new training program reviewed and approved by the department.

(5) The department will not compensate a private training provider for training services. A provider may charge participants for a training session.

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-4-1006, MCA
History: NEW, 2012 MAR p. 122, Eff. 1/13/12; AMD, 2015 MAR p. 1205, Eff. 8/14/15; AMD, 2026 MAR, Notice No. 2025-292, Eff. 3/7/26.

Mont. Admin. R. 42.13.905 State Trainer Application and Approval Process

(1) To become a state trainer, an individual must complete an application form provided by the department, meet the criteria provided in this rule, and obtain department approval. The department may approve an application in its sole discretion.

(2) Applicants must attend a department training program, complete an exam, and achieve a minimum exam score of 90 percent to be certified as a state trainer.

(3) To remain certified, a state trainer must:

(a) conduct at least two RASS training sessions in any 12-month period;

(b) attend department training seminars when required; and

(4) Failure to comply with the requirements of this rule or with other training requirements provided in law, may result in suspension or revocation of a trainer’s certification.

(5) The department may also suspend or revoke a state trainer’s certification for issues due to crimes or unprofessional conduct.

(6) A state trainer whose certification has been revoked may reapply for certification under this rule after 180 days from the date of revocation.

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-4-1006, MCA
History: NEW, 2015 MAR p. 1205, Eff. 8/14/15; AMD, 2026 MAR, Notice No. 2025-292, Eff. 3/7/26.

Mont. Admin. R. 42.13.906 Private Training Program Provider Approval Process

(1) The department is authorized to approve a private training provider's program pursuant to 16-4-1006, MCA.

(2) Private training provider programs must comply with the training program requirements in 16-4-1006, MCA, and ARM 42.13.907.

(3) To offer in-person training, a private training program provider must submit:

(a) the training program materials, including the Montana specific training supplement;

(b) classroom materials used by the trainer and participants;

(d) a sample proof of training document.

(4) To offer online training, a private training program provider must:

(a) make the training program available to the department in its online format;

(b) incorporate videos, scenarios, or other materials into the training program; and

(5) A private training provider’s program is approved for two years unless it is revoked or suspended by the department, or withdrawn by the training provider. Prior to the expiration of the two-year term, the department shall notify the training provider of the current program’s expiration and the provider must submit its prospective training program materials under this rule and subject to ARM 42.13.903 to have its training program renewed.

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-4-1006, MCA
History: NEW, 2015 MAR p. 1205, Eff. 8/14/15; AMD, 2026 MAR, Notice No. 2025-292, Eff. 3/7/26.

Mont. Admin. R. 42.13.907 Requirements for on-Premises and Off-Premises Licensee Rass Training Programs

(1) In addition to the requirements in 16-4-1006, MCA, a RASS training program for on-premises consumption licensees must:

(a) provide the following minimum content:

(i) standard drink sizes and equivalency;

(ii) methods to identify and prevent sales to underage or intoxicated persons;

(iii) strategies used by underage persons to obtain alcohol;

(iv) acceptable forms of identification;

(v) actions that can be taken to prevent an alcohol-related incident from occurring;

(vi) the benefits of effective operational policies and document maintenance practices related to the service of alcoholic beverages for licensees, and licensee liability; and

(vii) best practices in the delivery of alcoholic beverages permitted under 16-4-201, MCA;

(b) consist of a minimum of two hours of content; and

(c) contain a minimum of six Montana specific techniques for denying alcohol sales using videos or other interactive training tools.

(2) In addition to the requirements in 16-4-115 and 16-4-1006, MCA, a RASS training program for off-premises consumption licensees must:

(a) provide the following minimum content:

(i) methods to identify underage or intoxicated persons and preventing sales of alcoholic beverages to them;

(ii) strategies used by underage persons to obtain alcoholic beverages;

(iii) acceptable forms of identification used to purchase alcoholic beverage purchases;

(iv) methods to prevent an alcohol-related incident from occurring;

(v) best practices in the delivery of alcoholic beverages; and

(vi) the benefits of effective operational policies and document maintenance practices related to the service of alcoholic beverages for licensees, and licensee liability.

(b) consist of a minimum of one hour of content; and

(c) contain a minimum of three Montana specific techniques for denying alcohol sales using videos or other interactive training tools.

(3) All RASS training programs must require participants to pass an exam with a score of 80 percent or better. A training program may allow participants to retake an exam if a first exam score was no lower than 70 percent. If participants score less than 70 percent on a first exam, the training program must require those participants to retake the entire training program and obtain a passing score on the retake exam.

History

Authorizing statute(s): 16-4-1009, MCA
Implementing statute(s): 16-4-115, 16-4-1006, MCA
History: NEW, 2015 MAR p. 1205, Eff. 8/14/15; AMD, 2026 MAR, Notice No. 2025-292, Eff. 3/7/26.

Subchapter 42.13.10 Manufacturing Arrangements

Mont. Admin. R. 42.13.1002 Alternating Proprietor on a Manufacturer's Premises

(1) An alternating proprietor arrangement occurs when a tenant manufacturer utilizes the licensed premises and equipment of a host manufacturer to produce and/or package alcoholic beverages.

(2) The tenant must be licensed by the department to manufacture the alcoholic beverages to be produced and/or packaged.

(3) The tenant and host must seek the department's approval for each alternating proprietor arrangement necessitating approval by the Alcohol and Tobacco Tax and Trade Bureau.

(4) To apply, the tenant and host shall submit a complete application to the department that includes:

(a) documentation of Alcohol and Tobacco Tax and Trade Bureau approval;

(b) a description of the areas and equipment to be used by the tenant;

(d) a copy of the executed agreement between the tenant and host.

(5) The department shall notify the tenant and host in writing of its approval or denial of the alternating proprietor arrangement within 15 business days of receiving all requested information.

(6) The tenant and host shall notify the department in writing within ten business days of receiving notice from the Alcohol and Tobacco Tax and Trade Bureau that approval for an existing alternating proprietor arrangement has been revoked.

(7) All regulations set forth in Title 27 of the Code of Federal Regulations, in effect on October 5, 2015, addressing alternating proprietor arrangements are adopted by reference, except where the provisions of those regulations may be contrary to or inconsistent with the provisions of Montana law or department rule. Copies may be obtained from the United States Treasury at www.ttb.gov . Failure to comply with those regulations shall constitute a violation of this rule and may subject the tenant and host to administrative action, including revocation of their manufacturing licenses.

(8) The tenant shall maintain possession, title, and control over all raw materials and its product on the host's premises.

(9) The tenant's product must be separate and identifiable from the products of all other tenants and the host at all stages of production and through removal of the product from the host's premises.

(10) The tenant and host shall keep separate records of their respective production and removals. The department may make an examination of any records kept by the tenant and host.

(11) The host is prohibited from selling, providing, or distributing the tenant's product, with or without charge, in the host's sample room, on its licensed premises, or elsewhere.

(12) The tenant must adhere to all applicable distribution requirements set forth in the Montana Alcoholic Beverage Code.

(13) In addition to all other requirements imposed by this rule, where the tenant is a brewery:

(a) for purposes of the tax imposed by 16-1-406, MCA:

(i) wholesalers shall pay the tax due on beer purchased from the tenant; and

(ii) the tenant shall pay the tax due on beer sold directly to consumers and retailers;

(b) for purposes of the tax imposed by 16-1-406, MCA, the small brewery 60,000-barrel production cap in 16-3-213 and 16-3-214, MCA, all beer produced by a tenant at a host's premises shall be considered as part of the tenant's annual nationwide production; and

(c) a tenant with an annual nationwide production between 200 gallons and 60,000 barrels may provide, with or without charge, beer in its sample room only if the beer was brewed and fermented at its premises. This restriction includes a prohibition against a tenant providing beer in its sample room that was brewed or fermented at a host's premises. A tenant that brewed and fermented beer at its premises and packaged the beer at a host's premises may provide that beer, with or without charge, in the tenant's sample room.

(14) In addition to all other requirements imposed by this rule, where the tenant is a winery:

(a) for purposes of the tax imposed by 16-1-411, MCA:

(i) wholesalers shall pay the tax due on wine purchased from the tenant; and

(ii) the tenant shall pay the tax due on wine sold directly to consumers and retailers; and

(b) a tenant may provide, with or without charge, wine for consumption on its licensed premises that was produced and/or packaged at its premises or a host's premises.

(15) In addition to all other requirements imposed by this rule, where the tenant is a distillery:

(a) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, agency liquor stores shall pay the tax due on liquor purchased from the department;

(b) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, and the microdistillery 200,000 proof gallon production cap set forth in 16-4-310, MCA, all liquor produced by a tenant at a host's premises shall be considered liquor produced by the tenant; and

(c) a tenant distillery with an annual production of 200,000 proof gallons or less may provide, with or without charge, liquor in its sample room only if the liquor was produced at its premises. This restriction includes a prohibition against a tenant distillery providing liquor in its sample room that was produced at a host's premises, subject to the production exception in ARM 42.13.802.

(16) When the host manufacturer's licensed premises is a colocated premises, as allowed in 16-4-401, MCA, the tenant manufacturer may only utilize the manufacturing area. Retail sales by the tenant manufacturer on the host manufacturer's premises are prohibited.

(17) An alternating proprietor arrangement may only be conducted in accordance with the provisions of this rule. Failure to abide by the provisions of this rule may subject the tenant and host to administrative action, including revocation of their manufacturing licenses.

History

Authorizing statute(s): 16-1-201, 16-1-303, MCA
Implementing statute(s): 16-1-201, 16-1-401, 16-1-404, 16-1-406, 16-1-411, 16-3-213, 16-3-214, 16-4-310, 16-4-311, 16-4-312, 16-4-406, MCA
History: NEW, 2015 MAR p. 2157, Eff. 12/11/15; AMD, 2019 MAR p. 2058, Eff. 11/9/19; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.1003 Contract Manufacturing

(1) Contract manufacturing occurs when a manufacturer utilizes its licensed premises and equipment to produce and/or package alcoholic beverages for another manufacturer to sell, called the client.

(2) The contract manufacturer and the client must be licensed by the department to manufacture the alcoholic beverages to be produced and/or packaged.

(3) The contract manufacturer and client must seek the department's approval prior to engaging in a contract manufacturing arrangement. To apply, the contract manufacturer and client shall submit a complete application to the department.

(4) The department shall notify the contract manufacturer and client in writing of its approval or denial of the contract manufacturing arrangement within 15 business days of receiving all requested information.

(5) The sale and distribution of alcoholic beverages manufactured by the contract manufacturer may only be conducted as follows:

(a) a contract manufacturer is prohibited from selling, providing, or distributing the product, with or without charge, in the contract manufacturer's sample room, on its licensed premises, or elsewhere;

(b) the contract manufacturer may only sell the product to the client; and

(c) once the client holds title to the product, the client must adhere to all applicable distribution requirements in the Montana Alcoholic Beverage Code, the same as though the client produced the product.

(6) The contract manufacturer and client shall maintain control over their separate business records at all times. The department may make an examination of the records of the contract manufacturer or client.

(7) In addition to all other requirements imposed by this rule, where the client is a brewery:

(a) for purposes of the tax imposed by 16-1-406, MCA:

(i) wholesalers shall pay the tax due on beer purchased from the client; and

(iii) the client shall pay the tax due on beer sold directly to consumers and retailers;

(b) for purposes of the tax imposed by 16-1-406, MCA, the small brewery 60,000-barrel production cap set forth in 16-3-213 and 16-3-214, MCA, all beer produced by the contract manufacturer for the client shall be considered as part of the client's annual nationwide production; and

(c) a client with an annual nationwide production between 200 gallons and 60,000 barrels may provide, with or without charge, beer in its sample room only if the beer was brewed and fermented at its premises. This restriction includes a prohibition against a client providing beer in its sample room that was brewed or fermented at a contract manufacturer's premises. A client that brewed and fermented beer at its premises and then had the beer packaged at a contract manufacturer's premises may provide that beer, with or without charge, in the client's sample room.

(8) In addition to all other requirements imposed by this rule, where the client is a winery:

(a) for purposes of the tax imposed by 16-1-411, MCA:

(i) wholesalers shall pay the tax due on wine purchased from the client; and

(ii) the client shall pay the tax due on wine sold directly to consumers and retailers; and

(b) the client may provide, with or without charge, wine for consumption on its licensed premises only if the wine was produced by the client. This restriction includes a prohibition against the client providing wine that was produced by a contract manufacturer. A client that produced the wine at its premises and then had the wine packaged at a contract manufacturer's premises may provide that wine, with or without charge, for consumption on its licensed premises.

(9) In addition to all other requirements imposed by this rule, where the client is a distillery:

(a) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, agency liquor stores shall pay the tax due on liquor purchased from the department;

(b) for purposes of the taxes imposed by 16-1-401 and 16-1-404, MCA, and the microdistillery 200,000 proof gallon production cap set forth in 16-4-310, MCA, all liquor produced by a contract manufacturer for the client shall be considered as part of the client's annual nationwide production; and

(c) a client with an annual production of 200,000 proof gallons or less may provide, with or without charge, liquor in its sample room only if the liquor was produced at its premises. This restriction includes a prohibition against a client providing liquor in its sample room that was produced at a contract manufacturer's premises, subject to the production exception in ARM 42.13.802.

(10) Except as provided in (11), a contract manufacturing arrangement may only be conducted in accordance with the provisions of this rule. Failure to abide by the provisions of this rule may subject the contract manufacturer and client to administrative action, including revocation of their manufacturing licenses.

(11) The department may approve a contract manufacturing arrangement that does not fit within the bounds of this rule only if the proposed arrangement is not prohibited by federal and state alcoholic beverage regulations. This may include a contract manufacturing arrangement where the client is not located in Montana.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-1-401, 16-1-404, 16-1-406, 16-1-411, 16-3-213, 16-3-214, 16-4-310, 16-4-311, 16-4-312, 16-4-406, MCA
History: NEW, 2015 MAR p. 2157, Eff. 12/11/15; AMD, 2017 MAR p. 346, Eff. 3/25/17; AMD, 2019 MAR p. 2058, Eff. 11/9/19; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Subchapter 42.13.11 Alcoholic Beverage Retailers

Mont. Admin. R. 42.13.1102 All-Beverages License - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, an all-beverages licensee shall:

(a) only purchase and possess on the premises liquor and fortified wine from an agency liquor store, beer from a beer wholesaler or brewery, and table wine from a table wine distributor or winery, except as permitted under 16-3-301(8), 16-3-302(5), 16-4-213(4)(a)(iii), 16-4-213(8), 16-4-401(9)(e), 16-4-404(7), and 16-6-306(3), MCA;

(b) store alcoholic beverages only on the premises or in an approved noncontiguous alcoholic beverage storage area or resort alternate alcoholic beverage storage facility, as applicable;

(d) prevent the self-service of alcoholic beverages on the premises, except as provided in 16-3-311(1), MCA, and ARM 42.13.1108;

(e) prevent the sale of alcoholic beverages for on-premises or off-premises consumption between 2 a.m. and 8 a.m.;

(f) prevent the consumption or possession of alcoholic beverages on the premises between 2 a.m. and 8 a.m. by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (2) from individuals' possession by 2 a.m.;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated; and

(h) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold in original packaging, prepared servings, or growlers for off-premises consumption, except as described in (5).

(2) An all-beverages licensee may sell alcoholic beverages for off-premises consumption under the following conditions:

(a) alcoholic beverages must be sold in original packaging, prepared servings filled at the time of sale, or growlers of beer or table wine filled at the time of sale; and

(b) the sale of alcoholic beverages must occur on the premises, except as provided in (3) and (4).

(3) An all-beverages licensee may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online, in person, or through the phone.

(4) An all-beverages licensee may deliver alcoholic beverages to a customer off-site under the following conditions:

(a) the licensee must apply for, and be issued, a delivery endorsement from the department. The application fee for the delivery endorsement is provided in ARM 42.12.111;

(b) alcoholic beverage delivery is limited to beer and wine in original packaging. The delivery of liquor is prohibited;

(c) the licensee may deliver alcoholic beverages if the delivery includes food purchased from and prepared by the licensee. The purchase price of the delivered beer and wine may not exceed the purchase price of the delivered food; and

(d) the licensee must use its employees who are 21 years of age or older for all food deliveries that include alcoholic beverages. Third-party delivery companies are prohibited.

(5) An all-beverages licensee may purchase up to a total of six gallons of beer or table wine per day from in-state licensed retailers. The licensee shall maintain records for any beer or table wine purchased from in-state retailers separate from those for inventory purchased through ordinary means of distribution. Records shall include:

(a) the date of purchase;

(b) the type(s), brand(s), and quantity of beer or table wine purchased; and

(6) An all-beverages licensee may allow a customer to take a partially consumed bottle of table wine to go if the bottle is adequately sealed with the original cork or bottle top. This provision is not intended to supersede any jurisdiction's open container laws or contravene 61-8-1026, MCA, regarding open alcoholic beverage containers in motor vehicles.

(7) If a licensee leases or subleases its kitchen, or another specified area within its premises, to allow another business entity to operate a business within the licensed premises, as conditioned in 16-3-311(1)(a), MCA, then the licensee shall ensure adequate safeguards are in place to prevent access to the alcoholic beverage inventory by the other business entity. The area leased or subleased by the licensee shall be clearly marked on the floor plan, a copy of which shall be submitted to the department.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-3-303, 16-3-304, 16-3-305, 16-3-311, 16-3-312, 16-4-213, 16-4-405, 16-6-303, 16-6-306, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD and TRANS, from ARM 42.12.134, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.13.1103 Restaurant Beer and Wine License - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, a restaurant beer and wine licensee shall:

(a) only purchase and possess on the premises fortified wine from an agency liquor store, beer from a beer wholesaler or brewery, and table wine from a table wine distributor or winery, except as permitted under 16-3-301(8), 16-3-302(5), 16-4-213(4)(a)(iii), 16-4-404(7), and 16-6-306(3), MCA;

(b) store alcoholic beverages only on the premises or in an approved noncontiguous alcoholic beverage storage area;

(d) serve beer and wine only to patrons who order food;

(e) state alcoholic beverage sales on the food bill;

(f) obtain at least 65 percent of its annual gross income from the sale of food, excluding the sale of nonalcoholic beverages;

(g) prevent the self-service of alcoholic beverages on the premises, except as provided in 16-3-311(1), MCA, and ARM 42.13.1108;

(h) prevent the sale of alcoholic beverages between 11 p.m. and 11 a.m.;

(i) prevent the consumption or possession of alcoholic beverages on the premises between 11 p.m. and 11 a.m. by removing all alcoholic beverages from individuals' possession by 11 p.m. other than those sold for off-premises consumption pursuant to (2);

(j) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated; and

(k) prevent the consumption of alcoholic beverages that were not purchased at the premises, except as described in (5).

(2) A restaurant beer and wine licensee may sell alcoholic beverages for off-premises consumption under the following conditions:

(a) food must be included in the purchase and the alcoholic beverages stated on the customer's bill;

(b) alcoholic beverages must be sold in original packaging, prepared servings, or growlers filled at the time of sale; and

(c) the sale of alcoholic beverages must occur on the premises, except for curbside pickup, including a drive-through window, that were ordered online, in person, or through the phone.

(3) A restaurant beer and wine licensee may deliver alcoholic beverages to a customer off-site under the following conditions:

(a) the licensee must apply for, and be issued, a delivery endorsement from the department. The application fee for the delivery endorsement is provided in ARM 42.12.111;

(b) alcoholic beverage delivery is limited to beer and wine in original packaging;

(c) the delivery must include food purchased from and prepared by the licensee. The purchase price of the delivered beer and wine may not exceed the purchase price of the delivered food; and

(d) the licensee must use its employees who are 21 years of age or older for all food deliveries that include alcoholic beverages. Third-party delivery companies are prohibited.

(4) In addition to the requirements in (1) through (3), any restaurant for which a restaurant beer and wine license was not in effect as of April 9, 2009, shall:

(a) serve an evening dinner meal at least four days a week for at least two hours a day between 5 p.m. and 11 p.m.; and

(b) sell the majority of its food and drinks, excluding any carry-out business, in nondisposable containers.

(5) A restaurant beer and wine licensee may purchase up to a total of six gallons of beer or table wine per day from licensed in-state retailers. The licensee shall maintain records for beer or table wine purchased from in-state retailers separate from those for inventory purchased through ordinary means of distribution. Records shall include:

(a) the date the beer or table wine was purchased;

(b) the type(s), brand(s), and quantity of beer or table wine purchased; and

(6) A restaurant beer and wine licensee may allow a customer to take partially consumed bottles of wine to go if the bottle is adequately sealed with the original cork or bottle top. This provision is not intended to supersede any jurisdiction's open container laws or contravene 61-8-1026, MCA, regarding open alcoholic beverage containers in motor vehicles.

(7) If a licensee leases or subleases its kitchen, or another specified area, to allow another business entity to operate a business within the licensed premises, as conditioned in 16-3-311(1)(a), MCA, then the licensee shall ensure adequate safeguards are in place to prevent access to the alcoholic beverage inventory by the other business entity. The area leased or subleased by the licensee shall be clearly marked on the floor plan, a copy of which shall be submitted to the department.

(8) A licensee which leases or subleases its kitchen, or another specified area of its licensed premises, must still meet the definition of "restaurant" and fulfill the license requirements stated in 16-4-420, MCA.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-3-305, 16-3-311, 16-3-312, 16-4-405, 16-4-420, 16-6-306, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD and TRANS, from ARM 42.12.135, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.13.1104 On-Premises Consumption Beer and Wine License - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, an on-premises consumption beer and wine licensee shall:

(a) only purchase and possess on the premises beer from a beer wholesaler or brewery, fortified wine from an agency liquor store, and table wine from a table wine distributor or winery, except as permitted under 16-3-301(8), 16-3-302(5), 16-4-213(4)(a)(iii), 16-4-401(9)(e), 16-4-404(7), and 16-6-306(3), MCA;

(b) store alcoholic beverages only on the premises or in an approved noncontiguous alcoholic beverage storage area;

(d) prevent the self-service of alcoholic beverages on the premises, except as provided in 16-3-311(1), MCA;

(e) prevent the sale of alcoholic beverages for on-premises or off-premises consumption between 2 a.m. and 8 a.m.;

(f) prevent the consumption or possession of alcoholic beverages on the premises between 2 a.m. and 8 a.m., by removing all alcoholic beverages other than those sold for off-premises consumption pursuant to (2) from individuals' possession by 2 a.m.;

(g) prevent the consumption or possession of alcoholic beverages on the premises by persons who are under 21 years of age or actually, apparently, or obviously intoxicated; and

(h) prevent the on-premises consumption of alcoholic beverages not sold or provided at the premises and those sold for off-premises consumption pursuant to (2).

(2) An on-premises consumption beer and wine licensee may sell alcoholic beverages for off-premises consumption under the following conditions:

(a) alcoholic beverages must be sold in original packaging, prepared servings filled at the time of sale, or growlers of beer or table wine filled at the time of sale; and

(b) except as provided in (4) and (5), the sale of alcoholic beverages must occur on the premises.

(3) An on-premises consumption beer and wine licensee may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online, in person, or through the phone.

(4) An on-premises consumption beer and wine licensee may deliver alcoholic beverages to a customer off-site under the following conditions:

(a) the licensee must apply for, and be issued, a delivery endorsement from the department. The application fee for the delivery endorsement is provided in ARM 42.12.111;

(b) alcoholic beverage delivery is limited to beer and wine in original packaging;

(d) the licensee must use its employees who are 21 years of age or older for all food deliveries that include alcoholic beverages. Third-party delivery companies are prohibited.

(5) An on-premises consumption beer and wine licensee may purchase up to a total of six gallons of beer or table wine per day from licensed in-state retailers. The licensee shall maintain records for beer or table wine purchased from in-state retailers separate from those for inventory purchased through ordinary means of distribution. Records shall include:

(a) the date the beer or table wine was purchased;

(b) the type(s), brand(s), and quantity of beer or table wine purchased; and

(6) An on-premises consumption beer and wine licensee may allow a customer to take partially consumed bottles of wine with them to go if the bottle is adequately sealed with the original cork or bottle top. This provision is not intended to supersede any jurisdiction's open container laws or contravene 61-8-1026, MCA, regarding open alcoholic beverage containers in motor vehicles.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-3-303, 16-3-304, 16-3-305, 16-3-311, 16-3-312, 16-3-411, 16-4-104, 16-4-105, 16-4-405, 16-6-306, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 2980, Eff. 12/12/14; AMD and TRANS, from ARM 42.12.136, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.13.1105 Off-Premises Consumption Beer and Table Wine License - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, an off-premises consumption beer and table wine licensee shall:

(a) only purchase and possess on the premises beer from a beer wholesaler or brewery and table wine from a table wine distributor or winery except as permitted under 16-3-301(8) and 16-4-404(7), MCA;

(b) store beer and/or table wine only on the premises or in an approved noncontiguous alcoholic beverage storage area;

(d) operate as a stand-alone beer and/or table wine business, grocery store, or drugstore licensed as a pharmacy; and

(e) prevent the sale of alcoholic beverages between 2 a.m. and 8 a.m.

(2) The sale of alcoholic beverages must occur on the premises. An off-premises consumption beer and/or table wine licensee may use curbside pickup, including a drive-through window, to sell alcoholic beverages that were ordered online, in person, or through the phone.

(3) In addition to the requirements in (1), an off-premises consumption beer and/or table wine licensee that operates in a grocery store shall maintain groceries with a retail value of at least $3,000 at all times. The inventory must include at least three different types of items in each of the following categories: meats, vegetables, fruits, baked goods, dairy, and household supplies. For example, three different types of items in the dairy category would be cheese, milk, and butter, but skim milk, chocolate milk, and whole milk would not be considered as three different types of items in the dairy category.

(4) The delivery of alcoholic beverages by an off-premises consumption beer and table wine licensee to the consumer off-site is prohibited.

(5) An off-premises consumption beer and/or table wine licensee may purchase up to a total of six gallons of beer or table wine per day from licensed in-state retailers. The licensee shall maintain records for beer or table wine purchased from retailers separate from those for inventory purchased through ordinary means of distribution. Records shall include:

(a) the date the beer or table wine was purchased;

(b) the type(s), brand(s), and quantity of beer or table wine purchased; and

(6) An off-premises consumption beer and wine licensee that operates in conjunction with a grocery store or drugstore licensed as a pharmacy may use its own employees, who are 21 years of age or older, or an independent contractor to deliver beer and wine to a customer under the following conditions:

(a) the licensee must apply for the delivery endorsement, pay the required processing fee in ARM 42.12.111, and receive department approval for the endorsement; and

(b) delivery is limited to beer and wine in its original packaging only.

(7) An off-premises consumption beer and wine licensee may also use a third-party delivery licensee to deliver beer and wine in its original packaging.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-301, 16-3-304, 16-3-305, 16-3-312, 16-4-115, 16-4-307, 16-4-402, 16-4-405, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD, 2014 MAR p. 1277, Eff. 6/13/14; AMD and TRANS, from ARM 42.12.137, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24; AMD, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Mont. Admin. R. 42.13.1106 Access Control Systems (acs)

(1) A licensee who uses an ACS at the licensee's licensed premises, as provided in 16-6-103, MCA, shall notify the department using a form provided by the department:

(a) at least three business days prior to the licensee implementing the ACS; and

(b) no later than July 1 of the renewal period after the licensee ceases using the ACS.

(2) Notification information shall include:

(a) the date of activation, or deactivation, of the ACS; and

(b) acknowledgment from a local law enforcement agency with jurisdiction over the licensed premises that the agency was notified.

(3) A licensee is in violation of this rule and is subject to administrative action if the licensee fails to:

(a) notify the department and local law enforcement prior to implementing an ACS;

(b) notify the department and local law enforcement when the licensee ceases to use an ACS; or

History

Authorizing statute(s): 16-1-303, 16-6-103, MCA
Implementing statute(s): 16-6-103, MCA
History: NEW, 2019 MAR p. 2257, Eff. 12/7/19.

Mont. Admin. R. 42.13.1107 Colocated License – Conditions for Operating

(1) In addition to the conditions for operating the license types provided in ARM 42.13.405, 42.13.601, 42.13.802, 42.13.1102, 42.13.1103, and 42.13.1104, a colocated licensee shall:

(a) provide and serve through its retail license, alcoholic beverages that were produced by other manufacturers that are not affiliated or financially interested, either directly or indirectly, in the operation of the manufacturing business at the colocated premises. This includes sufficient on-hand inventory to meet the demand of the public;

(b) store alcoholic beverages in compliance with applicable federal laws; and

(c) deliver alcoholic beverages pursuant to the limitations set forth in 16-3-213, 16-3-214, 16-3-411, 16-4-312, 16-4-401(9)(e), MCA.

(2) A manufacturing licensee is responsible for paying alcoholic beverage taxes and filing any required returns for any alcoholic beverages transferred from the manufacturing area to the retail area at the colocated license.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-4-401, MCA
History: NEW, 2024 MAR p. 2303, Eff. 9/21/24.

Mont. Admin. R. 42.13.1108 Self-Pour Devices

(1) An on-premises consumption licensee who wants to use a self-pour device for customers to self-pour beer and wine, as provided in 16-3-311, MCA, must obtain department approval for the device prior to customer use.

(2) The licensee must submit a completed form, provided by the department, and provide an updated floor plan of the licensed premises showing the location of each self-pour device for department review and approval.

(3) Upon receipt of the items in (2), the department will notify the licensee within seven business days of the approval or denial of the self-pour device request.

(4) The licensee and its employees, or a concessionaire and its employees, may provide customer access to a self-pour device if the customer is at least 21 years of age and is not actually, apparently, or obviously intoxicated.

(5) A self-pour device shall not dispense more than 48 ounces of beer or 15 ounces of table wine per customer per purchase transaction.

(6) A customer may purchase additional beer or wine through a self-pour device from the service staff subject to the conditions in (4) and (5).

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-311, MCA
History: NEW, 2026 MAR, Notice No. 2025-304, Eff. 1/24/26.

Subchapter 42.13.12 Beer Wholesalers and Table Wine Distributors

Mont. Admin. R. 42.13.1202 Beer Wholesaler and Table Wine Distributor - Conditions for Operating

(1) In addition to all other alcoholic beverage licensing requirements, a beer wholesaler and table wine distributor shall:

(a) maintain a fixed place of business, sufficient capital, and the facilities, storehouse, receiving house, or warehouse for the receiving, storing, and handling of beer, table wine, and sacramental wine in large quantities for distribution and sale;

(b) receive beer, table wine, and sacramental wine from an importer, brewery, winery, wholesaler, or distributor only if:

(i) the importer, brewery, winery, wholesaler, or distributor is licensed by or registered with the department;

(ii) all product labels have been approved by the department; and

(iii) an agreement of distributorship agreement is in place between the manufacturer or importer and the wholesaler or distributor and has been filed with the department in accordance with 16-3-226 and 16-3-416, MCA;

(c) store beer, table wine, and sacramental wine only on the licensed premises or the premises of its licensed subwarehouse;

(d) except as provided in 16-3-219 and 16-3-418, MCA, deliver alcoholic beverages using its own employees, trucks, and equipment;

(e) sell beer, table wine, and sacramental wine only in its original packaging;

(f) sell and deliver beer, table wine, and sacramental wine under its Montana license only to the premises of other licensed wholesalers or distributors, licensed alcoholic beverage retailers, agency liquor stores, or to the location of catered events of a licensed alcoholic beverage retailer, special events for a special permit holder, approved noncontiguous alcoholic beverage storage areas or resort alternate alcoholic beverage storage facilities, or under a department-approved delivery arrangement, as provided in 16-3-219, MCA. This does not in any way prohibit the licensee from operating in compliance with other state or federal law;

(g) prevent the consumption of alcoholic beverages on the licensed premises and the premises of any licensed subwarehouse;

(h) not possess any interest in real or personal property owned, occupied, or used by an alcoholic beverage retailer in the conduct of the retailer's business; and

(i) electronically file all required alcoholic beverage tax returns and pay any taxes owed as provided in law.

(2) A beer wholesaler and/or table wine distributor shall only sell product under a bona fide sale. It shall not sell product on consignment, under conditional sale, with the privilege of return, or in a sale involving acquisition of other products.

(3) A beer wholesaler and/or table wine distributor shall only exchange or accept product returned from an alcoholic beverage retailer, wholesaler, or distributor for ordinary and usual commercial reasons, such as defective product, a delivery error, and discontinued product or business. It shall not accept product returned based upon the product being overstocked, slow moving, or seasonal.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-212, 16-3-219, 16-3-231, 16-3-232, 16-3-242, 16-3-301, 16-3-404, 16-3-406, 16-3-418, 16-4-103, 16-4-106, 16-4-108, 16-4-402, 16-4-415, MCA
History: NEW, 2012 MAR p. 1846, Eff. 9/21/12; AMD and TRANS, from ARM 42.12.138, 2017 MAR p. 493, Eff. 4/29/17; AMD, 2020 MAR p. 101, Eff. 1/18/20; AMD, 2022 MAR p. 1932, Eff. 9/26/22; AMD, 2024 MAR p. 2303, Eff. 9/21/24.

Subchapter 42.13.13 Alcoholic Beverage Shipments

Mont. Admin. R. 42.13.1301 Reporting Requirements for Common Carriers

(1) A common carrier that delivers shipments identified as containing alcoholic beverages to a person or entity in the state shall maintain those shipping records for 30 months and, upon request from the department, report such deliveries to the department as provided in (2).

(2) Reports must be filed electronically on a form provided by the department on or before the 15th day of each January, April, July, and October for deliveries made during the previous quarter, and include the following information about each delivery:

(a) name and address of the consignor of the alcoholic beverages;

(b) name and address of the consignee of the alcoholic beverages;

(d) weight of the package; and

(e) freight tracking information for the shipment.

(3) If the department determines that a reported delivery transaction violates the Alcoholic Beverage Code or a rule of the department, then the department will notify the common carrier of the basis of the violation so the carrier may take the appropriate action to cease further deliveries of alcoholic beverages in Montana from that consignor until otherwise notified by the department.

History

Authorizing statute(s): 16-1-303, MCA
Implementing statute(s): 16-3-101, 16-6-108, 16-6-302, MCA
History: NEW, 2021 MAR p. 234, Eff. 2/27/21.

Chapter 42.14 Lodging Facility Use Tax and Rental Vehicle Use Sales Tax

Subchapter 42.14.1 Registration and Permits

Mont. Admin. R. 42.14.101 Definitions

The following definitions apply to this subchapter:

(1) "Accommodations" means accommodations, as defined in 15-68-101, MCA.

(2) "Gross receipts" means the total gross sales received by a seller for use of accommodations, whether the charges were received in cash, credits, and property or services.

(3) "Lodging facility sales and use tax," for the purpose of these rules, means the lodging facility use tax as it applies to Title 15, chapter 65, MCA, and the sales tax as it applies to Title 15, chapter 68, MCA.

(4) "Nontaxable receipts" means exempt sales, as defined in ARM 42.14.303. Also included are sales deemed by the seller as uncollectible which are written off during a calendar quarter, and any discounts which may have been included in gross receipts but are not part of the taxable sales price to the purchaser.

(5) "Online hosting platform sale" means any sale facilitated through an online hosting platform, as defined in 15-68-101, MCA.

(6) "Outfitting facility" means a facility that furnishes accommodations to guests and offers hunting, fishing, or recreational services in conjunction with the services of an outfitter.

(7) "Purchaser" means a purchaser, as defined in 15-68-101, MCA.

(8) "Rental agreement" means an agreement between a seller and a purchaser. Such an agreement provides accommodations to the purchaser for a specified period of time in exchange for a specified payment amount or other consideration.

(9) "Rental vehicle sales and use tax," for the purpose of these rules, means the sales tax on the base rental charge for rental vehicles as it applies in Title 15, chapter 68, MCA.

(10) "Sale" means sale as defined in 15-68-101, MCA. In the case of online hosting platform sales, a sale for purposes of tax collection obligations occurs at the time the seller collects funds from the purchaser and does not include any transaction occurring between a seller and an online hosting platform.

(11) "Sales price" means sales price, as defined in 15-68-101, MCA.

(12) "Seller" means a seller, as defined in 15-68-101, MCA.

History

Authorizing statute(s): 15-1-201, 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-65-101, 15-68-101, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2000 MAR p. 3561, Eff. 12/22/00; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2011 MAR p. 461, Eff. 3/25/11; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.106 Registration and Permit

(1) Every seller required to collect the lodging facility sales and use tax must register with the department by filing a general business registration form available on the department's web site at mtrevenue.gov or through the department's online transaction portal, from which the department will create a lodging facility sales and use tax account identification number for each facility owned or operated in Montana.

(2) A seller who is registering multiple accommodations locations and who has elected to file a combined lodging facility sales and use tax return may file one registration listing separately each accommodations location. The combined return can only include accommodations that are located:

(a) within the same county; or

(b) within a recognized Convention and Visitors Bureau (CVB).

(3) A seller who is registering multiple accommodations locations must include the following information on each accommodations location:

(a) business name and address of each location; and

(b) the federal employer identification number or social security number assigned to the owner of each location.

(4) A seller who is registering multiple accommodations locations in more than one county or CVB is required to complete a separate application for each county or CVB and include only those accommodations locations within the county or CVB.

(5) A seller who has acquired an existing accommodation from a previous seller shall not use the predecessor's lodging facility sales and use tax account identification number. The seller must file the registration described in (1) to obtain a new lodging facility sales and use tax account identification number upon acquiring the existing business.

(6) A seller who establishes new accommodations separate from existing accommodations shall not use the existing lodging facility sales and use tax account identification number, except for those sellers listed in (2). The seller must register each accommodations separately and file the registration required in (1) to obtain a new lodging facility sales and use tax account identification number before operating the new accommodations.

(7) When completing the registration required in (1), a seller must provide the federal employer identification number assigned to them by the Internal Revenue Service. Any entity change for a seller that requires a new federal employer identification number requires a new registration.

(8) A registration is not considered complete unless it contains the seller's federal employer identification or social security number.

(9) A seller who fails to register with the department is not relieved from the collection and reporting requirements.

History

Authorizing statute(s): 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-65-114, 15-68-401, 15-68-402, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1992 MAR p. 2776, Eff. 12/25/92; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.111 Summary Report Required

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-65-102, MCA
Implementing statute(s): 15-65-121, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; REP, 2010 MAR p. 2751, Eff. 11/27/10.

Mont. Admin. R. 42.14.112 Formula

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-65-102, MCA
Implementing statute(s): Sec. 15-65-121, MCA
History: NEW, 1989 MAR p. 1529, Eff. 9/29/89; REP, 1999 MAR p. 2904, Eff. 12/17/99.

Mont. Admin. R. 42.14.113 Seasonal Registration and Permit

(1) A seller who is engaged in the business of selling accommodations to the general public and is not open for business all 12 months of a calendar year may apply for a seasonal seller's permit.

(2) A seller seeking a seasonal seller's permit must also provide in its registration, as required in ARM 42.14.106, that the business is seasonal and list the calendar months the business operates.

(3) If a seller operates at any time within the four, three-month quarters of January through March; April through June; July through September; and October through December, they cannot apply for a seasonal seller's permit.

(a) Example: A seller is operating and is open for business April 15 through October 11 of each year. This seller can apply for a seasonal seller's permit as they operate and are open for business within only three, three-month quarters (April through June; July through September, and the partial month of October.)

(b) Example: A seller is operating and is open for business March 15 through October 11 of each year. This seller cannot apply for a seasonal seller's permit as they operate and are open for business within each of the four, three-month quarters (March 15 through March 31; April through June; July through September; and October through October 11).

History

Authorizing statute(s): 15-65-102, 15-68-401, 15-68-801, MCA
Implementing statute(s): 15-65-112, 15-68-401, MCA
History: NEW, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Subchapter 42.14.2 Collection, Reporting, and Payment Requirements for the Seller

Mont. Admin. R. 42.14.202 Combined Charge for Services; Department Inspection of Records

(1) When sales of accommodations are combined with food, beverage, recreation, or other charges which are a substantial portion of the charge, the seller shall collect the lodging facility sales and use tax by establishing a sales price using one of the following options:

(a) 25 percent of all charges each day for each person; or

(b) a charge justified by reasonable documentation.

(2) As required by 15-65-113, MCA, and 15-68-502, MCA, a seller must maintain and have available for inspection, records to substantiate (1)(a) or (b) for the preceding 5 years. The department may request the seller to itemize each charge to verify the correct amount of tax was collected and paid to the department.

(3) A seller must notify a purchaser of the lodging facility use tax and the lodging facility sales tax at the time of purchase. A seller shall separately state the taxes on the receipt, invoice, or other document provided to a purchaser to ensure there is a record of the amount of tax charged.

(4) Lodging facility sales and use taxes do not apply to separately stated charges or fees unless a purchaser must pay the separately stated charge or fee to facilitate the sale or rental of the accommodations, including a fee or a service, commission, or other charge by any online hosting platform. Examples of separately stated charges not subject to the lodging facility sales and use tax include but are not limited to:

(a) telephone;

(b) Wi-Fi access;

(d) television;

(e) food;

(f) beverage;

(g) pet charge; or

(h) personal laundry charges.

(5) The department may disallow a seller's method of allocating the lodging facility sales and use tax under (1) if:

(a) the department has reasonable cause to believe that the method of allocation was chosen solely to qualify the facility for a tax exemption as provided in ARM 42.14.303; or

(b) a charge allocated under (1)(b) is not supported by reasonable documentation or itemization.

(6) Lodging facility sales and use taxes include amounts charged for bathhouse facilities or use of tangible personal property used in conjunction with the room, such as a charge for an extra bed.

(7) If campgrounds charge for water, electrical or sewer hookups, and bathhouse facilities, those charges are included in the amount that is subject to tax.

(8) If the seller charges for electricity or cleaning charges as a separate or additional charge, this charge must be included in the amount that is subject to the tax.

(9) Each seller shall maintain records necessary to document gross receipts for the lodging facility sales and use tax. A seller may be required to substantiate gross receipts reported for a particular quarter. For audit purposes, the seller may be required to provide the department access to, or copies of, data which substantiates the reported gross receipts from the original lodging facility sales and use tax receipts.

(10) Such records shall include specific electronic or physical documentation of exempt charges, including but not limited to sales generated through online hosting platforms and short-term rental marketplace. Documentation for centrally billed federal exemptions shall include the first six digits on each credit card used to pay for the accommodations. Documentation for long-term exempt accommodations may include the folio or similar documentation.

(11) The seller shall maintain the records for a period of five years and shall be subject to audit by the department for that period.

History

Authorizing statute(s): 15-1-201, 15-65-102, 15-68-801, MCA
Implementing statute(s): 2-18-501, 15-65-111, 15-65-113, 15-68-102, 15-68-502, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1992 MAR p. 2776, Eff. 12/25/92; AMD, 1998 MAR p. 182, Eff. 1/16/98; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.105, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.203 Collecting, Reporting, and Paying the Tax

(1) Every seller, except for a seller who has obtained a seasonal permit, is required to complete and file a lodging facility sales and use tax report with the department for each calendar quarter or portion of a calendar quarter they are open for business. The lodging facility sales and use tax report is available through the department's website at mtrevenue.gov or via the department's online transaction portal.

(2) A seller shall remit the amount of the tax due concurrently with filing the lodging facility sales and use tax report described in (1). The report will cover quarterly periods ending March 31, June 30, September 30, and December 31, and is due on or before the last day of the month following the close of the quarter. When filing electronically, the report and payment are considered filed on the confirmation date provided by the online transaction portal.

(3) A seller who has obtained a seasonal permit is required to complete and file a lodging facility sales and use tax report for the calendar quarters they are open for business.

(4) If a seller has no revenue to report for a calendar quarter, and the seller does not have a seasonal permit, the seller must file a lodging facility sales and use tax report but report zero revenue and zero tax due for the calendar quarter.

History

Authorizing statute(s): 15-1-201, 15-68-502,15-68-801, MCA
Implementing statute(s): 15-1-208, 15-65-112, 15-65-115, 15-68-502, 15-68-513, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1992 MAR p. 2776, Eff. 12/25/92; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.107, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2011 MAR p. 461, Eff. 3/25/11; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.204 Penalties and Interest

(1) Upon request, the late pay and late file penalty may be waived pursuant to ARM 42.2.512, 42.2.513, 42.3.101, 42.3.102, 42.3.103, 42.3.104, 42.3.106, 42.3.108, 42.3.109, 42.3.110, 42.3.111, 42.3.113, 42.3.115, and 42.3.120.

History

Authorizing statute(s): 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-1-206, 15-65-115, 15-68-514, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1991 MAR p. 2637, Eff. 12/27/91; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.108, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.14.205 Application of Tax Payment

(1) All payments of the lodging facility sales and use tax are applied by the department in the following manner:

(a) When the seller remits full payment of the taxes, one-half of the amount is applied to the lodging facility use tax in Title 15, chapter 65, MCA, and one-half of the amount is applied to the lodging facility sales tax in Title 15, chapter 68, MCA.

(b) When the seller remits less than full payment of the tax, the tax payment is first applied to the lodging facility use tax in Title 15, chapter 65, MCA, with any remaining balance being applied to the lodging facility sales tax.

(2) When a partial payment is made, the vendor allowance only applies to the paid tax balance of the lodging facility sales tax, after the payment is applied to the full amount of the lodging facility use tax due. If there are no funds available to apply to the lodging facility sales tax, the seller is not entitled to a vendor allowance.

(3) If the seller amends a prior period, or the department adjusts a prior period and the seller now owes additional tax, the original payment will be adjusted to first apply all tax to the lodging facility use tax, with any remaining balance to the lodging facility sales tax.

(4) When the department reapplies a payment, the vendor allowance will be adjusted to the timely paid amount that is applied to the lodging facility sales tax.

History

Authorizing statute(s): 15-1-201, 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-65-112, 15-68-502, 15-68-510, MCA
History: NEW, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.206 Records Required - Audit

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-65-113, 15-68-502, 15-68-513, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.109, 2010 MAR p. 2751, Eff. 11/27/10; REP, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.207 Failure to Furnish Requested Information

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-65-113, 15-65-115, 15-68-502, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD and TRANS, from ARM 42.14.110, 2010 MAR p. 2751, Eff. 11/27/10; REP, 2022 MAR p. 248, Eff. 2/12/22.

Subchapter 42.14.3 Taxable and Nontaxable Transactions for the User

Mont. Admin. R. 42.14.302 Who Must Pay the Tax

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-65-102, 15-68-801, MCA
Implementing statute(s): 2-18-501, 15-65-101, 15-65-111, 15-65-112, 15-68-101, 15-68-102, 15-68-501, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1992 MAR p. 2393, Eff. 10/30/92; AMD, 1992 MAR p. 2776, Eff. 12/25/92; AMD, 1998 MAR p. 182, Eff. 1/16/98; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.102, 2010 MAR p. 2751, Eff. 11/27/10; REP, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.303 Exempt Accommodations and Accommodations Sales

(1) The following accommodations are exempt from the lodging facility sales and use tax:

(a) An occupant at a health care facility as that term is defined in 50-5-101, MCA is not required to pay the lodging facility sales and use tax.

(b) A purchaser of accommodations at a dormitory is not required to pay the lodging facility sales and use tax when the:

(i) person is enrolled in a regular academic program or a program of continuing education; or

(ii) participant is in an education program to improve the work of the educational institution by developing the professional knowledge and skills of the employees of the institution hosting the program; or

(iii) participant is in an educational program reserved exclusively for students of accredited educational institutions.

(c) A purchaser of accommodations at a nonprofit or religious organization that is primarily used by youth (under the age of 18) for camping is not required to pay the lodging sales and use tax.

(d) The purchaser of a camping area which is temporarily located pursuant to a permit issued by an agency of the U.S. government is not required to pay the tax.

(2) The following accommodations sales are exempt from the lodging facility sales and use tax:

(a) accommodations that are rented for a period of 30 consecutive days or more. Nonconsecutive rental agreements may not be combined to calculate a longer rental period. Accommodations rental for a period of 30 or more continuous days must be documented by a lease, contract, or historical evidence of continuous rental.

(b) when the sales price is billed directly to the federal government and paid directly by the federal government. A purchaser who is individually billed and pays for accommodations, and who is subsequently reimbursed by the federal government, is not exempt from paying the lodging facility sales and use tax.

(c) when an enrolled member of a federally recognized Indian tribe stays in accommodations located within the exterior boundaries of the enrolled member's Indian reservation. The seller must record the individual's enrollment number on the record.

(d) when a foreign diplomat, entitled under international law or a bilateral treaty, presents to the seller a tax-exempt card issued by the U.S. State Department as follows:

(i) a blue stripe at the bottom indicates the bearer is entitled to full tax exemption; or

(ii) a yellow stripe indicates there is some type of restriction on the full tax exemption, which will be indicated in the yellow stripe area.

(e) when accommodations are used for a purpose other than lodging, such as a meeting room.

History

Authorizing statute(s): 15-1-201, 15-65-102, 15-68-801, MCA
Implementing statute(s): 2-18-501, 15-65-101, 15-65-111, 15-68-101, 15-68-102, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1998 MAR p. 182, Eff. 1/16/98; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2000 MAR p. 3561, Eff. 12/22/00; AMD, 2003 MAR p. 671, Eff. 4/11/03; AMD and TRANS, from ARM 42.14.103, 2010 MAR p. 2751, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.304 Exempt Lodging Sales

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-65-102, 15-68-801, MCA
Implementing statute(s): 15-65-101, 15-65-111, 15-68-101, 15-68-102, 15-68-206, MCA
History: TEMP, NEW, 1987 MAR p. 1637, Eff. 9/25/87; AMD, 1999 MAR p. 2904, Eff. 12/17/99; AMD, 2003 MAR p. 311, Eff. 2/28/03; AMD and TRANS, from ARM 42.14.104, 2010 MAR p. 2751, Eff. 11/27/10; REP, 2022 MAR p. 248, Eff. 2/12/22.

Subchapter 42.14.10 Registration and Permits

Mont. Admin. R. 42.14.1001 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-68-801, MCA
Implementing statute(s): 15-68-101, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; REP, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.1002 Registration and Permit for Rental Vehicles Sales and Use Tax

(1) Every seller required to collect the rental vehicle sales and use tax must register the business with the department by filing a general business registration form available on the department's web site at mtrevenue.gov or through the department's online transaction portal, from which the department will create a rental vehicle account identification number for each location operating in Montana.

(2) A seller who has multiple locations or businesses in Montana may file one registration listing each location or business separately.

(3) A seller who has acquired an existing location or business from a previous owner shall not use the predecessor's rental vehicle sales and use tax account identification number.

(4) A seller who establishes a new location or business separate from an existing location or business shall not use the existing rental vehicle sales and use tax account identification number. The seller must register each location or business separately, as described in (1) or (2), as applicable, to obtain a new rental vehicle sales and use tax account identification number before operating the new location or business.

(5) When completing the registration described in (1), a seller must provide the federal employer identification number assigned to them by the Internal Revenue Service. Any entity change for a seller that requires a new federal employer identification number requires a new registration.

(6) A registration described in (1) is not considered complete unless it contains the seller's federal employer identification or social security number.

(7) A seller who fails to register with the department is not relieved from the collection and reporting requirements.

History

Authorizing statute(s): 15-1-201, 15-68-801, MCA
Implementing statute(s): 15-68-401, 15-68-402, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; AMD, 2011 MAR p. 460, Eff. 3/25/11; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.1003 Seasonal Registration and Permit

(1) A seller who is engaged in the business of renting motor vehicles to the general public and is not open for business all 12 months of a calendar year may apply for a seasonal seller's permit.

(2) A seller must indicate in its business registration, as required in ARM 42.14.1002, that the business is seasonal and list the calendar months the business operates.

(3) If the seller operates at any time within each of the four, three-month quarters of January through March; April through June; July through September; and October through December, they cannot apply for a seasonal seller's permit.

(a) For example: A seller is operating and opened for business April 15 through October 11 of each year. This seller can apply for a seasonal seller's permit as they operate and are opened for business within only three, three-month quarters (April through June; July through September, and the partial month of October.)

(b) A seller is operating and opened for business March 15 through October 11 of each year. This seller cannot apply for a seasonal seller's permit as they operate and are opened for business within each of the four, three-month quarters (March 15 through March 31, April through June; July through September; and October through October 11.)

History

Authorizing statute(s): 15-68-401, 15-68-801, MCA
Implementing statute(s): 15-68-401, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Subchapter 42.14.11 Collection, Reporting, and Payment Requirements for the Seller

Mont. Admin. R. 42.14.1101 Who Must Collect the Tax from the User and File Returns

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-68-801, MCA
Implementing statute(s): 15-68-101, 15-68-102, 15-68-501, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; REP, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.1102 Quarterly Returns and Payments

(1) Every seller, except for a seller identified in (2), is required to complete and file with the department a rental vehicle sales and use tax return for each calendar quarter or portion of a calendar quarter the seller is open for business. The rental vehicle sales and use tax return is available through the department's website at mtrevenue.gov or via the department's online transaction portal. A seller shall remit the amount of the tax due concurrently with the rental vehicle sales and use tax return, as required in (1), on or before the last day of the month following the close of a calendar quarter. When filing electronically, the report and payment are considered filed on the confirmation date provided by the online transaction portal.

(2) A seller who has obtained a seasonal permit under ARM 42.14.1003 is required to comply with the requirements of (1) only for the calendar quarters they are open for business.

(3) If a seller has no revenue to report for a calendar quarter, and the seller does not have a seasonal permit, the seller must still comply with the requirements of (1) and (2) but report zero revenue and zero tax due for the quarter.

History

Authorizing statute(s): 15-1-201, 15-68-502, 15-68-801, MCA
Implementing statute(s): 15-68-502, 15-68-513, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; AMD, 2011 MAR p. 460, Eff. 3/25/11; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.1103 Combined Tax Return

(1) A seller doing business in multiple locations may elect to file a combined tax return (Form RVT-C) separately stating each location's gross sales, exemptions, and tax.

(2) Prior to filing a combined return, the seller must request in writing this election to the department. This request must include the complete name, address, and permit number of each location that will be included in the combined return.

(3) Upon authorization by the department, the seller can proceed with filing a combined return.

(4) Once the seller elects to file a combined return and has received authorization from the department, the seller cannot elect to file separate returns for each business location in the future without receiving prior approval from the department.

(5) If a location has no revenue to report for a quarter, the seller must include the location in the combined return reporting zero revenue and tax for the quarter.

(6) The seller must identify quarterly a new location that is included in the return.

(7) The seller must identify quarterly which location is no longer included in the combined return.

History

Authorizing statute(s): 15-68-801, MCA
Implementing statute(s): 15-68-502, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10.

Mont. Admin. R. 42.14.1104 Failure to Furnish Requested Information

(1) The department, for the purpose of determining the correctness of any return, may request additional information to verify amounts or items on the return.

(2) If a return is not filed or information is not supplied, the department will estimate the tax from available information.

History

Authorizing statute(s): 15-68-801, MCA
Implementing statute(s): 5-68-502, 15-68-520, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10.

Mont. Admin. R. 42.14.1105 Records Required - Audit

(1) A seller shall maintain records necessary to document gross receipts for the rental vehicle sales and use tax. A seller may be required to substantiate gross receipts reported for a particular quarter. For audit purposes, a seller may be required to reconstruct the reported gross receipts from the original rental vehicle sales and use tax receipts.

(2) The records described in (1) must include specific documentation of exempt charges.

(3) A seller must notify a purchaser of the rental vehicle sales and use tax at the time of purchase.

(4) The tax shall be separately stated on the receipt, invoice, or other document provided to a purchaser to ensure there is a record of the amount of tax charged.

(5) The records described in (1) must be maintained by a seller for a period of five years and shall be subject to audit by the department.

History

Authorizing statute(s): 15-68-801, MCA
Implementing statute(s): 15-68-502, 15-68-513, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.1106 Penalties and Interest

(1) Upon request, the late pay or late file penalties may be waived pursuant to ARM 42.3.101 through 42.3.111, 42.3.113, 42.3.115, and 42.3.120.

History

Authorizing statute(s): 15-68-801, MCA
Implementing statute(s): 15-1-206, 15-68-514, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10.

Subchapter 42.14.12 Taxable and Nontaxable Transactions for the User

Mont. Admin. R. 42.14.1201 Rental Vehicles Sales Subject to the Tax

(1) A purchaser is required to pay the rental vehicle sales and use tax on the sales price for a rental vehicle rented in Montana. This includes, but is not limited to:

(a) automobiles, including vans, sport utility vehicles, or trucks have a capacity of one ton or less;

(b) motorcycles;

(d) quadricycles, including a four-wheeled motor vehicle designed for on-road or off-road use, that has a motor that produces 50 horsepower or less;

(e) motorboats, including a canoe, kayak, personal watercraft, rubber raft or pontoon, propelled by any motor or engine of any description;

(f) sailboats, including any vessel that uses a sail and wind as its primary source of propulsion;

(g) off-highway vehicles, including motorcycles, modified motorcycles including but not limited to those that attach skis or snowmobile tracks, quadricycles, dune buggies, amphibious vehicles, deriving power from any source other than muscle or wind; or

(h) a truck, trailer, or semi-trailer that has a gross vehicle weight of less than 22,000 pounds, used to transport personal property, such as a flatbed trailer used to transport machinery.

History

Authorizing statute(s): 15-1-201, 15-68-801, MCA
Implementing statute(s): 15-68-101, 15-68-102, 15-68-501, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Mont. Admin. R. 42.14.1202 Exempt Rental Vehicle Sales

(1) A purchaser is not required to pay the rental vehicle sales and use tax on the rental of farm vehicles, machinery, equipment, travel trailers, motor homes, airplanes, snowmobiles, golf carts, or sailboards.

(2) The following rental vehicle sales are exempt from the rental vehicle sales and use tax:

(a) a vehicle that is rented to the same user for a period of 30 consecutive days or more. Nonconsecutive rental agreements cannot be combined for the purpose of determining the length of the rental period. Intention to rent for a period of 30 or more continuous days is documented by a lease, contract, or historical evidence of continuous rental.

(b) when the rental charge is billed directly to the federal government and paid directly by the federal government. A charge that is individually billed and paid by the user, who later is reimbursed by the federal government, is not exempt from the rental vehicle sales and use tax.

(c) when an enrolled member of a federally recognized Indian tribe rents a vehicle within the exterior boundaries of the enrolled member's Indian reservation. The seller must record the individual's enrollment number on the record.

(d) when a foreign diplomat, entitled under international law or a bilateral treaty presents to the seller a tax-exempt card issued by the U.S. State Department as follows:

(i) a blue stripe at the bottom indicates the bearer is entitled to full tax exemption; or

(ii) a yellow stripe indicates there is some type of restriction on the full tax exemption, which will be indicated in the yellow stripe area.

History

Authorizing statute(s): 15-1-201, 15-68-801, MCA
Implementing statute(s): 15-68-101, 15-68-102, MCA
History: NEW, 2010 MAR p. 2755, Eff. 11/27/10; AMD, 2022 MAR p. 248, Eff. 2/12/22.

Chapter 42.15 Income Tax

(2) "Permanent place of abode" means a dwelling place habitually used by an individual as the individual's home, whether or not owned by the individual or a dwelling the individual may someday leave.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13.

Mont. Admin. R. 42.15.108 Determining Tax Liability

(1) A person required to file a Montana Individual Income Tax Return must determine their Montana income tax liability in accordance with the applicable Montana statutes and administrative rules. All income, except income specifically exempted in Title 15, chapter 30, MCA, or these rules, is included in determining income subject to Montana income tax.

(2) The administrative rules applicable to determining who must file a Montana Individual Income Tax Return, are located in ARM Title 42, chapter 15, subchapter 3.

(a) Rules that apply to enrolled tribal members are located in ARM Title 42, chapter 15, subchapter 1.

(b) Rules that apply to certain wages and other income of resident and nonresident military servicemembers and the spouses of nonresident military servicemembers are located in ARM Title 42, chapter 15, subchapter 15.

(3) The starting point for computing Montana individual income tax liability is a taxpayer's federal taxable income, excluding the qualified business income deduction under IRC section 199A. If a taxpayer is not required to file a federal income tax return for a tax year, but is still required to file a Montana tax return as outlined in 15-30-2602(1)(b), MCA, and ARM 42.15.301, the taxpayer shall compute federal taxable income and complete the applicable federal schedules. The federal computations and tax schedules required by this rule are tax records that the taxpayer must include with their Montana income tax return.

(4) Federal taxable income is adjusted for Montana additions and subtractions to arrive at Montana taxable income. The subtractions reduce the amount of income subject to tax for all taxpayers.

(5) The adjustments to taxable income for which additional rules are provided include:

(a) nonqualified withdrawals from medical savings accounts located in ARM Title 42, chapter 15, subchapter 6;

(b) nonqualified withdrawals from first-time home buyer accounts located in ARM Title 42, chapter 15, subchapter 9;

(d) contributions to, and earnings on, family education savings accounts located in ARM Title 42, chapter 15, subchapter 8;

(e) earnings on first-time home buyer savings accounts located in ARM Title 42, chapter 15, subchapter 9; and

(f) military retirement income located in ARM Title 42, chapter 15, subchapter 15.

(6) The tax rates provided in 15-30-2103, MCA, are applied to Montana taxable income. Tax brackets are adjusted annually for inflation. The Montana tax liability of a nonresident or part-year resident is determined by the process and requirements outlined in ARM 42.15.110 and 42.15.125.

(7) Rules describing credits that may be taken against income tax liability are located in ARM Title 42, chapter 4.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, 15-30-2102, 15-30-2103, 15-30-2104, 15-30-2114, 15-30-2131, 15-30-2153, 15-30-2602, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2016 MAR p. 22, Eff. 1/9/16; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.109 Residency

(1) As provided in 15-30-2101, MCA, an individual may be a resident for Montana individual income tax purposes if the individual is domiciled in the state or maintains a permanent place of abode in the state. Section 1-1-215, MCA, sets forth rules for determining residency, and "domiciled" is defined in ARM 42.2.304. Whether an individual is a Montana resident for Montana income tax purposes is determined in light of all facts and circumstances.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.110 Taxation of Part-Year Residents and Nonresidents

(1) Part-year residents and nonresidents are subject to the same filing requirements as residents unless otherwise expressly exempted in statute.

(2) Part-year residents and nonresidents must include all Montana source income on Form 2, Schedule II - Tax on Montana Source Income. Montana source income is defined in 15-30-2101, MCA.

(3) Part-year residents and nonresidents compute their tax liability by multiplying the ratio of their Montana source income to everywhere income from all sources by the tax determined as if they were a resident for the entire tax year. Completing Schedule II - Tax on Montana Source Income determines this ratio.

(4) A married couple comprised of one resident and one nonresident or part-year resident, filing jointly, must complete the Schedule II - Tax on Montana Source Income to compute the ratio of Montana income to everywhere income.

(a) The ratio's numerator is everywhere income for the resident spouse and Montana source income for the nonresident or part-year resident spouse.

(b) The ratio's denominator is everywhere income for both spouses.

(c) If the income for either spouse includes capital gains that are subject to tax under 15-30-2103(2), MCA, the couple must complete the net long-term gains portion of the schedule to determine the ratio in (4). The numerator is then all net long-term capital gains for the resident spouse and Montana source net long-term capital gains for the nonresident or part-year resident spouse. The ratio's denominator is all net long-term capital gains for the married couple.

(5) A married couple filing under the terms of (4) is entitled to the credit for taxes paid to another state or country under 15-30-2302, MCA, only on income sourced to Montana based on residency which is subject to income tax in another state or country.

History

Authorizing statute(s): 15-30-2104, MCA
Implementing statute(s): 15-30-2101, 15-30-2103, 15-30-2104, 15-30-2120, 15-30-2131, 15-30-2132, 15-30-2151, 15-30-2153, 15-30-2154, MCA
History: NEW, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2014 MAR p. 2976, Eff. 12/12/14; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.119 Alternative Tax

(1) A nonresident taxpayer whose only activities in Montana consist of making sales and do not include owning or renting real or tangible personal property and whose dollar volume of gross sales made in Montana during the taxable year does not exceed $100,000, may elect to pay a tax of one-half percent on the gross volume of sales made in Montana during the taxable year. Such tax is in lieu of the tax based upon net income as described in 15-30-2103 and 15-30-2104(1)(a), MCA.

(2) The election to pay the alternative tax is made by filing Form 2 and including Form DE, reporting the dollar amount of Montana gross sales, and paying a tax determined on the basis of one-half percent of the amount of such sales. The gross volume of sales made in Montana must be determined according to the provisions of paragraphs 16 and 17 of Article IV of the Multistate Tax Compact. A statement must be attached to the return to the effect that the taxpayer's only activities in Montana consist of making sales and do not include owning or renting real property or tangible personal property.

History

Authorizing statute(s): 15-30-2104, 15-30-2620, MCA
Implementing statute(s): 15-30-2104, MCA
History: Eff. 12/31/72; AMD, Eff. 11/3/75; TRANS, from ARM 42.16.1101, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.120 Apportionable and Nonapportionable Income - Apportionment or Allocation - Individuals, Estates, and Trusts

(1) For purposes of the reporting requirements for individuals, trusts, and estates that have Montana apportionable or nonapportionable income and determining their Montana tax liability, the following rules contained in ARM Title 42, chapter 26 - Corporate Multistate Activities subchapters are cross referenced for guidance and applicability:

(a) 1 - General Provisions;

(b) 2 - Income Allocation and Apportionment, except ARM 42.26.204, 42.26.228, 42.26.229, and 42.26.260;

(d) 6 - Railroads;

(e) 7 - Trucking;

(f) 8 - Airlines;

(g) 9 - Special Rules for Construction Contracts;

(h) 10 - Publishing Companies - Apportionment;

(i) 11 - Television and Radio Broadcasting;

(j) 12 - Telecommunication Services for Corporate Income Taxes; and

(k) 13 - Financial Institutions.

(2) The taxpayer may petition for, or the department may require, an alternative method of reporting activity in the state as provided in 15-1-601, MCA.

(3) When applying the rules referred to in (1), the terms "individual," "trust," or "estate" replace the term "corporation," and the provisions of Title 15, chapter 30, MCA, replace references to Title 15, chapter 31, MCA.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-601, 15-30-2120, MCA
History: NEW, 1982 MAR p. 2102, Eff. 11/25/82; AMD, 2002 MAR p. 3708, Eff. 12/27/02; TRANS, from ARM 42.16.1201, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2011 MAR p. 2679, Eff. 12/9/11; AMD, 2018 MAR p. 854, Eff. 4/28/18; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.125 Net Long-Term Capital Gains-Calculation of Tax for Part-Year Residents and Nonresidents

(1) The tax on net long-term capital gains recognized by nonresidents equals the tax on them, calculated under 15-30-2103(2), MCA, multiplied by the ratio of net long-term capital gains sourced to Montana under 15-30-2104, MCA, to the total net long-term capital gains from all sources.

(2) When net long-term capital gains are recognized by a nonresident taxpayer, the amounts of net long-term capital gains must be excluded from the numerator and the denominator of the ratio provided under 15-30-2104, MCA, to calculate the tax under 15-30-2103(2), MCA.

(3) Informational examples regarding net long-term capital gains administered under this rule are as follows:

(a) Married nonresident taxpayers filing jointly in 2024 recognize a net taxable loss of ($100,000) and a net long-term capital gain of $50,000 which is sourced to Montana. Even though the Montana source income is positive, their tax liability is zero because the total taxable income is zero and 15-30-2103(1), MCA, does not create a separate tax on net long-term capital gains.

(b) Assuming the same taxpayers as in (a), except that they recognize a net taxable income of $71,000, comprised of $21,000 in ordinary income and $50,000 in net long-term capital gains. The first tax rate applied is the tax on ordinary income which is 4.7 percent. The lower capital gains rate under 15-30-2103(2), MCA, is applied to the first $20,000 of capital gains with the remaining $30,000 subject to the upper rate.

(c) Assuming the same taxpayers as in (a) and (b) except income is $40,000 of the net long-term capital gains sourced to Montana, $7,000 of the nonqualified taxable income sourced to Montana and the ratio of Montana net long-term capital gains to capital gains from all sources is 0.80. The nonresident tax under 15-30-2103(2), MCA, equals $1,464 [$1,830 x 0.8]. The nonresident ratio applied against the tax on the remaining nonqualified income is one-third. The nonresident tax on nonqualified taxable income is $329 [($21k x 0.047) x 0.333]. The total tax for the nonresident is $1,793.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2103, 15-30-2104, MCA
History: NEW, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Subchapter 42.15.2 Montana Additions and Subtractions

Mont. Admin. R. 42.15.201 Accounting Periods

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-101, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 10, Eff. 1/15/82; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.202 Taxable Year Defined

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-101, MCA
History: Eff. 12/31/72; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Mont. Admin. R. 42.15.203 Years Defined

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-101, MCA
History: Eff. 12/31/72; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Mont. Admin. R. 42.15.204 Definitions

The following definitions apply to this subchapter:

(1) "Obligation" means, for the purposes of determining the applicability of the exclusion of interest income, an interest-bearing financial instrument of the United States government, a state, or a political subdivision, in the form of a bond, other written certificate, or loan issued pursuant to the exercise of such governmental body's borrowing power for use in governmental operations.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2120, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.205 Refunds of Federal Income Tax (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, 15-30-2131, MCA
History: NEW, 2007 MAR p. 485, Eff. 4/13/07; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.206 Additions and Subtractions for Married Taxpayers Filing Separate Returns (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.212 Paid and Received Defined

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-101, MCA
History: Eff. 12/31/72; REP, 2002 MAR. p. 3708, Eff. 12/27/02.

Mont. Admin. R. 42.15.213 Small Business Corporation Dividend and Capital Gain Exclusion (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-33-105, MCA
Implementing statute(s): 15-33-106, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.215 Senior Interest Income Exclusion (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD and TRANS, from ARM 42.15.113, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2009 MAR p. 353, Eff. 3/27/09; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.216 Exclusion of Interest on Obligations

(1) Interest on United States government obligations, as defined in ARM 42.15.204, and mutual fund dividends attributable to that interest, to the extent included in federal taxable income, are exempt from Montana income tax. Interest on obligations of U.S. territories and government agency obligations specifically exempted by federal law, and mutual fund dividends attributable to that interest, are also exempt from Montana income tax.

(2) United States obligations that are exempt include:

(a) series E, EE, F, G, H, and HH savings bonds;

(b) U.S. treasury bills;

(d) U.S. government certificates.

(3) Interest received from guarantees that do not conform to the definition in ARM 42.15.204, or obligations guaranteed by the United States government including mutual fund dividends attributable to Government National Mortgage Association (Ginnie Mae) bonds, Federal National Mortgage Association (Fannie Mae) bonds, and Federal Home Loan Mortgage Corporation (FHLMC) securities, are not tax-exempt.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2120, MCA
History: NEW, 1984 MAR p. 2034, Eff. 12/28/84; AMD and TRANS, from ARM 42.15.114, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.217 Disability Income Exclusion (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 1985 MAR p. 1771, Eff. 11/15/85; AMD and TRANS, from ARM 42.15.115, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.218 Capital Gain Exclusion for Pre-1987 Sales (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, 15-30-2111, MCA
History: NEW, 1987 MAR p. 1640, Eff. 9/25/87; AMD and TRANS, from ARM 42.15.117, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.219 Pension and Annuity Income Exclusion (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 1987 MAR p. 1801, Eff. 10/16/87; AMD, 1992 MAR p. 2777, Eff. 12/25/92; AMD and TRANS, from ARM 42.15.118, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2016 MAR p. 2072, Eff. 11/11/16; AMD, 2018 MAR p. 851, Eff. 4/28/18; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.220 Exemption of Certain Income of Enrolled Tribal Members

(1) Wages are exempt from individual income tax when:

(a) the individual is an enrolled tribal member of the governing tribe of the reservation on which the enrolled tribal member works and resides; and

(b) the wages are derived from reservation sources.

(2) When wages are derived from both reservation sources and nonreservation sources, only wages derived from reservation sources are exempt from taxation, provided the individual meets all the criteria in (1).

(3) When a Native American does not reside on his or her reservation for an entire year, only wages earned while he or she was residing on the reservation are exempt from taxation, provided he or she meets all the criteria in (1).

(4) A Native American residing outside the boundaries of his or her reservation has no special exemption other than income derived directly from allotted or restricted lands, held in trust by the United States.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, 15-30-2120, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, Eff. 7/5/75; AMD, Eff. 11/3/75; AMD, 1982 MAR p. 11, Eff. 1/15/82; AMD, 1993 MAR p. 1674, Eff. 7/30/93; AMD and TRANS, from ARM 42.15.121, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.221 Dependent Child Unearned Income Exclusion (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 1985 MAR p. 1633, Eff. 11/1/85; AMD, 1994 MAR p. 1720, Eff. 6/24/94; AMD and TRANS, from ARM 42.15.308, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.222 Railroad Retirement and Social Security Benefit Exclusion (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, MCA
History: NEW, 1985 MAR p. 1916, Eff. 12/13/85; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD and TRANS, from ARM 42.15.309, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.223 Deductions for Sale of Land to a Beginning Farmer

(1) A deduction from federal taxable income is allowed for each sale of 80 acres or more if approved by the agricultural loan authority. The deduction is the amount which would have to be included in federal taxable income as ordinary income and the taxable portion of capital gains resulting from the sale, up to a maximum deduction of $50,000. The deduction will be taken each year a payment is received until the loan is repaid or the deductions for all years equal $50,000.

(2) The taxpayer may claim more than one deduction as a result of sales to beginning farmers provided each sale is approved by the agricultural loan authority.

(3) To the extent that a net operating loss is created as a result of this deduction, such loss shall not be available for carryover or carryback provisions.

(4) Individuals in a partnership that makes an approved sale are also allowed this deduction. The partners' distributive shares of profit may be reduced by the amount of the allowable deductions. However, in no case shall the total deduction for all partners exceed $50,000 for each sale. Shareholders of an electing small business corporation are not allowed a deduction on their individual tax returns for approved sales made by the corporation. The deduction must be taken by the corporation.

(5) For tax deduction purposes, a copy of the approval of the transaction by the agricultural loan authority must be attached to the return claiming the deduction. The department may also require additional documentation on request to establish the eligibility of the transaction for a tax deduction.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 80-12-211, MCA
History: NEW, 1984 MAR p. 391, Eff. 3/1/84; TRANS and AMD, from 42.15.415, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Subchapter 42.15.3 Tax Returns

Mont. Admin. R. 42.15.301 Who Must File Returns

(1) The following persons must file an individual income tax return:

(a) every resident who is required to file a federal income tax return;

(b) every nonresident with Montana source income, including net losses, who is:

(i) not eligible for the nonresident exclusion for temporary workers provided in 15-30-2106, MCA; or

(ii) from a pass-through entity and the nonresident's share of the income is not included in a return filed under either 15-30-3312 or 15-30-3326, MCA;

(c) an individual claiming an adjustment to federal taxable income if it results in Montana taxable income, as provided in 15-30-2602(1)(b), MCA; or

(d) a Montana medical savings account holder who is a resident and required to report under ARM 42.15.602(3).

(2) An individual not required to file a federal income tax return will still need to file a Montana individual income tax return in the following situations:

(a) they are claiming a refundable tax credit such as the Montana earned income tax credit or adoption credit; or

(b) they are requesting a withholding refund for overpaid withholding on Montana wages, withholding on wages earned by a nonresident military spouse, withholding on wages earned under the North Dakota reciprocity agreement, or mineral royalty withholding for an individual without a federal filing requirement.

(3) The following persons must file a fiduciary return:

(a) the estate of a decedent who was a resident must file a return if its gross income for the year from all sources exceeds its federal exemption allowance;

(b) the estate of a decedent who was a nonresident must file a return if its gross income from all sources exceeds its federal exemption allowance, and the estate has any Montana source income; and

(c) a nonbusiness trust which is not a grantor trust and is subject to the Montana Trust Code, Title 72, chapter 33, MCA, must file a return if its gross income for the year from all sources exceeds its exemption allowance.

(4) A nonresident's distributive share of a pass-through entity's Montana source income is included in determining a nonresident's obligation to file a Montana individual income tax return. A nonresident whose only Montana source income for the tax year is from one or more partnerships or S corporations, each of which has elected to file a composite return and pay a composite tax on behalf of consenting participants, is not required to file an individual income tax return. A nonresident who has Montana source income from a partnership or S corporation who does not elect to file a composite return or who has any other Montana source income (for example, wages from employment in Montana or rental income from property located in Montana), is required to file a Montana individual income tax return if the gross income from all sources, adjusted as provided in this rule, exceeds the applicable limit.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 15-31-501, MCA
Implementing statute(s): 15-30-2602, 15-30-2603, 15-30-3302, 15-30-3311, 15-30-3312, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2014 MAR p. 2976, Eff. 12/12/14; AMD, 2016 MAR p. 22, Eff. 1/9/16; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.302 Filing Date on Holiday or Weekend

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-144, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 10, Eff. 1/15/82; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Mont. Admin. R. 42.15.303 Filing Individual Income Tax Returns Using a Designee

(1) A taxpayer who is unable to file their individual income tax return may have the return filed by a designated agent. For purposes of this rule, a designated agent is a person designated by the taxpayer under a power of attorney, or in the case of a minor, incapacitated person, or decedent, a parent, guardian, or other court-designated person charged with the taxpayer's financial matters.

(2) An individual income tax return must be filed for a decedent taxpayer covering the period from the beginning of the taxable year to the date of death.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2602, MCA
History: Eff. 12/31/72; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.304 Partnership Return

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-133, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 11, Eff. 1/15/82; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Mont. Admin. R. 42.15.305 Trust and Estate Returns

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-135, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, Eff. 11/3/75; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1983 MAR p. 1265, Eff. 9/16/83; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 1996 MAR p. 2605, Eff. 10/4/96; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.306 Sub "s" Corporation and Partnership Losses

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-133 and 15-31-101, MCA
History: NEW, 1983 MAR p. 1358, Eff. 9/30/83; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Mont. Admin. R. 42.15.310 Definitions

The following definitions apply to rules found in this subchapter:

(1) "Injured spouse" means a taxpayer who does not owe a child support obligation, but who has reported income on a joint return with a taxpayer who does owe a past due child support obligation.

(2) "Innocent spouse relief applicant" means a taxpayer who has filed joint federal and Montana tax returns for the same tax year, has obtained relief from a joint and several federal tax liability under section 6015 of the IRC, and is requesting relief from a joint and several Montana income tax liability.

(3) "Obligated spouse" means a taxpayer who is liable for a past due child support obligation.

History

Authorizing statute(s): 15-30-2104, 15-30-2620, 17-4-110, MCA
Implementing statute(s): 15-30-2602, 17-4-105, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10.

Mont. Admin. R. 42.15.312 Acceptance of Reproduced Tax Forms (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2604, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.313 Federal Returns

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-304, MCA
History: Eff. 12/31/72; AMD, Eff. 11/3/75; AMD, 1996 MAR p. 2605, Eff. 10/4/96; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.314 Changes in Federal Taxable Income

(1) When a taxpayer's federal taxable income is changed or corrected by the IRS, or other authority, the taxpayer must file an amended return within 180 days after the final determination date.

(2) When a taxpayer changes his or her own federal taxable income by amending his or her federal income tax return, the taxpayer must file an amended return reporting these changes within 180 days after filing the federal amended tax return.

(3) Interest and penalty are assessed on any unpaid tax under the original return from the prescribed due date of the original return until the department receives payment.

History

Authorizing statute(s): 15-30-2620, 15-30-3404, MCA
Implementing statute(s): 15-1-216, 15-30-2605, 15-30-2606, 15-30-2619, 15-30-3403, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, Eff. 11/3/75; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD, 2004, MAR p. 3147, Eff. 12/17/04; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2015 MAR p. 763, Eff. 6/12/15; AMD, 2022 MAR p. 1763, Eff. 9/10/22.

Mont. Admin. R. 42.15.315 Original and Amended Returns

(1) An original return is due on the prescribed filing date, as described in 15-30-2604, MCA, and ARM 42.15.319. The date prescribed for filing is the original return's due date, excluding extensions.

(2) An original return is the Montana Form 2.

(3) An amended return is not an original return but only a correction to an original return.

(4) The department will not accept an amended return if an original return has not been filed.

(5) Interest, late filing, and late payment penalties are assessed as required under 15-1-216, MCA, on the amount due reported on the original return.

(6) Interest, late filing, and late payment penalties are calculated from the due date in (1), and adjusted based on the corrected amount of tax due, which results from an amended return, adjustment from an audit, or correction to the original return.

(7) Taxes are due on the prescribed filing date. When an original return is filed after the prescribed date, but before the extended due date and payment is not made, the tax due is subject to interest and the late payment penalty.

(8) The department may not issue a credit or refund of an overpayment of taxes shown on a return if:

(a) the return is filed more than one year after the expiration of a suspension of the federal statute of limitations for the collection of federal income tax;

(b) the return is filed more than three years after the prescribed filing date;

(c) for tax years beginning after December 31, 2016, the original return is filed more than three years after the date prescribed for filing and one year after an overpayment is made; or

(d) the return is filed more than 40 months and 15 days after the last month of the tax year that a net operating loss occurred within the limitations provided in 15-30-2609(2)(b), MCA.

(9) When an original return is filed after the extended due date, and the department does not issue the requested refund within 45 days of receiving the return, interest as allowed under 15-30-2609, MCA, is payable from the date the return was filed. For example, an original return for tax year 20X1 requesting a refund is filed November 12, 20X2, and the department does not issue the refund until January 30, 20X3. Refund interest is payable from the date the return was filed (November 12, 20X2) until the date the refund was issued (January 30, 20X3).

(10) The department may not pay interest on a refund under 15-30-2609, MCA, if the refund is:

(a) issued 45 days before the latter of:

(i) the prescribed filing date in (1); or

(ii) when the return was filed;

(b) as a result of a federal net operating loss carryback;

(d) not the result of an actual tax liability; or

(e) from an amount by a taxpayer in which no items of Montana source income or loss were reported for the period.

(11) If the department sends a request for information to a taxpayer regarding a pending refund, the taxpayer must respond or request additional time within 30 days of the date of the request.

(a) If the taxpayer responds to the request from the department, interest will accrue from the date prescribed under 15-30-2609, MCA.

(b) If the taxpayer responds to the request after 30 days absent an agreement with the department for additional response time, interest will not accrue from the date of the request until the requested information is received by the department.

(c) If the taxpayer fails to respond to the request, the department may deny the refund request and issue an adjustment letter which explains the denial, as provided in ARM 42.2.510.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-216, 15-30-2512, 15-30-2602, 15-30-2609, MCA
History: NEW, 1988 MAR p. 2745, Eff. 12/23/88; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD, 2002 MAR p. 1096, Eff. 4/12/02; AMD, 2005 MAR p. 1592, Eff. 12/17/04; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2010 MAR p. 3026, Eff. 12/24/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2016 MAR p. 2073, Eff. 11/11/16; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.316 Extensions and Estimated Payments

(1) A taxpayer's tax liability and percent threshold of payment are determined as provided in ARM Title 42, chapter 17, subchapter 3.

(2) If a taxpayer does not meet either of the required payment thresholds as required by 15-30-2604, MCA, late pay and late filing penalties will be applied as provided in 15-1-216, MCA.

(3) Underpayment interest, as provided in 15-30-2512, MCA, accrues to the original due date of the return. Interest from and after the original due date of the return accrues as provided in 15-1-216, MCA, whether or not the time for filing the return has been extended.

(4) The underpayment is calculated as provided in ARM Title 42, chapter 17, subchapter 3.

(5) A six-month extension of time to file an individual income tax return is automatically allowed a taxpayer if the tax, penalty, and interest are paid when the return is filed.

(6) Taxpayers who are either first time filers, or have a zero or negative taxable income for the previous year, are considered to have paid 100 percent of the previous year's tax for purposes of meeting the threshold requirements in 15-30-2604, MCA.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-201, 15-1-216, 15-30-2604, 15-30-2609, 15-30-2651, MCA
History: NEW, 1992 MAR p. 145, Eff. 1/31/92; AMD, 1995 MAR p. 2507, Eff. 11/23/95; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2016 MAR p. 2073, Eff. 11/11/16; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.317 Filing Date

(1) In lieu of other evidence, a postmark issued by the United States Postal Service is considered the date of filing. To be timely, paper filings must be postmarked on or before the due date.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2507, 15-30-2604, 39-71-2503, MCA
History: NEW, 1996 MAR p. 1169, Eff. 4/26/96; TRANS, from ARM 42.5.210, 2003 MAR p. 2897, Eff. 12/25/03; AMD, 210 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.318 Montana Net Operating Losses (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2119, MCA
History: NEW, 1985 MAR p. 2015, Eff. 12/27/85; AMD, 1988 MAR p. 2745, Eff. 12/23/88; AMD, 1992 MAR p. 1245, Eff. 6/12/92; AMD, 1992 MAR p. 2556, Eff. 11/26/92; AMD and TRANS, from ARM 42.15.116, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2018 MAR p. 851, Eff. 4/28/18; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.319 Date and Place of Filing and Payment

(1) The due date for filing an individual income tax return and payment of the tax due is the 15th day of the fourth month following close of the tax year.

(2) A return may be filed by personal delivery, mail, and electronically.

(a) If a return is mailed as provided in this rule, on or before the due date, and received by the department, the return is considered filed on the date mailed. A taxpayer is responsible for establishing the date a return is mailed.

(b) The rules for filing a return electronically are located in ARM Title 42, chapter 5, subchapter 2.

(3) Every taxpayer must compute their tax liability and pay the balance of any tax due in full on or before the prescribed due date, as stated in 15-30-2602, MCA. If the balance due is less than $1, payment is not required. If full payment of the balance due is not made on or before the prescribed due date, interest and late payment penalty accrue from the prescribed due date of the return until paid, as provided in 15-1-216, MCA.

(a) If tax is paid by check or money order, the check or money order should be made payable to the "Montana Department of Revenue."

(b) The rules for paying a tax electronically are located in ARM Title 42, chapter 5, subchapter 2.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2602, 15-30-2604, MCA
History: NEW, Eff. 12/31/72; AMD, 1982 MAR p. 14, Eff. 1/15/82; AMD and TRANS, from ARM 42.16.101, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.320 Deficiency Notices and Payments

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2602, 15-30-2604, MCA
History: NEW, Eff. 12/31/72; AMD, 1982 MAR p. 14, Eff. 1/15/82; AMD and TRANS, from ARM 42.16.102, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.15.321 Joint Returns (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2602, MCA
History: Eff. 12/31/72; AMD, 1980 MAR p. 2927, Eff. 11/15/80; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.322 Separate Returns for Married Taxpayers (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, 15-30-2602, MCA
History: Eff. 12/31/72; AMD, Eff. 3/7/74; AMD, Eff. 4/5/74; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 1996 MAR p. 2605, Eff. 10/4/96; AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2008 MAR p. 178, Eff. 2/1/08; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.323 Voluntary Refund Checkoff for Nongame Wildlife Fund

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-150, MCA
History: NEW, 1983 MAR p. 1744, Eff. 11/26/83; REP, 1985 MAR p. 1634, Eff. 11/1/85.

Mont. Admin. R. 42.15.325 Failure to Furnish Requested Information or File a Delinquent Return

(1) A taxpayer must provide information the department requests to ascertain the correctness of a return within 30 days after the date of the request or obtain the department's consent to provide the information at a later date. If the taxpayer does not provide this information within 30 days, or as agreed upon, the department will adjust or disallow any amount or item that remains unverified. If the request is in writing, the 30 days are computed from the date of the written request.

(2) If a taxpayer does not file a delinquent return within 30 days after the date of a written request to file the return or obtain the department's consent to file the return at a later date, the department will estimate the taxpayer's taxable income.

(3) Failure to supply the information requested or to file a requested return will result in the assessment of tax and the assessment of interest and penalty as provided in 15-1-216 , MCA.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2605, MCA
History: NEW, 1984 MAR p. 2033, Eff. 12/28/84; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10.

Mont. Admin. R. 42.15.326 Request for Adjustment of Joint Return

(1) A taxpayer may request the department to adjust a joint tax return that was filed in the circumstance where the refund is being offset by the department for a child support arrearage.

(2) The adjustment will reflect the dollar amount of the refund that is attributable to the "obligated spouse," and the part of the refund that is attributable to the "injured spouse." The amount attributable to the injured spouse will be deemed exempt from offset.

(3) This request must be made in writing, and must be made within 30 days after the Notice of Offset and Opportunity for Hearing is mailed to the taxpayer.

(4) The provisions of this rule do not apply to a taxpayer requesting innocent spouse relief as provided under 15-30-2646, MCA. The rules for innocent spouse relief are located in ARM 42.15.329.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 17-4-110, MCA
Implementing statute(s): 15-1-211, 15-30-2602, 17-4-105, MCA
History: NEW, 1986 MAR p. 1026, Eff. 6/13/86; AMD and TRANS, from ARM 42.16.108, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10.

Mont. Admin. R. 42.15.327 Statement Required for Adjustment of Joint Return

(1) The written request for an adjustment of the joint tax return referenced in ARM 42.15.326 shall include a statement entitled "injured spouse statement." Before any adjustment can be considered, this statement must:

(a) contain the identical social security numbers of both spouses in the same order as they appear on the original joint tax return;

(b) clearly indicate how any income, itemized deductions, exemptions, credits, and tax payments (as originally claimed) should be divided between the spouses; and

(2) This statement, when submitted to the department, does not relieve the obligated taxpayer of the responsibility for requesting a hearing, in writing, if the taxpayer wishes to contest the child support debt. This request must be made within 30 days after the notice of offset and opportunity for hearing is mailed to the taxpayer.

(3) The department will review the statement and the tax return, make the adjustment of the tax liability and refund, and will subsequently notify the taxpayer in writing of the final determination. If the taxpayer disagrees with the adjustment made by the department, the taxpayer may request a review of the adjustment pursuant to ARM 42.2.613 through 42.2.621.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 17-4-110, MCA
Implementing statute(s): 15-1-211, 15-30-2609, 17-4-105, MCA
History: NEW, 1986 MAR p. 1026, Eff. 6/13/86; AMD and TRANS, from ARM 42.16.109, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.328 Form of Claim for Refund

(1) A claim for refund may be in the form of an amended return, a formal claim, or any written instrument signed by the taxpayer, which states the facts concerning payment of the tax and the grounds upon which the claim or refund is based. Any claim based on changes to income or deductions must be on an amended return.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2609, MCA
History: Eff. 12/31/72; AMD and TRANS, from ARM 42.16.132, 2004 MAR p. 3153, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.329 Approval of Innocent Spouse Relief

(1) Reasonable grounds for granting innocent spouse relief must be demonstrated in writing.

(2) Relief may not be granted in excess of the relief granted by the IRS.

(3) The following requirements must be met, before the department may consider an application for innocent spouse relief:

(a) the innocent spouse relief applicant must make a written request stating the reasons and specific periods for which the relief is requested;

(b) the innocent spouse relief applicant must have received Innocent Spouse Relief under section 6015 of the IRC from the IRS to be eligible for consideration by Montana; and

(c) the innocent spouse relief applicant must provide the Department of Revenue with complete copies of all correspondence to and from the IRS, and documentation that relief has been granted by the IRS for those periods.

(4) The innocent spouse relief applicant shall provide a copy of any court order stating that the spouse or former spouse is responsible for paying the taxes.

(5) The taxpayer shall include on the application any other documents and information demonstrating the reasons why relief should be granted, as required in 15-30-2646, MCA.

(6) Upon request, the innocent spouse relief applicant requesting relief shall provide any additional information necessary to compute each spouse's separate Montana tax liability.

(7) When the review has been completed, the applicant will be advised of the decision of the department, and given the option to appeal if they disagree with the decision.

(8) The provisions of this rule only apply to individual income tax liabilities arising from a joint Montana return for tax years beginning after December 31, 2002.

History

Authorizing statute(s): 15-30-2620, 15-30-2646, MCA
Implementing statute(s): 15-30-2646, MCA
History: NEW, 2010 MAR p. 1088, Eff. 4/30/10.

Subchapter 42.15.4 Personal and Dependent Exemptions

Mont. Admin. R. 42.15.401 Definitions (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2114, 15-30-2115, 15-61-201, MCA
History: Eff. 12/31/72; AMD, 1996 MAR p. 1162, Eff. 4/26/96; AMD, 2000 MAR p. 1343, Eff. 5/26/00; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2010 MAR p. 3026, Eff. 12/24/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.402 Personal Exemptions (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2114, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.403 Exemptions for Dependents (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2114, 15-30-2115, 15-30-2116, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2010 MAR p. 3026, Eff. 12/24/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2018 MAR p. 851, Eff. 4/28/18; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.404 Additional Exemption for Senior Citizens

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-112, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, Eff. 11/3/75; AMD, 1982 MAR p. 10, Eff. 1/15/82; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.405 Additional Exemption for Blindness

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-112, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, Eff. 11/3/75; AMD, 1982 MAR p. 10, Eff. 1/15/82; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.406 Deduction for Health Insurance Premiums

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-121, MCA
History: NEW, 1995 MAR p. 2848, Eff. 12/22/95; REP, 2008 MAR p. 178, Eff. 2/1/08.

Mont. Admin. R. 42.15.407 Personal Exemption for Estates and Trusts

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2152, MCA
History: NEW, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2016 MAR p. 22, Eff. 1/9/16.

Mont. Admin. R. 42.15.411 Exemptions for Nonresidents

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
History: Sec. 15-30-112, MCA; Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 12, Eff. 1/15/82; AMD, 1983 MAR p. 1265, Eff. 9/16/83; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Mont. Admin. R. 42.15.412 Deductions from Net Income

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-131, MCA
History: NEW, 1983 MAR p. 1265, Eff. 9/16/83; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Mont. Admin. R. 42.15.413 Nonresident and Part Year Resident Deductions for Keogh and I.r.a. Plans

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-131, MCA
History: NEW, 1983 MAR p. 1358, Eff. 9/30/83; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Mont. Admin. R. 42.15.414 Deductions for Small Business Donations of Computer Equipment to Schools

(1) A taxpayer, who is a shareholder of an electing small business corporation, claiming a deduction for gifts of computer equipment as provided for in 15-31-172, MCA, must attach the following information to the tax return claiming the deduction:

(a) a complete description of all items donated;

(b) a statement of the fair market value of each item donated;

(d) the date the software was developed; and

(e) a copy of the written statement from the donee in which the donee agrees to accept the property and represents that the property will not be transferred by the donee in exchange for money, other property, or services.

(2) For the purposes of the deduction allowed by 15-31-172, MCA, apparatus intended for use with the computer shall include, but not be limited to, software provided that the software was not developed more than five years prior to the date of its donation to a school.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-31-172, MCA
History: NEW, 1983 MAR p. 1744, Eff. 11/26/83; AMD, 2010 MAR p. 1088, Eff. 4/30/10.

Mont. Admin. R. 42.15.424 Deductions for Expenses to Allow Taxpayer to Be Employed

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-121, MCA
History: NEW, 1978 MAR p. 726, Eff. 5/26/78; AMD, 1983 MAR p. 1465, Eff. 10/14/83; REP, 1985 MAR p. 1634, Eff. 11/1/85.

Mont. Admin. R. 42.15.425 Conformance to Federal Filing Status Required in Certain Cases

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-111, MCA
History: NEW, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1983 MAR p. 1357, Eff. 9/30/83; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.427 Deduction for Household and Dependent Care Expenses (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2131, MCA
History: NEW, 1987 MAR p. 1642, Eff. 9/25/87; AMD, 2010 MAR p. 1088, Eff. 4/30/10; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.428 Passive Activity Treatment

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-111, MCA
History: NEW, 1988 MAR p. 2745, Eff. 12/23/88; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Mont. Admin. R. 42.15.429 Recovery of a Tax Credit

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-112 and 15-61-201, MCA
History: NEW, 2000 MAR p. 1343, Eff. 5/26/00; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.433 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-33-105, MCA
Implementing statute(s): Sec. 15-33-103, MCA
History: NEW, 1982 MAR p. 1489, Eff. 7/30/82; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Mont. Admin. R. 42.15.434 Conditions for Exemption for Dividends

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-33-105, MCA
Implementing statute(s): Sec. 15-33-102, MCA
History: NEW, 1982 MAR p. 1489, Eff. 7/30/82; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.435 Reporting Requirements

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-33-105, MCA
Implementing statute(s): Sec. 15-33-104, MCA
History: NEW, 1982 MAR p. 1489, Eff. 7/30/82; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Mont. Admin. R. 42.15.436 Determination of Qualified Investments

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-33-105, MCA
Implementing statute(s): Sec. 15-33-102, MCA
History: NEW, 1982 MAR, p. 1489, Eff. 7/30/82; REP, 2004 MAR p. 3147, Eff. 12/17/04.

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-30-2131, 15-30-2620, MCA
History: NEW, 2018 MAR p. 2311, Eff. 11/17/18; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Subchapter 42.15.6 Medical Care Savings Accounts

Mont. Admin. R. 42.15.601 Medical Care Savings Account Administrator Registration

(1) Every account administrator except a self-administered account holder is required to register on a form provided by the department.

(2) The registration form must contain:

(a) the name, address, identification number of the entity and the names of the owners or officers for a business; or

(b) the name, address, and social security number for a sole proprietorship or partnership.

(3) The account administrator number will be:

(a) the federal employer identification number for a business; and

(b) the social security number of the owner for a sole proprietor or partnership.

(4) Nonregistration does not relieve an account administrator from being responsible for reporting, withholding, and the remitting of penalties.

(5) Each registered account administrator may be assigned an identification number by the department.

(6) Nothing in these rules should be construed as to exempt an account administrator from the applicable requirements of Title 33, MCA.

History

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-61-204, MCA
History: NEW, 1996 MAR p. 1162, Eff. 4/26/96; AMD, 1998 MAR p. 1015, Eff. 4/17/98; AMD, 2004 MAR p. 1974, Eff. 8/20/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2018 MAR p. 851, Eff. 4/28/18.

Mont. Admin. R. 42.15.602 Medical Care Savings Account Reporting and Payments

(1) A Montana medical care savings account (MSA) is subject to the following requirements:

(a) The MSA must have a unique account holder who is an individual and a resident of Montana. A jointly held account does not qualify. Regardless of income tax filing status, married taxpayers must each open an account to register as an account holder to be eligible to reduce their federal taxable income by the amount of their allowable contributions.

(b) Annual interest or income earned in a Montana MSA is excluded from federal taxable income as long as it remains as a deposit in the account, is withdrawn from the account to pay for eligible medical expenses, is distributed to an immediate family member as provided in 15-61-202, MCA, or is used for paying the expenses of administering the account. Year-end interest or other income reports provided to the taxing authorities and the account holder must be provided in such a manner that the interest or other income earned on the Montana MSA can be separately identified in order to remain exempt.

(c) A taxpayer who used a loss in the value of the investment contained in the MSA as a reduction of their federal taxable income, must add this loss back to the federal taxable income for the determination of the Montana taxable income.

(d) Before receiving any exempted transfer of funds from a Montana MSA of an immediate family member, a transferee must establish his or her own account, provided he or she is eligible to be an account holder of a Montana MSA.

(2) Every account holder of a self-administered account, or account administrator, is required to annually submit the following information regarding each MSA:

(a) name of the account holder;

(b) address of the account holder;

(d) starting and ending balances of the account;

(e) contributions made during the tax year by the account holder;

(f) amount of withdrawals made during the tax year by the account holder;

(g) dates of any withdrawals;

(h) interest or other income earned on the principal of the MSA; and

(i) amount of penalties withheld and remitted.

(3) Each individual account holder of a self-administered account must file the information required in (2) on forms provided by or authorized by the department and be remitted with the individual income tax form for the corresponding tax year. The account holder must report the name and address where the account is established, and the account number, annually.

(4) On or before January 31, an account administrator, other than an account holder, must file the information required under (2) on forms provided by or authorized by the department.

(5) Account holders or account administrators who withhold penalties on unqualified withdrawals must submit the penalties to the department as follows:

(a) Account administrators must remit the penalties on or before January 31 of the following year to the department.

(b) Self-administered individual account holders must report and remit penalties with the individual income tax form for the corresponding tax year.

(6) Failure to remit any withheld penalties within the time provided is considered to be an unlawful conversion of trust money. Penalties provided in 15-1-216, MCA, apply to any violation of the requirement to collect, truthfully account for, and pay amounts required to be withheld from ineligible withdrawals of the account holder.

History

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-61-202, 15-61-203, 15-61-204, MCA
History: NEW, 1996 MAR p. 1162, Eff. 4/26/96; AMD, 1998 MAR p. 1015, Eff. 4/17/98; AMD, 2004 MAR p. 1974, Eff. 8/20/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2018 MAR p. 851, Eff. 4/28/18; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.603 Medical Care Savings Account - Withdrawals, Penalties, and Transfers

(1) The funds held in a Montana medical care savings account (MSA) may be withdrawn by the account holder free of tax at any time during the year if they are qualified withdrawals.

(2) Except as provided in (7), qualified withdrawals include:

(a) eligible medical expenses, as defined in 15-61-102, MCA, paid during that year; or

(b) expenses incurred for administering the account.

(3) An unqualified withdrawal must be:

(a) included in the taxpayer's income tax return as ordinary income; and

(b) subject to a penalty equal to ten percent of the amount of the withdrawal from the account unless the withdrawal is made on the last business day of the business year, as set forth in 15-61-203, MCA.

(4) Withdrawals that do not meet the following requirements and exceptions are deemed unqualified:

(a) Withdrawals must be made by the account holder of a self-administered account, or on behalf of an account holder, by January 15 for the purpose of reimbursing eligible medical expenses paid during the previous year.

(b) Each account holder must maintain documentation of eligible expenses for a minimum of three years from the date the account holder filed a Montana income tax return for the year the expenses were incurred.

(c) In the case of requests made by account holders from account administrators for withdrawals to pay for eligible medical expenses, the expenses must be supported by an itemized statement of expenses that were either paid or charged by the account holder and the signature of the account holder attesting that these expenses are "eligible medical expenses." The burden of proving that a withdrawal from an MSA was made for an eligible expense is upon the account holder and not upon the account administrator.

(d) All payments made from an MSA must be made payable to the account holder, the eligible medical provider, the estate, or the legal guardian of the account holder, unless an agreement exists between the account holder and/or the account administrator and the payee to pay eligible medical expenses electronically.

(5) An account holder who becomes a resident of another state is deemed to have made an unqualified withdrawal for the entire value of the balance contained in the account on the date the individual changed residency. The withdrawal is deemed to have been made on the last business day of the taxpayer's Montana residency, and is not subject to the ten percent penalty provided in 15-61-206, MCA.

(6) The direct transfer of funds from a Montana MSA of an account holder to another Montana MSA is deemed an unqualified withdrawal to the transferor and ordinary income to the transferee, to the extent it is includable in the transferee's federal gross income, except when the funds are directly transferred to:

(a) another Montana MSA of the same account holder established to replace the initial one or with a different account administrator; or

(b) a Montana MSA held by an immediate family member of the account holder, to the extent it is not includable in the transferee's federal gross income.

(7) After the death of the account holder:

(a) any distribution or withdrawal of funds from the Montana MSA is deemed an unqualified withdrawal unless:

(i) the funds are distributed as an inherited account; or

(ii) the withdrawals are made during the 365 days following the death of the account owner, either by the estate of the deceased on an existing account, or by any account holder of an inherited account to pay for eligible expenses incurred by the deceased;

(b) inherited accounts are deductible from federal taxable income to the extent they are included in the federal taxable income; and

(c) the ten percent penalty for unqualified withdrawals does not apply to any distribution of funds to the heirs of the deceased whether or not the funds received qualify as an inherited account.

(8) Qualified withdrawals made with respect to a family leave expense, as defined in 15-61-102, MCA, are deemed to be in exchange of adequate consideration for loss of income and must be treated as ordinary income to the recipient, except when received by the account holder or the spouse of the account holder.

(9) All medical records and expenses provided by an account holder to an account administrator are to be kept confidential by the account administrator unless the account holder gives authorization to disclose them to a third party.

History

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-61-102, 15-61-202, 15-61-203, MCA
History: NEW, 1996 MAR p. 1162, Eff. 4/26/96; AMD, 1998 MAR p. 1015, Eff. 4/17/98; AMD, 2004 MAR p. 1974, Eff. 8/20/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2018 MAR p. 851, Eff. 4/28/18; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.604 Individual Liability

(1) If a corporate account administrator, limited liability company, or a limited partnership fails to withhold or fails to remit any penalties withheld to the department as required, the officers and owners are individually responsible for the penalties. A financial institution is not responsible for analyzing the eligibility of the expenses if the account holder attests that the withdrawals are for eligible medical expenses.

(2) Each account holder is individually responsible for withholding and remitting penalties.

(3) In the case of a bankruptcy by an account administrator, the liability for penalties remains unaffected, and the individual or owner remains liable for the amount of penalties withheld but not paid.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-61-203, MCA
History: NEW, 1996 MAR p. 1162, Eff. 4/26/96; AMD, 1998 MAR p. 1015, Eff. 4/17/98; AMD, 2004 MAR p. 1974, Eff. 8/20/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10.

Mont. Admin. R. 42.15.605 Definitions

The following definitions apply to this subchapter:

(1) "Account administrator" means, in addition to the definition found in 15-61-102, MCA, any person, partnership, limited liability company, limited liability partnership, or corporation that acts as a third-party fiduciary to administer a medical care savings account and is either a bank, savings and loan, credit union, or trust company, a health care insurer, a certified public accountant, or an employer who is self-insured under ERISA.

(2) "Child" means a son, stepson, daughter, stepdaughter, or legally adopted son or daughter of the taxpayer.

(3) "Direct transfer" means a withdrawal of all or part of a Montana medical care savings account (MSA) that is deposited in its entirely by means of an electronic bank transfer or by means of check into another Montana MSA.

(4) "Last business day" means the last day of the account administrator's business year.

(5) "Inherited account" means funds coming from a Montana medical care savings account (MSA) of a deceased individual, inherited by an immediate family member and contributed to the heir's Montana MSA upon distribution of the estate or as pay-on-death beneficiary of the account.

(6) "Self-administered" means accounts that are administered by the account holder for their own benefit.

History

Authorizing statute(s): 15-1-201, 15-30-2620, MCA
Implementing statute(s): 15-61-102, 15-61-201, MCA
History: NEW, 2004 MAR p. 1974, Eff. 8/20/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13; AMD, 2018 MAR p. 851, Eff. 4/28/18.

Subchapter 42.15.7 Composite Returns

Mont. Admin. R. 42.15.703 Eligibility

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-105, MCA
History: NEW, 1996 MAR p. 2985, Eff. 10/4/96; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Mont. Admin. R. 42.15.706 Responsibility of Entity

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-105, MCA
History: NEW, 1996 MAR p. 2985, Eff. 10/4/96; REP, 2004 MAR p. 1965, Eff. 8/20/04.

Subchapter 42.15.8 Family Education Savings Act

Mont. Admin. R. 42.15.801 Family Education Savings Program Account Owners and Designated Beneficiaries

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305 and 15-62-201, MCA
Implementing statute(s): Sec. 15-30-111, 15-62-202, and 15-62-206, MCA
History: NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; REP, 2004 MAR p. 1031, Eff. 4/23/04.

Mont. Admin. R. 42.15.802 Contributions to Family Education Savings Program Accounts

(1) The program administrator determines who can be an account owner and from whom it will accept contributions to an account. Account ownership and the acceptance of contributions are not related to the ability of the contributor to reduce Montana taxable income. Entitlement to the deduction depends on meeting specific statutory requirements set forth in Title 15, chapter 62, MCA, and these rules.

(2) An individual, including a nonresident, may reduce their federal taxable income by the lesser of the total contributions they actually make to one or more accounts as provided in 15-30-2120 and 15-62-207, MCA, during the tax year, or $3,000.

(3) A rollover from one account to another or from one program to another state program is not a contribution for which a deduction may be claimed.

(4) For Montana tax purposes, deductible contributions to an account do not include the earnings on the account.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2120, 15-62-201, 15-62-207, MCA
History: NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2010 MAR p. 2748, Eff. 11/27/10; AMD, 2014 MAR p. 2976, Eff. 12/12/14; AMD, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.803 Withdrawals from Family Education Savings Program Accounts and Recapture Tax

(1) Penalties assessed for nonqualified withdrawals are not deductible in arriving at Montana taxable income.

(2) A rollover from one account to another or to an ABLE account is allowed under the same terms described under IRC 529. However, if the funds are rolled over to an account owned by an individual who is not a resident of Montana, then the amount rolled over is a recapturable withdrawal, which is defined in 15-62-208, MCA.

(3) A recapture tax at a rate equal to the highest rate of tax provided in 15-30-2103, MCA, is imposed on the recapturable withdrawal of contributions to a family education savings account deducted by the contributor. Except as provided in (10), the recapture tax is payable by the owner of the account from which the withdrawal was made even if the account owner did not make the deductible contribution. The account owner is liable for the tax even if the account owner is not a Montana resident at the time of the withdrawal.

(4) An account owner who is subject to the recapture tax must report the tax on the tax return for the taxable year of the withdrawal and must pay the tax at the time the income tax for such year is due.

(5) The portion of a recapturable withdrawal that is not treated as the withdrawal of earnings shall be treated as:

(a) first, out of nondeductible contributions not previously withdrawn; and

(b) second, out of deductible contributions not previously withdrawn.

(6) The portion of any other withdrawal that is not treated as the withdrawal of earnings shall be treated as:

(a) first, out of deductible contributions not previously withdrawn; and

(b) second, out of nondeductible contributions not previously withdrawn.

(7) The taxpayer shall have the burden of sustaining a claim that all or a portion of the contributions withdrawn were not attributable to deductible contributions. There shall be a presumption that a recapturable withdrawal is a withdrawal of deductible contributions.

(8) A recapturable withdrawal of amounts that previously reduced Montana taxable income under 15-30-2120(3)(e), MCA, is Montana source income pursuant to 15-30-2101(18)(a)(xvi), MCA.

(9) Nonresidents are subject to the recapture tax under ARM 42.15.803 and 42.15.804.

(10) If the account is established under the Montana Uniform Transfers to Minors Act, and the minor is not yet 21 years of age, the custodian of that account is subject to any recapture tax on a recapturable withdrawal.

History

Authorizing statute(s): 15-30-2620, 15-62-201, MCA
Implementing statute(s): 15-30-2120, 15-62-201, 15-62-208, MCA
History: NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.804 Verification of Family Education Savings Program Account Contributions and Withdrawals

(1) Each program manager shall submit a report to the department via the state of Montana's secure file transfer service (or functional equivalent), by February 28 following the close of the preceding tax year which identifies all contributions and withdrawals for family education savings accounts for which the account owner is, or was at the time the account was opened, a Montana resident. The report must be submitted in an electronic format sortable by the following information for each contributor, designated beneficiary, account owner, and distributee:

(a) full name;

(b) last reported address;

(d) amount of the contributions;

(e) amount of the withdrawals (and to the extent that the Internal Revenue Service requires such information with respect to withdrawals, the portion constituting contributions and the portion constituting earnings); and

(f) in the case of the account owner, a notation as to whether the distribution is an early or nonqualified withdrawal.

(2) At the request of the department, a program manager shall provide complete copies of any other reports about accounts that it provides to either the Internal Revenue Service or the Montana Board of Regents.

(3) A program manager shall report a withdrawal as an early withdrawal if the withdrawal is made within one year of the date that the account was opened.

(4) A program manager shall withhold the recapture tax from any recapturable withdrawal from an account that was at any time owned by a resident of Montana but that at the time of the withdrawal is not owned by a person who is a resident of Montana. For purposes of this provision, the program manager shall assume that the account owner's address is the last address that the account owner reported to the program manager.

(5) Any recapture tax that is withheld shall be paid to the department not later than the last day of the month following the month in which such withholding occurred. A program manager shall have no liability to the department for failure to withhold recapture tax if such error was made in good faith.

(6) A taxpayer who makes a recapturable withdrawal, for which withholding would be required, may petition the department in writing to determine the amount of the recapture tax. The petition shall include all facts relevant to the proposed withdrawal, including information about the account and other accounts owned by the taxpayer and evidence to show that all or a portion of the contributions are not attributable to previously deducted contributions. If the department is satisfied with the evidence, it shall issue a letter determining the recapture tax to be withheld by the program manager.

(7) Nothing in statute or rule prevents the department from directly contacting the contributor, designated beneficiary, account owner, or distributee for the reporting information described herein.

History

Authorizing statute(s): 15-30-2620, 15-62-201, MCA
Implementing statute(s): 15-30-2120, 15-62-201, 15-62-208, MCA
History: NEW, 1998 MAR p. 680, Eff. 3/13/98; AMD, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2022 MAR p. 1948, Eff. 9/24/22; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.805 Definitions

In addition to the terms defined in 15-62-103, MCA, the following definitions also apply to terms used in this subchapter:

(1) "Act" means the Family Education Savings Act, as referenced in 15-62-101, MCA.

(2) "Child" means a son, stepson, daughter, stepdaughter, or legally adopted son or daughter of the taxpayer.

(3) "Distributee" means the account owner or designated beneficiary who withdraws the funds. If the account is established under the Montana Uniform Transfers to Minors Act, and the minor is not yet 21 years of age, the distributee is the custodian of that account.

(4) "Program" means the family education savings program established pursuant to the Act, or any other program established and maintained under another state that qualifies as a qualified tuition program under IRC 529.

(5) "Program manager" means a financial institution selected pursuant to 15-62-203, MCA.

History

Authorizing statute(s): 15-30-2620, 15-62-201, MCA
Implementing statute(s): 15-30-2120, 15-62-103, 15-62-201, MCA
History: NEW, 2000 MAR p. 1344, Eff. 5/26/00; AMD, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.806 Taxation of Family Education Savings Program Account Earnings

(1) Earnings on family education savings program accounts are not included in Montana taxable income when earned. The earnings will be included in Montana taxable income when distributed to the extent they are not used to pay for qualified education expenses.

History

Authorizing statute(s): 15-30-2620, 15-62-201, MCA
Implementing statute(s): 15-30-2120, MCA
History: NEW, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2022 MAR p. 1948, Eff. 9/24/22; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.807 Effective Date of Contribution for Tax Purposes

(1) For purposes of determining whether a contribution should be considered for one tax year or another, the date of mailing will be determinative. A certificate of mailing issued by the post office will be evidence of the date of mailing.

History

Authorizing statute(s): 15-30-2620, 15-62-201, MCA
Implementing statute(s): 15-30-2120, MCA
History: NEW, 2004 MAR p. 1031, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.808 Deductions for Contributions to Other States' 529 Plans

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2110, 15-62-207, MCA
History: NEW, 2014 MAR p. 2976, Eff. 12/12/14; REP, 2022 MAR p. 1948, Eff. 9/24/22.

Subchapter 42.15.9 First-Time Home Buyer Deductions

Mont. Admin. R. 42.15.901 Definitions

The following definitions apply to this subchapter:

(1) "Montana Form FTB" means the Montana first-time home buyer's savings account form containing annual reporting information for self-administered individual accounts.

(2) "Self-administered account holder" is synonymous with that of an account holder as defined in 15-63-102, MCA, but a self-administered account holder may also be an account administrator. For purposes of these rules, the term may be used in place of account administrator.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-63-102, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04; AMD, 2013 MAR p. 178, Eff. 2/1/13.

Mont. Admin. R. 42.15.902 First-Time Home Buyer Account Administrator Registration (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-63-102, 15-63-204, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04; AMD, 2013 MAR p. 178, Eff. 2/1/13; REP, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.903 Account Administrator Reporting and Payments

(1) Every self-administered account holder or account administrator is required to annually submit the following information regarding each account:

(a) name of the account holder;

(b) address of the account holder;

(d) deposits made during the tax year by the account holder;

(e) amount of withdrawals made during the tax year by the account holder;

(f) dates of any withdrawals;

(g) interest or other income earned on the principal and excess contributions of the account; and

(h) amount of penalties withheld and remitted.

(2) The self-administered account holder must also include the name and address of where the account is established and the account number.

(3) Both the contributions and any interest, or other income, earned on the account are to be segregated by the self-administered account holder or account administrator from all other accounts.

(4) Each self-administered individual account holder must establish a separate account with a financial or other approved institution. The account must be segregated from all other accounts.

(5) Any year-end reporting of interest, or other income, earned to the taxing authorities and to the account holder of interest, or other income earned must be done so that any interest, or other income earned on that account could be separately identified.

(6) For the purpose of determining the amount of interest, or other income, earned on the principal which is excluded from Montana adjusted gross income, when interest or other income earned is on principal and excess contribution, the provisions of ARM 42.15.906 apply.

(7) On or before January 31, an account administrator other than a self-administered account holder must file the information required under (1) on forms provided by or authorized by the department.

(8) Each self-administered account holder must file the information required in (1) either on a Montana Form FTB provided by the department or any means available, so long as the necessary information is provided and remitted with the individual income tax form for the corresponding tax year.

(9) Self-administered account holders or account administrators who withhold penalties on monies used for items other than eligible expenses must submit the penalties to the department.

(a) Account administrators, other than self-administered account holders, must remit the penalties monthly by the 15th day of the following month when the total amount of penalties exceeds $500.

(b) Account administrators, other than self-administered account holders, whose total penalties withheld during the calendar year are less than $500 must remit the penalties on or before January 31 of the following year to the department.

(c) Self-administered account holders must complete and file Montana Form FTB and remit the penalty shown on Montana Form FTB with the individual income tax return (Montana Form 2).

(10) Failure to remit any withheld penalties within the time provided is considered to be an unlawful conversion of trust money. Penalties provided in 15-1-216 and 15-30-2641, MCA, apply to any violation of the requirement to collect, truthfully account for, and pay amounts required to be withheld from ineligible withdrawals of the account holder.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-63-202, 15-63-204, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2013 MAR p. 178, Eff. 2/1/13.

Mont. Admin. R. 42.15.904 First-Time Home Buyer Account - Withdrawals

(1) The funds held in an account may be withdrawn by the account holder at any time for eligible expenses. Withdrawals for the purpose of paying eligible expenses shall not be subject to the 10% penalty.

(2) Withdrawals to pay for eligible costs must be supported by an itemized statement of the down payment and allowable closing costs that were paid by the account holder. The account holder must sign the statement attesting that these expenses are eligible costs.

(3) The burden of proving that the withdrawal from a savings account was made for eligible costs is upon the account holder and not upon the account administrator. Each account holder must maintain documentation of eligible costs.

(4) There shall be a penalty for withdrawal of funds by the account holder for purposes other than the payment of eligible costs except upon the death of the account holder. The penalty shall be 10% of the amount of the withdrawal from the account and, in addition, the amount withdrawn shall be taxed as ordinary income in the year the funds are withdrawn for non-eligible costs.

(5) The direct transfer of funds from a savings account to a savings account with a different account administrator shall not be considered a withdrawal for purposes of this rule. A direct transfer is when monies in an account are transferred to a new account without the beneficiary or account holder receiving any funds.

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-63-203, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04.

Mont. Admin. R. 42.15.905 Individual Liability

(2) A financial institution is not responsible for analyzing the eligibility of the expenses if the account holder attests that the withdrawal is made for eligible costs.

(3) Each self-administered account holder is individually responsible for remitting the penalties as stated in ARM 42.15.903.

(4) In the case of a bankruptcy by an account administrator, the liability for the penalties remain unaffected and the individual or owners remains liable for the amount of penalties withheld but unpaid.

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-63-203, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04.

Mont. Admin. R. 42.15.906 Tax Exemption for First-Time Home Buyer

(1) An account holder who remains a "first-time home buyer" and who contributed prior to January 1, 2024, into an account more than the maximum exclusion allowed under 15-63-202, MCA, in any tax year prior to 2024 may exclude from subsequent years any amounts previously deposited and not deducted as principal in a prior year.

(2) Once an individual purchases a single-family residence, the individual no longer is considered an account holder and a first-time home buyer. In subsequent years, the individual is not entitled to exclude amounts deposited into a first-time home buyer savings account or amounts previously deposited but not yet excluded from the account holder's federal taxable income.

(3) Interest or other income earned on the principal is excluded from federal taxable income. Interest on other income on excess contributions, which have not yet been classified as principal, is not exempt in the years the interest or other income is earned.

(4) The amounts deposited into a first-time home buyer savings account is not considered principal until the year it is excluded from federal taxable income pursuant to 15-30-2120, MCA. For example, if a single individual who has never owned a home transferred $15,000 from an existing savings account into a first-time home buyer account in year one and purchases a qualifying home at the end of December in year three, the effect on their Montana returns will be as follows:

(a) For year one, the individual reduces their state income by $3,000 plus $90 in interest earned on the $3,000 principal only ($90 at the rate of three percent of the $3,000 principal). The remaining interest ($360 at the rate of three percent of the $12,000 carryover amount) is taxable in year one.

(b) In year two, the single individual is allowed a $3,000 carryover reduction plus interest earned on $6,090 ($183 at the rate of three percent of the $6,000 principal) for a total of $3,183 reduction on the state income tax return. The remaining interest ($281 at the rate of three percent of the $9,360 carryover amount) is taxable in year two.

(c) At the end of December in year three, the single individual buys a qualifying home. The individual is permitted the $3,000 carryover reduction on the Montana income tax for year three plus interest earned to the date of purchase ($278 at the rate of three percent on $9,273) for a total of $9,551. The taxpayer must spend at least $9,551 for eligible first-time home buyer expenses. The amount includes $9,000 that qualifies for the reduction ($3,000 for year one; $3,000 for year two; $3,000 for year three) plus the tax deferred interest for $551 earned during year one, year two, and year three.

(d) Once the taxpayer purchases the home, the taxpayer can no longer claim the carryover reduction for the portion of the $15,000 ($6,000 plus interest) that the taxpayer did not claim as a reduction in prior years.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-63-203, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.907 First-Time Home Buyer Account - Non-Eligible Withdrawal for Nonresident

(1) A resident account holder who subsequently becomes a nonresident and who has established a Montana first-time home buyer account while a resident and excluded income from Montana adjusted gross income in prior years is not entitled to a qualified withdrawal for the purchase of a single-family residence outside the state of Montana.

(2) A non-resident who files a final tax return in Montana must report, as income in the final year of residency, the amount of principal and interest previously excluded from adjusted gross income. This amount is considered a non-qualified withdrawal and subject to the 10% penalty provided in 15-63-203 , MCA, unless withdrawn on the last business day of the account holder's business year.

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-63-102 and 15-63-203, MCA
History: NEW, 2004 MAR p. 1033, Eff. 4/23/04.

Subchapter 42.15.10 Montana Achieving a Better Life Experience (ABLE) Accounts

Mont. Admin. R. 42.15.1001 Definitions

The following definitions apply to terms used in this subchapter:

(1) "ABLE account" or "account" mean the same as "account," which is defined in 53-25-103, MCA.

(2) "Achieving a better life experience (ABLE) program" or "program" means the same as "program," which is defined in 53-25-103, MCA.

(3) "Contributor" means the same as the term is defined in 53-25-103, MCA, and includes the individuals listed in ARM 42.15.1002 that have contributed to one or more accounts established under the Montana ABLE program or to a qualified program established by another state, and are eligible for a deduction to adjusted gross income under 15-30-2110(12), MCA.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 53-25-118, MCA
Implementing statute(s): 53-25-104, 53-25-117, 53-25-118, MCA
History: NEW, 2021 MAR p. 76, Eff. 1/16/21.

Mont. Admin. R. 42.15.1002 Deduction for Contributions to an Achieving a Better Life Experience (able) Account

(1) In addition to the individuals listed in 15-30-2120(6), MCA, the following contributors identified in 53-25-117, MCA, are also allowed a deduction from Montana taxable income for a contribution made to an ABLE account:

(a) the designated beneficiary;

(b) the spouse of the designated beneficiary; or

(c) a parent, grandparent, sibling, or child related to the designated beneficiary by blood, marriage, or legal adoption.

(2) The deduction provided under 15-30-2120(6), MCA, for contributions to an ABLE account is available to resident and nonresident individuals. If a nonresident individual contributes to an account, the deduction is only allowed if the designated beneficiary is the nonresident's child or stepchild and is also a Montana resident.

(3) A contributor must provide a written report to the designated beneficiary or agent, by the end of the tax year in which the contribution is made to an ABLE account, detailing the amount of the contributions that will reduce Montana taxable income for that tax year.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 53-25-118, MCA
Implementing statute(s): 15-30-2120, 53-25-104, 53-25-117, 53-25-118, MCA
History: NEW, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.1003 Achieving a Better Life Experience (able) Account Recapture Tax

(1) There is a recapture tax, payable by a designated beneficiary, regardless of residency status, on recapturable withdrawals from an ABLE account. Recapturable withdrawals and the amount of the recapture tax are provided in 53-25-118, MCA.

(2) A recapturable withdrawal of amounts that previously reduced a contributor's Montana taxable income under 15-30-2120(6), MCA, is Montana source income to the designated beneficiary in the year of the recapturable withdrawal, as described in 15-30-2101(18)(a)(xvi), MCA.

(3) The recapture tax must be determined and withheld by the designated beneficiary or agent and reported to the department based on the recapturable withdrawal that occurred and the report detailing the contributions as required in ARM 42.15.1002(3). The designated beneficiary or agent must maintain records showing the reported contributions and withdrawals.

(4) The agent shall withhold and remit the recapture tax on a Montana individual income tax return for the tax year of the withdrawal if the recapturable withdrawal occurred from an account for which the designated beneficiary is no longer a resident of Montana.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 53-25-118, MCA
Implementing statute(s): 15-30-2103, 15-30-2120, 53-25-118, MCA
History: NEW, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.1004 Verification of Achieving a Better Life Experience (able) Account Contributions and Withdrawals

(1) Each program manager shall submit a report to the department via the state of Montana's secure file transfer service (or functional equivalent), by February 28 following the close of the preceding tax year which identifies all contributions and withdrawals for ABLE accounts of Montana resident designated beneficiaries. The report must also include contributions made to accounts of designated beneficiaries who were residents at the time the account was opened.

(2) The report must be in an electronic format sortable by the following contributor and designated beneficiary information:

(a) full name;

(b) last reported address;

(d) amount of the contributions;

(f) a notation as to whether a distribution is a recapturable withdrawal, and if the withdrawal is made in violation of IRC 592A, when applicable.

(3) At the request of the department, a program manager shall provide complete copies of any other reports about accounts that it provides to either the Internal Revenue Service or to the Montana Department of Public Health and Human Services.

(4) Nothing in statute or rule prevents the department from directly contacting the contributor, designated beneficiary, or agent for the reporting information described herein.

History

Authorizing statute(s): 15-1-201, 15-30-2620, 53-25-118, MCA
Implementing statute(s): 15-30-2120, 53-25-118, MCA
History: NEW, 2021 MAR p. 76, Eff. 1/16/21; AMD, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Subchapter 42.15.15 Military Retirement Income

Mont. Admin. R. 42.15.1501 Definitions

The following definitions apply to this subchapter:

(1) "Armed forces" means the same as the term provided in 10 USC § 101 and includes the Army, Navy, Marine Corps, Air Force, Space Force, or Coast Guard. For the purposes of administering these rules, the term also includes the Montana Army National Guard or the Army National Guard of other states; the Montana Air National Guard or the Air National Guard of other states; or a reserve component, as defined in 38 U.S.C. 101, of the United States armed forces.

(2) "Montana source wage income" means the same as the term defined in 15-30-2120, MCA, and does not include income from any passive activity as that term is defined in 26 USC 469(c). This definition is not the same as the definition of Montana source income in 15-30-2101, MCA, and is used in the calculation of the working military retiree income exclusion.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2120, MCA
History: NEW, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.1510 Working Armed Forces/Military Resident Retiree Taxable Income Exclusion

(1) A Montana resident who retired from the armed forces is entitled to an exclusion from taxable income received after December 31, 2023, as provided in 15-30-2120, MCA, in an amount equal to the lesser of their Montana source wage income or fifty percent of their military retirement income. The exclusion is available to an individual who began to receive military retirement income while a resident and an individual receiving military retirement income who became a resident after June 30, 2023.

(2) An individual who received military survivor benefits while a resident or an individual who received military survivor benefits who became a resident after June 30, 2023, may exclude fifty percent of the benefits received after December 31, 2023, which are included in their federal taxable income.

(3) Informational examples regarding the exclusion administered under this rule are as follows:

(a) Wes entered service into the Air Force while a Montana resident and maintained his residency. He retired September 30, 2023, and returned to Montana to work a full-time job. If his wages are $50,000 and his military retirement income is $40,000, he can exclude $20,000 from his federal taxable income which is the lesser of his Montana source wage income or fifty percent of his military retirement income.

(b) Assuming the same military service and residency for Wes as in (a), but Wes works seasonally earning $18,000, which is reported on his Schedule C as self-employment income. Wes' exclusion amount is limited to his self-employment income of $18,000.

(c) Megan was a Florida resident serving in the Navy outside of Montana. Megan retired, started receiving her military retirement on August 30, 2023, and permanently moved to Montana soon after. Megan is eligible for the exclusion because she became a resident after June 30, 2023.

(d) Jake was a Texas resident serving in the Army outside of Montana. Jake retired, started receiving his military retirement on April 30, 2023, and permanently moved to Montana on May 17, 2023. Jake is not eligible for the exclusion because he began receiving his military retirement while a nonresident and became a resident prior to June 30, 2023.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-30-2120, MCA
History: NEW, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.1511 Nonresident Military Servicemembers

(1) Nonresident members of the armed forces living in the state solely for compliance with military orders do not become residents and their military compensation is not Montana source income. Nonresident spouses who move to Montana solely to be with nonresident military servicemembers may retain their home residence and, subject to certain rules and limitations described in (6), their wage and other personal services income is not Montana source income.

(2) Nonresident military servicemembers and their spouses are, except as provided in (4), subject to Montana individual income tax in the same manner and to the same extent as any other nonresident with Montana source income.

(3) As provided in 1-1-215, MCA, if a person claims a residence within Montana for any purpose, such as obtaining a resident hunting or fishing license, Montana is their residence for all purposes, including Montana individual income tax, unless there is a specific statutory exception. Provided, however, 87-2-102, MCA, allows exceptions for certain nonresident military servicemembers and their dependents to obtain resident hunting, fishing, and trapping licenses without subjecting them to individual income tax liability as residents.

(4) While the Montana income tax liability of nonresidents is usually determined by calculating the tax as if they were residents, then multiplying that calculation by their ratio of Montana source income to total income, the Military Family Tax Relief Act of 2003 requires states to implement special rules for military servicemembers. If a nonresident military servicemember with Montana source income or their spouse is required to file a Montana individual income tax return, the exempt military income must be excluded from both the numerator and the denominator in determining the ratio of Montana source income to total income as provided in ARM 42.15.110.

(5) An example of how the tax liability would be calculated is:

(a) A nonresident military servicemember and their nonresident spouse who do not claim an exemption as described in (6)(b) are filing a joint return have the following income:

(b) The exempt military compensation is a subtraction that reduces Montana taxable income:

Gross income | $71,500 Less exempt military compensation | ($40,000) Montana taxable income | $31,500

(c) The tax, determined on the taxable income, is multiplied by the ratio of Montana source income to total income from all sources except the exempt military compensation:

Montana source income $ 30,000

Total income from all sources except

military compensation ($30,000 + 500 + 1,000) = $ 31,500

Ratio $30,000/$31,500 = .9523

(d) If the tax determined on the taxable income were $1,000, the Montana tax liability would be $952, the Montana tax liability of $1,000 multiplied by .9523, the ratio of $30,000 to $31,500.

(6) The Military Spouses Residency Relief Act, Public Law No. 11197 (MSRRA), enacted special rules that affect how Montana and other states tax the wage and other personal service income earned by nonmilitary spouses (for simplicity, the term "wages" will be used to describe all personal services income).

(a) If a military servicemember and nonmilitary spouse are residents of the same state (the "home state") when the nonmilitary spouse moves to Montana to be with the military servicemember as described in (1), the MSRRA allows the nonmilitary spouse to remain a resident of the home state and only the home state may tax the nonmilitary spouse's wages. Wages earned in Montana that are sourced to the home state are not Montana source income.

(b) Qualified nonmilitary spouses must claim exemption from wage withholding annually by completing Form MW-4 – Employee's Withholding and Exemption Certificate which they submit each year to their employer by end of the first payroll period in January.

(c) If a nonmilitary spouse no longer meets the requirements of the MSRRA, their wages will be sourced to Montana, as provided in 15-30-2101, MCA. The following events disqualify the nonmilitary spouse's wages under the MSRRA:

(i) the military servicemember leaves the military;

(ii) the nonmilitary spouse becomes a resident of Montana;

(iii) the marriage to the military servicemember terminates; or

(iv) the military servicemember is reassigned out of Montana but the nonmilitary spouse remains in Montana.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, MCA
History: Eff. 12/31/72; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; TRANS and AMD, from 42.15.112, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Mont. Admin. R. 42.15.1512 Resident Military Salary Exclusion

(1) The following items of military compensation received by a resident military servicemember are exempt from Montana income tax:

(a) basic, special, and incentive pay received for serving on active duty as a member of the armed forces;

(b) basic, special, and incentive pay received for serving on active duty as a member of the National Guard;

(c) basic, special, and incentive pay received by a member of a reserve component of the armed forces or a member of the National Guard, for active duty in a "contingency operation" as defined in 10 USC 101; and

(d) basic, special, and incentive pay received by a member of the National Guard performing a "homeland defense activity" as defined in 32 USC 901.

(2) Military compensation that is not exempt from Montana income tax includes:

(a) salary received for annual training and inactive duty training for service not described in (1)(b) through (1)(d);

(b) salary received by a member of a reserve component of the armed forces for service not described in (1)(b) through (1)(d);

(c) salary received by a member of the National Guard engaged in "active Guard and Reserve duty" as defined in 10 USC 101, for service not described in (1)(b) through (1)(d); and

(d) retired, retainer, or equivalent pay, or allowances that do not fall under the subtraction for military retirement income found in 15-30-2120, MCA.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2101, 15-30-2120, MCA
History: Eff. 12/31/72; AMD, Eff. 7/5/75; AMD, 1982 MAR p. 10, Eff. 1/15/82; AMD, 1982 MAR p. 1124, Eff. 5/82/82; AMD and TRANS, from ARM 42.15.111, 2004 MAR p. 3147, Eff. 12/17/04; AMD, 2010 MAR p. 1088, Eff. 4/30/10; AMD, 2015 MAR p. 2325, Eff. 12/25/15; AMD, 2017 MAR p. 1676, Eff. 9/23/17; TRANS and AMD, from 42.15.214, 2025 MAR, Notice No. 42-1088, Eff. 1/25/25.

Chapter 42.16 Payment of Tax

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-149, MCA
History: NEW, 1984 MAR p. 2031, Eff. 12/28/84; REP, 2004 MAR p. 3153, Eff. 12/17/04.

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): ec. 15-30-131, MCA
History: Eff. 12/31/72; AMD, 1982 MAR, p. 14, Eff. 1/15/82; AMD, 1982 MAR, p. 2102, Eff. 11/25/82; REP, 2004 MAR p. 3153, Eff. 12/17/04.

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-1-601 and 15-30-131, MCA
History: NEW, 1982 MAR p. 2102, Eff. 11/25/82; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Chapter 42.17 Withholding and Estimated Tax Payments

Subchapter 42.17.1 General Withholding

Mont. Admin. R. 42.17.101 Definitions

The following definitions apply to this chapter:

(1) "Individual" means a worker who renders service in the course of an occupation.

(2) "Lookback letter" means the letter sent to employers notifying them of their filing frequency for employee wage withholding.

(3) "Mineral payments" mean payments made to royalty interest owners that represent the royalty interest owner's future share of the receipts from the sale of the natural resource.

(4) "Net royalty amount payable" means the amount of mineral proceeds subject to withholding. This amount is equal to the gross royalty payments less any taxes and other expenses deducted pursuant to the royalty agreement in effect.

(5) "Net taxable earnings" means an employee's gross earnings less the employee payments described in ARM 42.17.103(1).

(6) "Overriding royalty interest" means ownership in a percentage of production or production revenues, free of the cost of production, created by the lessee, company and/or working interest owner and paid by the lessee, company and/or working interest owner out of revenue from the well.

(7) "Person" means any natural person, company, corporation, association, partnership, joint venture, cooperative, estate, trust, receiver, or any other party or entity that has a working interest, royalty interest, overriding royalty interest, production payment, production payment including in-kind exchanges, or any other ownership interest entitled to production proceeds from deposits in this state.

(8) "Producer" means the person that extracts natural resources from deposits in the state.

(9) "Remitter" means the person obligated under a mineral lease to pay royalties to the royalty owner or their assignee, to deliver minerals to a purchaser to the credit of the royalty owner or their assignee, or to pay a portion of the proceeds of the sale of the minerals to the royalty owner or their assignee. A producer that is not paying mineral royalties directly to a mineral royalty owner is not a remitter.

(10) "Reporting forms" include, but are not limited to:

(a) Form MW-1, the Montana Withholding Tax Payment Voucher;

(b) Form MW-3, the Montana Annual W-2 1099 Withholding Tax Reconciliation form;

(d) Form W-2, the federal wage and tax statement form;

(e) Form RW-1, the Mineral Royalty Withholding Tax Payment Voucher form;

(f) Form RW-3, the Montana Annual Mineral Royalty Withholding Tax Reconciliation form; and

(g) All forms included in the federal Information Return Series.

(11) "Take in kind" means an operator or non-operator who elects to receive production in lieu of proceeds from the sale of production.

History

Authorizing statute(s): 15-30-2547, 15-30-2620, MCA
Implementing statute(s): 15-30-2501, 15-30-2538, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1996 MAR p. 1169, Eff. 4/26/96; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2010 MAR p. 2230, Eff. 9/24/10; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.102 Employer Defined

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-201, MCA
History: Eff. 12/31/72; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.103 Other Payments; Designated Distributions; Election to Withhold

(1) Employee contributions to pensions, profit sharing, stock bonus, or annuity plans, deferred compensation and cafeteria plans where the payments are not otherwise considered wages, an IRA, or commercial annuity contracts are exempt from withholding to the extent that the contributions are not includable in the employee's adjusted gross income for federal income tax purposes.

(2) Sick pay paid by a third party is not subject to withholding taxes unless the payor receives a written request from the employee, or the employer and the third party entered into an agreement that makes the third party responsible for the reporting and payment of withholding taxes. When a third party reports and pays withholding taxes, the third party must use its own name and tax identification number instead of the employer's.

(3) A recipient of any designated distribution from a deferred compensation plan, individual retirement plan, or commercial annuity, as defined in IRC 3405, may request the payor withhold state income tax from these payments by filing a Form MW-4 with the payor.

(a) The recipient's tax withholding election shall specify a flat dollar amount of income tax to be withheld by the payor from each designated distribution. The election shall also specify the name, current address, and taxpayer identification number of the recipient. Any change or revocation of a previously filed election shall include the same information as required in this rule for an initial election except the recipient should indicate whether a change or revocation of a previously filed election is being made. In this case, the payor shall remit the withholding tax to the department as required in ARM 42.17.113.

(b) The payor has the option to choose not to withhold from any designated distribution if the amount to be deducted and withheld is less than $10. Additionally, income tax withholding by the payor from any designated distribution shall not be required if the amount to be withheld would reduce the net amount of the distribution to less than $10.

(c) The payor of distributions, made up in whole or in part of contributions made pursuant to (1) or solely of employer contributions, shall notify the recipients of the availability to state withholding and the requirements for the payment to state income tax on the taxable portion of a distribution.

(i) Payors shall notify recipients of the state requirements at the same time recipients are notified of the federal election requirements under IRC 3405(d)(10)(B).

(ii) Payors shall notify recipients at the time of distribution and yearly thereafter.

(4) A recipient of unemployment compensation may request that the payor withhold state income tax from each payment by filing a Form MW-4 with the payor.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2501, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1983 MAR p. 1465, Eff. 10/14/83; AMD, 1984 MAR p. 2032, Eff. 12/28/84; AMD, 1988 MAR p. 392, Eff. 2/26/88; AMD, 1996 MAR p. 1169, Eff. 4/26/96; AMD, 1996 MAR p. 2610, Eff. 10/4/96; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.104 Fees

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-201, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.105 Computation of Withholding

(1) Employers shall calculate the state income tax amount to withhold from employees according to the length of the payroll period, the employee's net taxable earnings, the employee's federal filing status, and any extra withholding reported on Form MW-4, using the department's "Montana Withholding Tax Tables." The tables are based on the formulas provided in (2) and (3) and show the amount to withhold each pay period.

(2) Montana withholding tables are based on the following annual withholding formulas as adjusted annually for inflation and changes to federal tax parameters. Wage withholding is equal to the following amounts based on the employee's federal filing status:

(a) Single or married filing separately:

(i) 0% of the first $14,600; plus

(ii) 4.7% of the next $20,500; plus

(iii) 5.9% of the net taxable earnings over $35,100.

(b) Married filing jointly or qualifying widow(er):

(i) 0% of the first $29,200; plus

(ii) 4.7% of the next $41,000; plus

(iii) 5.9% of the net taxable earnings over $70,200.

(i) 0% of the first $21,900; plus

(ii) 4.7% of the next $30,750; plus

(iii) 5.9% of the net taxable earnings over $52,650.

(3) Withholding formulas for nonannual payroll periods are calculated by dividing the dollar amounts for annual payroll in (2) by the ratio of the number of working days in a year to the number of working days in the payroll period. The following table shows payroll periods and the corresponding divisors:

(4) By the end of each tax year, the department shall adjust the withholding formulas for inflation by either multiplying the dollar amounts in (2) by the inflation factor defined in 15-30-2101, MCA, or by updating the values based on the adjusted amounts provided by the IRS for the new tax year.

(5) If the department determines that the inflation adjustment is immaterial, it may keep existing withholding tables in effect for another year.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2103, 15-30-2502, MCA
History: NEW, 1982 MAR p. 2152, Eff. 12/17/82; AMD, 1983 MAR p. 996, Eff. 7/29/83; AMD, 1986 MAR p. 2066, Eff. 12/27/86; TEMP, AMD, 1987 MAR p. 1564, Eff. 9/11/87; AMD, 1987 MAR p. 2244, Eff. 12/11/87; AMD, 1989 MAR p. 230, Eff. 1/27/89; AMD, 1990 MAR p. 121, Eff. 1/12/90; AMD, 1991 MAR p. 129, Eff. 2/1/91; AMD, 1992 MAR p. 2776, Eff. 12/25/92; AMD, 1993 MAR p. 1111, Eff. 5/28/93; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2008 MAR p. 65, Eff. 1/18/08; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.111 Montana Income Tax Withholding; Form Mw-4 Filing Requirements

(1) Every employer transacting business in Montana is required to withhold Montana state income tax from wages paid to an employee for services rendered within Montana, unless the compensation is specifically exempted under Montana law.

(2) Compensation which may be excludable from adjusted gross income under a United States tax treaty remains subject to Montana withholding as the determination whether a nonresident alien qualifies for tax treaty exclusion cannot be made until the individual's Montana income tax return is filed.

(3) Except as provided under 15-30-2513, MCA, temporary employment or employment of short duration within Montana does not relieve the employer of the obligation to withhold employee wages.

(4) Employers must provide each new employee a Form MW-4 for purposes of determining the amount of an employee's withholding or exemption status.

(5) If an employee fails to complete a Form MW-4, the employer shall calculate withholding using the single filing status calculation.

(6) The Amtrak Reauthorization and Improvement Act of 1990 exempts from state income tax and withholding the compensation of certain railroad, trucking, and air and water carrier employees unless they are Montana residents. The exemption from withholding applies only to nonresident interstate carrier employees and the employer applies the exemption based on the residency status claimed by the employee. No Form MW-4 is required for this exemption.

(7) Wages paid to an enrolled member of a Native American tribe are subject to withholding, except as provided in ARM 42.15.220.

(a) When the employee is an enrolled tribal member of the governing tribe of the reservation on which the enrolled tribal member works and resides:

(i) the wages earned by the employee are derived from reservation sources; and

(ii) the employee submits a Form MW-4 to the employer attesting that the employee resides on his or her reservation, together with a certificate of enrollment.

(b) When wages are derived from both reservation sources and nonreservation sources, only wages derived from reservation sources are exempt from withholding, provided the employee meets all the criteria in (7)(a).

(c) When an employee does not reside on his or her reservation for an entire pay period, only wages earned while the employee was residing on the reservation are exempt from taxation, provided the employee meets all the criteria in (7)(a).

(8) Wages paid to a resident of North Dakota for personal services rendered within Montana are not subject to withholding provided the employee has filed a Form MW-4, in accordance with ARM 42.17.134.

(9) Wages paid to the nonmilitary spouse of a military serviceperson for personal services rendered in Montana which meet the criteria in ARM 42.15.112, are not subject to withholding provided the employee has completed a Form MW-4.

(10) A withholding exemption claimed on Form MW-4 must be renewed annually by the last pay period in January. When an employee no longer needs or qualifies for an exemption, the employee must notify the employer by providing a new Form MW-4 without the previously claimed exemption. If an employee fails or refuses to provide the updated Form MW-4, the employer must withhold using the calculations for the single filing status.

(11) Exempt status claimed for federal purposes does not exempt an employee's wages from withholding requirements for Montana purposes.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2502, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 1674, Eff. 7/30/93; AMD, 1993 MAR p. 2426, Eff. 10/15/93; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.113 Payments

(1) Failure to pay withheld amounts within the time provided, and the use thereof by the employer in forwarding its own business, is considered to be an illegal conversion of trust money. Penalties provided in 15-1-216, MCA, apply to any violation of the requirement to collect, truthfully account for, and pay amounts required to be deducted from employee wages.

(2) If an employer's payment requirement of withholding tax for state purposes conflicts with the federal tax deposit requirements, the employer may elect to remit according to the federal schedule. The employer must provide the department with a copy of its federal notification.

(3) Once an employer becomes subject to withholding tax as provided in 15-30-2501, MCA, the employer must continue to withhold, and report, income tax from the employees' wages for all subsequent calendar years.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-208, 15-30-2504, 15-30-2510, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1987 MAR p. 329, Eff. 3/27/87; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.114 Annual Reconciliation and Wage Statements

(1) On or before January 31 of each year, every employer must file with the department a Form MW-3, Montana Annual W-2 1099 Withholding Tax Reconciliation. Form MW-3 must be accompanied by the original copies of each employee's earnings statements on federal Form W-2.

(a) Employee's earning statements and the federal Form W-2 must be prepared for each employee, regardless of whether or not withholding taxes were actually withheld from the employee's wages. The state non-exempt wages as provided in ARM 42.17.111 or 42.17.134 and state income tax withheld must be shown in the boxes labeled for state information.

(b) An original copy of the federal Form W-2 must be filed with the Form MW-3, and two copies must be furnished to the employee not later than January 31 of each year.

(c) Montana does not provide substitute earning statement forms or allow earning statements which do not conform to federal Form W-2 requirements.

(2) Electronic reporting of employee earnings may be allowed if in conformity with department and federal specifications.

(3) Computer-generated federal Form W-2 equivalents in printout form may be allowed by the department in lieu of W-2s or electronic media.

(4) Application to provide electronic or printout reports must be made, and department approval given, before such reports are made.

(5) The federal Form 1099R that has Montana state income tax withholding must be filed with the department in paper or electronic form by January 31 following the year that the tax was withheld.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2506, 15-30-2507, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1989 MAR p. 1846, Eff. 11/10/89; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2008 MAR p. 65, Eff. 1/18/08; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2018 MAR p. 853, Eff. 4/28/18; AMD, 2019 MAR p. 2384, Eff. 12/28/19.

Mont. Admin. R. 42.17.115 Adjustment of Errors

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-204 and 39-71-2503, MCA
History: Eff. 12/31/72; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.116 Employee's Withholding Statement

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-206, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1989 MAR p. 1846, Eff. 11/10/89; AMD, 1993 MAR p. 3045, Eff. 12/24/93; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.117 Interest

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-209 and 39-71-2503, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1991 MAR p. 1146, Eff. 7/12/91; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.119 Closing Withholding Account

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-209, MCA
History: Eff. 12/31/72; REP, 1984 MAR p. 2032, Eff. 12/28/84.

Mont. Admin. R. 42.17.120 Employer's Failure to Withhold

(1) If an employer fails to deduct and withhold the tax from wages as required under 15-30-2502, MCA, and thereafter the income tax against which the withholdings may be credited is paid, the amount required to be deducted and withheld shall not be collected from the employer. However, any payment does not relieve the employer from liability for penalties, interest, or additions to the tax because of its failure to deduct and withhold. The employer will not be relieved from its liability for payment of the amounts required to be withheld unless it can show that the income tax against which the required withholdings may be credited has been paid.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2502, 15-30-2503, MCA
History: NEW, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1986 MAR p. 1835, Eff. 10/31/86; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.121 Individual Liability

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-203, 35-10-307, 39-71-2501 and 39-71-2503, MCA
History: NEW, 1986 MAR p. 1835, Eff. 10/31/86; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Mont. Admin. R. 42.17.122 Returns of Information Agents

(1) Federal Forms 1099 and U.S. Information Returns are required to be filed as specified in 15-30-2616, MCA. Federal Forms 1099 may be filed on paper documents or electronically. The dates for filing the information returns with the department are the same as the due dates for filing the corresponding federal return.

(2) Paper documents must be prepared on the appropriate federal information return and a copy filed with the department. Returns filed on paper forms must be accompanied by a copy of federal Form 1096, Annual Summary, summarizing the information being reported to the department.

(3) Federal Forms 1099 filed electronically are to conform to the specifications outlined in Federal Publication 1220 for the applicable year.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2616, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 11, Eff. 1/15/82; AMD, 1988 MAR p. 392, Eff. 2/26/88; AMD, 1992 MAR p. 2555, Eff. 11/26/92; AMD, 1996 MAR p. 2605, Eff. 10/4/96; TRANS from ARM 42.15.311 and AMD, 2002 MAR p. 3708, Eff. 12/27/02; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.131 Employee's Withholding Allowances (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2502, MCA
History: NEW, Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1982 MAR p. 2152, Eff. 12/17/82; AMD, 1986 MAR p. 1835, Eff. 10/31/86; AMD, 1987 MAR p. 1113, Eff. 7/17/87; AMD, 1992 MAR p. 2558, Eff. 11/26/92; AMD, 1998 MAR p. 2504, Eff. 9/11/98; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2015 MAR p. 27, Eff. 1/16/15, AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2019 MAR p. 2384, Eff. 12/28/19; REP, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.132 Treatment of Vacation Allowances and Back Pay

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-201, MCA
History: NEW, Eff. 12/31/72; AMD, Eff. 10/5/74; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Mont. Admin. R. 42.17.133 Treatment of Supplemental Wages - State Income Tax Withholding

(1) If supplemental wages, such as bonuses, commissions, or overtime pay, are paid at the same time as regular wages, the state income tax to be withheld should be determined as if the total of the supplemental and the regular wages were a single wage payment for the regular payroll period.

(2) If the supplemental wages are paid at a different time, the employer may determine the state income tax to be withheld by adding the supplemental wages either to the regular wages for the current payroll period or to the regular wages for the last preceding payroll period within the same calendar year.

(3) In lieu of the above, the employer may withhold on supplemental wages at the rate of five percent.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2501, MCA
History: NEW, Eff. 12/31/72; AMD, Eff. 10/5/74; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1988 MAR p. 2404, Eff. 11/11/88; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.134 Reciprocal Agreement - North Dakota

(1) Under the terms of the Income Tax and Withholding Tax Reciprocal Agreement between Montana and North Dakota, and to the extent this agreement is in effect, an employer is not required to withhold Montana state income tax on wages earned by residents of North Dakota subject to the provisions in this rule.

(2) A North Dakota resident performing services in Montana for compensation must annually provide Form MW-4 to their employer before the employer may discontinue withholding on compensation earned in Montana. The certificate is valid from January first of the exemption year or from the date the certificate is provided to the employer whichever comes last, and until December 31 of the exemption year or until the date when the employee establishes residency in a state other than North Dakota whichever comes first.

(3) If the department determines that an employee's certificate is false or unsubstantiated, it may require an employer to disregard any claim to North Dakota residency and resume withholding on compensation earned in Montana.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2502, 15-30-2509, 15-30-2621, MCA
History: NEW, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2019 MAR p. 2384, Eff. 12/28/19.

Mont. Admin. R. 42.17.135 False Statements by Employees - Recomputation and Estimation of Withholding

(1) Where the department determines that an employee has provided a false statement through a Form MW-4, it may require the employer to deduct and withhold from the employee's current wages a recomputed amount of withholding for the current year wages of the employee based on the proper amount of withholding which would have been taken had the false filing not been made. If the employee has terminated employment and has been paid all wages earned prior to notification of required recomputation, the employer shall not be held liable for the uncollected withholding.

(2) If an employer has knowledge that a falsified Form MW-4 has been provided by the employee and fails to notify the department as required, the employer may be held liable for withholding not collected.

(3) The department may estimate the amount of non-exempt wages and withholding owed by the employer if it determines that the method used to account for non-exempt wages reported on Form W-2 or MW-3 does not accurately reflect the proportion of non-exempt wages earned by an employee. When no records have been kept, or no records are provided, the department may subject all wages to withholding, as required by 15-30-2502, MCA.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2502, 15-30-2509, MCA
History: NEW, 1982 MAR p. 296, Eff. 2/12/82; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2019 MAR p. 2384, Eff. 12/28/19.

Mont. Admin. R. 42.17.136 Affidavit - Form and Content

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-208, MCA
History: NEW, 1987 MAR p. 1643, Eff. 9/25/87; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 2001 MAR p. 1650, Eff. 8/24/01; REP, 2010 MAR p. 177, Eff. 1/15/10.

Mont. Admin. R. 42.17.137 Affidavit - Time Period for Execution

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-208, 39-71-2503, MCA
History: NEW, 1987 MAR p. 1643, Eff. 9/25/87; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; REP, 2010 MAR p. 177, Eff. 1/15/10.

Mont. Admin. R. 42.17.138 Record of Affidavit - Notice

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-208, 39-71-2503, MCA
History: NEW, 1987 MAR p. 1643, Eff. 9/25/87; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; REP, 2010 MAR p. 177, Eff. 1/15/10.

Mont. Admin. R. 42.17.145 Old Fund Liability Tax

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305 and 39-71-2503, MCA
Implementing statute(s): Sec. 39-71-2502, MCA
History: NEW, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Mont. Admin. R. 42.17.146 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305 and 39-71-2503, MCA
Implementing statute(s): Sec. 39-71-2501, MCA
History: NEW, 1993 MAR p. 3045, Eff. 12/24/93; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.147 Wages - Exceptions

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305 and 39-71-2503, MCA
Implementing statute(s): Sec. 15-30-304 and 39-71-2501, MCA
History: NEW, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Mont. Admin. R. 42.17.148 Employer's Failure to Withhold Old Fund Liability Tax

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305 and 39-71-2503, MCA
Implementing statute(s): Sec. 15-30-203, 15-30-209 and 39-71-2503, MCA
History: NEW, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Mont. Admin. R. 42.17.149 Individual Liability - Old Fund Liability Tax

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305 and 39-71-2503, MCA
Implementing statute(s): Sec. 15-30-209, 35-10-307 and 39-71-2503, MCA
History: NEW, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Subchapter 42.17.2 Withholding

Mont. Admin. R. 42.17.201 Nonresident Defined

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-105 and 15-30-228, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; REP, 1996 MAR p. 1169, Eff. 4/26/96.

Mont. Admin. R. 42.17.202 Nonresident Ad Valorem Taxpayer

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-228, MCA
History: Eff. 12/31/72; AMD, Eff. 10/5/74; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.203 Records to Be Kept by Employer

(1) Employers must keep employment records for each employee for five years from date of payment and make records available for department review, as provided by ARM 42.2.305. The records must show:

(a) For each pay period:

(i) the beginning and ending dates;

(ii) the total wages, as defined in 15-30-2501, MCA, for employment in the pay period; and

(iii) the number and date of weeks in which there were one or more employees.

(b) For each employee:

(i) the employee's full name;

(ii) social security number;

(iii) wages for each pay period, showing separately:

(A) money wages payable including special payments or constructive payment of wages;

(B) reasonable cash value of remuneration by the employer in any medium other than cash;

(D) special payments of any kind, including annual bonuses, gifts, prizes, etc.

(iv) the date on which the employee was hired, rehired, or returned to work after a temporary layoff;

(v) the date employment was terminated;

(vi) the cause of any termination, such as voluntary by employee, layoff, discharge, or death;

(vii) the method of payment:

(A) whether the employee is paid a salary or commission, or paid on an hourly, or by-piece basis; and

(B) if the employee is paid on a fixed daily basis, the employee's daily rate and the customarily scheduled days per week prevailing in the establishment for their occupation; and

(viii) documents supporting employee expense reimbursements; and

(ix) when an exemption under ARM 42.17.111 is in effect, the portion of non-exempt wages paid to the employee for each pay period, and the method used to calculate this portion.

(2) Evidence of business ownership including, but not limited to, partnership agreements and documents issued or acknowledgments by the Secretary of State.

(3) The department is authorized to examine all records necessary for the administration of the withholding and estimated tax law (Title 15, chapter 30, part 25, MCA). Examples of these records include:

(a) payroll records;

(b) disbursement records;

(d) personnel records;

(e) minutes of meetings;

(f) loan documentation;

(g) federal and state withholding exemption certificates; and

(h) any other records which might be necessary to determine employer liability.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2504, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10; AMD, 2019 MAR p. 2384, Eff. 12/28/19; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.204 Remittance of Tax by Employers

(1) The remittance schedule is established annually by the department pursuant to 15-30-2504, MCA. On or before November 1 of each year, the department shall notify the employers of the employers' remittance schedules for the following calendar year based upon the department's review of the preceding lookback period. The lookback letter will not be sent to employers whose remittance frequency for the next calendar year remains the same.

(2) Every employer must report information to the department on an approved payment voucher or upon alternative remittance methods in conjunction with the department's electronic remittance program. The department may request any information from the employer necessary for the collection of the tax.

(3) All employers must complete and return this payment voucher even if the employer did not pay any wages or withhold from employees during the pay period.

(4) Wages become subject to tax when they are actually or constructively paid. Wages must be reported in the period in which they are actually or constructively paid. Wages are constructively paid if they are credited to the employee's account and set apart for an employee so that they may be withdrawn at the employee's discretion.

(5) If a due date falls on a weekend or holiday, the next business day becomes the due date for which the payment voucher must be remitted.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2504, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10; AMD, 2010 MAR p. 2230, Eff. 9/24/10.

Mont. Admin. R. 42.17.205 Identification of Employees

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, 39-51-301, and 39-51-302, MCA
Implementing statute(s): Sec. 15-30-204, 15-30-207, 15-30-257, and 39-51-603, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; REP, 2004 MAR p. 2754, Eff. 11/5/04.

Mont. Admin. R. 42.17.206 Wages

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-201, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; REP, 2010 MAR p. 654, Eff. 3/12/10.

Mont. Admin. R. 42.17.207 Rental of Capital Assets - Not Wages

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-201, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; REP, 2010 MAR p. 654, Eff. 3/12/10.

Mont. Admin. R. 42.17.208 Employee Expenses - Not Wages

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-201, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; REP, 2010 MAR p. 654, Eff. 3/12/10.

Mont. Admin. R. 42.17.209 Juror Fees, Insurance Premiums, Annuities, Director Fees - Not Wages

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-201, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; REP, 2010 MAR p. 654, Eff. 3/12/10.

Mont. Admin. R. 42.17.210 Determination of Independent Contractor

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-305, MCA
Implementing statute(s): 15-30-201, 15-30-248, 15-30-303, MCA
History: NEW, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; REP, 2010 MAR p. 654, Eff. 3/12/10.

Mont. Admin. R. 42.17.211 Payments Subject to Withholding -- Amount to Bewithheld

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-221, MCA
History: Eff. 12/31/72; AMD, Eff. 11/3/75; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.212 Withholding Agent Registration

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-221, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.213 Report Requirements

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-222, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.214 Taxpayer Withholding Statement

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-221 and 15-30-222, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.215 Forms to File After Termination of Payments

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-221 and 15-30-222, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.216 Release of Withholding Agent

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-223, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.217 Closing Withholding Agent Account

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-221, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 296, Eff. 2/12/82.

Mont. Admin. R. 42.17.218 Employer Registration

(1) Every employer required to withhold Montana income tax must register for a Montana tax identification number on Form GenReg, Montana Department of Revenue Business Registration, which is provided by the department. A new employer who has acquired the business of another employer must not use the predecessor's identification number. The form can be submitted online through the department's website or by mailing it to the address listed on the form.

(2) Registration is not considered complete unless:

(a) the federal employer identification number appears on the registration; and

(b) all applicable social security numbers of the owners, partners, corporate officers, or other principals appear on the registration.

(3) Failure to register does not relieve an employer from withholding, reporting, and remitting state income tax.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2503, 15-30-2509, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1992 MAR p. 2558, Eff. 11/26/92; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; TRANS from ARM 42.17.112 and AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10; AMD, 2016 MAR p. 1974, Eff. 10/29/16; AMD, 2018 MAR p. 853, Eff. 4/28/18; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.219 Filings and Payments Due After Termination of Wage Payments

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2501, 15-30-2504, 15-30-2505, 15-30-2606, 15-30-2507, 15-30-2509, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; AMD, 1984 MAR p. 2032, Eff. 12/28/84; AMD, 1991 MAR p. 1146, Eff. 7/12/91; AMD, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; TRANS from ARM 42.17.118 and AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10; REP, 2015 MAR p. 27, Eff. 1/16/15.

Mont. Admin. R. 42.17.220 Closing Accounts

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 39-51-301 and 39-51-302, MCA
Implementing statute(s): 15-30-201 and 39-51-603, MCA
History: Eff. 12/31/72; AMD, 1988 MAR p. 2723, Eff. 1/1/89; TRANS from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; REP, 2004 MAR p. 2754, Eff. 11/5/04.

Mont. Admin. R. 42.17.221 Due Date and Application of Taxes

(1) Withholding taxes are due as provided in 15-30-2504, MCA.

(2) Payments are applied to tax liabilities as provided in ARM 42.2.501, unless bankruptcy proceedings or the department has determined otherwise.

(3) Payments submitted with payment vouchers are applied to the period noted on the payment vouchers. If an employer pays more than the amount owed for withholding tax on the payment vouchers, the withholding overpayment is applied to other amounts due as provided in (2). The employer may request that payments be applied to a more recent period.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-216, 15-1-708, 15-30-2641, MCA
History: Eff. 12/31/72; AMD, 1988 MAR p. 2723, Eff. 1/1/89; AMD, 1995 MAR p. 1950, Eff. 10/1/95; TRANS from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10.

Mont. Admin. R. 42.17.222 Filings and Payments Due If Employer Transfers or Discontinues Business

(1) An employer must file Form MW-3 with applicable federal Form W-2s and submit payment within 30 days after ceasing to be an employer, as defined in 15-30-2501, MCA, or ceasing activity. Ceasing activity includes, but is not limited to:

(a) quits doing business;

(b) sells or transfers the business, or the major portion of the business assets; or

(2) If the report and payment are not received within 30 days, the accrued taxes are subject to penalty and interest as provided in 15-1-216, MCA.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-1-216, 15-30-2501, 15-30-2504, 15-30-2505, 15-30-2506, 15-30-2507, 15-30-2509, MCA
History: Eff. 12/31/72; AMD, 1977 MAR p. 548, Eff. 9/24/77; AMD, 1988 MAR p. 2723, Eff. 1/1/89; TRANS from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10; AMD, 2015 MAR p. 27, Eff. 1/16/15.

Mont. Admin. R. 42.17.223 Determining Employee Status (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2523, MCA
History: NEW, 1995 MAR p. 1950, Eff. 10/1/95; TRANS from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 654, Eff. 3/12/10; REP, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.224 Status of Certain Personal Assistants

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, 39-51-301, 39-51-302, and 53-6-145, MCA
Implementing statute(s): Sec. 53-6-145, MCA
History: NEW, 2001 MAR p. 1839, Eff. 8/24/01; REP, 2004 MAR p. 2754, Eff. 11/5/04.

Subchapter 42.17.3 Estimated Tax Payments

Mont. Admin. R. 42.17.301 Computation of Estimated Tax

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-241, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 296, Eff. 2/12/82; REP, 1992 MAR p. 2778, Eff. 12/25/92.

Mont. Admin. R. 42.17.302 Amended Declaration

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-241 and 15-30-242, MCA
History: Eff. 12/31/72; REP, 1992 MAR p. 2778, Eff. 12/25/92.

Mont. Admin. R. 42.17.303 Extension of Filing Time

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-241, MCA
History: Eff. 12/31/72; AMD, Eff. 11/3/75; REP, 1992 MAR p. 2778, Eff. 12/25/92.

Mont. Admin. R. 42.17.304 Determination of Tax Liability for Preceding Tax Year; Determination of Tax Paid for Current Tax Year

(1) A taxpayer's tax liability for the preceding tax year is the total tax imposed by Title 15, chapter 30, MCA, less any nonrefundable tax credits allowed under Montana law, as shown on the taxpayer's return.

Example: A taxpayer has a tax, before applying nonrefundable credits, of $5,000. The taxpayer has a nonrefundable recycling credit of $500. The taxpayer's tax liability for the prior year for estimated tax purposes is $4,500 computed as follows:

Tax before nonrefundable credit | $5,000 nonrefundable credits | ( $500) tax liability | $4,500

(2) The amount of tax paid for the current year is the sum of the withholding and estimated tax payments plus any refundable credit(s) claimed, as shown on the taxpayer's return.

A taxpayer has $800 in Montana withholding, an elderly homeowner/renter credit of $400 and paid $200 in estimated payments. The amount of tax the taxpayer has paid for the current year is $1,400 computed as follows:

Montana tax withheld | $800 Estimated payments | $200 Refundable elderly homeowner/renter credit | $400 Total taxes paid for the current year | $1,400

(3) To determine the preceding tax year liability of an individual who participates in a composite return, the following requirements apply:

(a) For a taxpayer who was a participant in a composite return for the preceding year, the tax liability for the preceding year is the participant's preceding year composite tax liability.

(b) For a taxpayer who filed a Montana individual income tax return for the preceding tax year and for the current year, and participated in a composite return filing, their tax liability for the preceding tax year is their individual liability as determined in (1).

(4) Estimated payments made by a partnership or S corporation for taxes owed under Title 15, chapter 30, MCA, are not taxes paid by the owner for the current tax year.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2008 MAR p. 65, Eff. 1/18/08; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.305 Estimated Tax and Payment of Installments

(1) Except as provided in 15-30-2512, MCA, a taxpayer is required to pay at least 100 percent of their tax liability for the preceding tax year or 90 percent of their tax for the current tax year through withholding and estimated payments. If they do not, they will be liable for interest on the underpayment, as provided in 15-30-2512, MCA. In addition, unless the department grants a taxpayer an extension to pay an installment of estimated tax, as provided in ARM 42.17.306, a taxpayer required to make installment payments of estimated tax who fails to timely pay an installment is liable for interest on the unpaid installment from the due date of the installment to the earlier of the date of payment or the due date of their income tax return, not including extensions, as provided in 15-1-216, MCA, and ARM 42.2.306.

(2) Taxpayers may complete the Worksheet ESW, Montana Individual Estimated Income Tax Worksheet, to determine if they are required to make current year installment payments of estimated tax and, if necessary, to determine the amount. If a taxpayer's income fluctuates or is seasonal, employing the annualization method may lower the amount of one or more installments. A taxpayer using the optional annualization method must complete the Worksheet ESA, Annualization Worksheet. Taxpayers are not required to file the estimated tax worksheet with their income tax return, but it is a tax record the taxpayer must retain and provide the department on request. Taxpayers using the annualization method must file Worksheet ESA with their income tax return. If the taxpayer files their individual income tax return electronically, the Worksheet ESA is a tax record the taxpayer must retain and provide the department on request.

(3) Estimated tax payments are not required for a tax year shorter than four months. Individuals who have a short tax year of four months or more are required to pay estimated tax on the following dates:

(a) The first installment is due on April 15 or on the 15th day of the fourth month of the tax year;

(b) The second and third installments are due on the 15th day of the sixth month of the tax year and the 15th day of the ninth month of the tax year if the short tax year does not close prior to these dates; and

(4) If fewer than four installments are required, the applicable percentage of the required annual amount for each installment is increased. The applicable percentage per installment is as follows:

(a) 100 percent for one installment;

(b) 50 percent for two installments; and

Example 1: If the short tax year is the 10-month period from January 1 through October 31, the estimated tax must be paid in four installments, on April 15, June 15, September 15, and November 15. Each installment is 25 percent of the total payment required.

Example 2: If the short tax year is the 9-month period from January 1 through September 30, the estimated tax must be paid in three installments, on April 15, June 15, and October 15. With three installments, each installment is 33 1/3 percent of the total payment required.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2008 MAR p. 65, Eff. 1/18/08; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.306 Written Request for Extension - Payment of Estimated Tax

(1) A taxpayer may request an extension of time to pay all or a part of an installment of estimated taxes by making a written request identifying the evidence showing that undue hardship would result to the taxpayer if the extension were refused. The extension will not be granted under a general statement of "hardship."

(2) The request for extension must be received by the department 30 days before the installment date for which the extension is requested. The department will, within 30 days if possible, grant, deny, or tentatively grant the request subject to certain conditions.

(3) If an extension is granted, no further notice or demand will be given, and the taxpayer must pay the estimated payment on or before the expiration of the period of the extension. If an extension is granted and the extended installment timely paid, the penalty and interest provided in 15-1-216, MCA, is not imposed. Section 15-30-2512, MCA, which provides for interest on an underpayment of tax, is in addition to the uniform penalties and interest provided in 15-1-216, MCA, and is imposed whether or not a taxpayer obtains an extension as provided in this rule.

(4) While the department may grant an extension of up to six months after the installment due date, it will not grant an extension beyond the original due date of the return, typically April 15 following the tax year.

(5) The granting of an extension of time for payment of one installment does not extend the time for payment of any subsequent installments.

(6) Inability to pay does not constitute "hardship."

(7) Examples of what does, and what does not, constitute "hardship" may be found in ARM 42.3.106.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.307 Amendments of Previous Installments

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-30-241, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; REP, 2004 MAR p. 2754, Eff. 11/5/04.

Mont. Admin. R. 42.17.308 Determining Annualized Income

(1) Taxpayers who use the annualization option to estimate the current year tax must accurately determine the amount of income and deductions for each installment period.

(2) Income or expenses that are paid occasionally during a year cannot be spread out during the year in determining the required installments. For example, a taxpayer who distributes year-end bonuses to employees but does not determine the amount of the bonuses until the last month of the tax year may not deduct any portion of such year-end bonuses in determining taxable income for any installment period other than the final installment period for the tax year, since deductions are not allowable until paid or accrued, depending on the taxpayer's method of accounting.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.309 Annualized Periods

(1) For a calendar taxpayer, the annualization periods are January through March, January through May, January through August, and January through December of the tax year.

(2) For fiscal year taxpayers, the annualization periods all begin on the first day of the taxable year and end on the last day of the third, fifth, eighth and twelfth months following the beginning of the taxable year.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10.

Mont. Admin. R. 42.17.310 Determination of Tax Liability - Status Change from Joint to Separate (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; REP, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.311 Determination of Tax Liability - Status Change from Separate to Either a Joint Return or Married Filing Separate (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; REP, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.312 Estimated Tax Payments - Divorce

(1) Joint estimated income tax payments made by married individuals who are divorced at the end of the tax year or who are legally separated at the end of a tax year for which they do not file a joint return must be split equally unless the individuals enter into a written agreement, signed by each, providing a different division. By filing a return claiming other than an equal share of joint estimated income tax payments, a taxpayer represents that a written agreement signed by both parties, as provided in this rule has been executed.

(2) Duly executed copies of the agreement are tax records and the taxpayer must retain and provide the department with copies on request.

(3) The division of jointly filed estimated payments as provided in this rule does not relieve either taxpayer from the liability for interest on any underpayment.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10.

Mont. Admin. R. 42.17.313 Payment of Estimated Tax - Decedent

(1) Joint estimated tax payments may not be made after the death of either spouse. The surviving spouse must recompute his or her estimated tax for the remainder of the year and pay separate installments for each remaining installment due date.

(2) Estimated tax payments are not required after the date of death for a deceased taxpayer.

(3) If a joint return is filed for the last tax year, the taxpayers' joint estimated tax payments may be applied on the return.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.314 Nonresidents and Part-Year Residents

(1) A nonresident or part-year resident who was not required to file a Montana individual income tax return for the previous tax year is not required to pay estimated taxes. ARM 42.15.301 sets forth the rules for determining who must file an individual income tax return.

(2) Part-year residents moving out of Montana, other than those in (1), are required to pay.

(3) Part-year residents moving in or out of Montana are not considered to have a short taxable year unless they have a short taxable year on their federal return.

(4) A participant in a composite return for the preceding tax year must pay estimated tax for the current tax year as provided in ARM 42.17.305 if they are not a participant in a composite return for the current tax year.

(5) A participant in a composite return for the current tax year is not required to pay estimated tax for the current tax year. The rules for filing composite returns are located in ARM Title 42, chapter 9, subchapter 2.

(6) A partnership or S corporation must pay estimated tax for the current tax year for each participant included in the filing of the current year composite return.

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10.

Mont. Admin. R. 42.17.315 Waiver of Interest on Estimated Tax Underpayment (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; REP, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.316 Trusts, Estates, and Fiduciary Returns

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 1992 MAR p. 2778, Eff. 12/25/92; AMD, 2004 MAR p. 2754, Eff. 11/5/04; AMD, 2010 MAR p. 177, Eff. 1/15/10; REP, 2016 MAR p. 22, Eff. 1/9/16.

Mont. Admin. R. 42.17.317 Estimated Payments for Married Taxpayers Filing Separate Returns (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-30-2620, MCA
Implementing statute(s): 15-30-2512, MCA
History: NEW, 2008 MAR p. 65, Eff. 1/18/08; AMD, 2010 MAR p. 177, Eff. 1/15/10; REP, 2024 MAR p. 2324, Eff. 9/21/24.

Authorizing statute(s): Sec. 15-30-305 and 39-71-2503, MCA
Implementing statute(s): Sec. 39-71-2503, MCA
History: NEW, 1993 MAR p. 3045, Eff. 12/24/93; AMD, 1996 MAR p. 1169, Eff. 4/26/96; REP, 2001 MAR p. 1650, Eff. 8/24/01.

Authorizing statute(s): Sec. 15-30-325 and 39-51-301, MCA
Implementing statute(s): Sec. 15-30-204, 39-51-301, and 39-51-302, MCA
History: Eff. 12/31/72; AMD, 1977 MAR p. 547, Eff. 9/24/77; AMD, 1988 MAR p. 2723, Eff. 1/1/89; TRANS from Dept. of Labor and Industry and AMD, 2001 MAR p. 1650, Eff. 8/24/01; REP, 2004 MAR p. 2754, Eff. 11/5/04.

Subchapter 42.17.6 Mineral Royalty Withholding

Mont. Admin. R. 42.17.601 Advance Payments and Further Distributions

(1) Advance mineral royalty payments that relate to, refer to, or concern production are subject to the mineral royalty tax withholding requirements.

(2) Each remitter who disburses funds that are owed to any person owning a royalty interest, overriding royalty interest, production payment, or any other nonworking interest in minerals produced in this state, is subject to the withholding requirement of 15-30-2538, MCA. The exceptions under 15-30-2539(2), MCA, do not apply to remitters who are not producers.

(3) If a mineral is taken in-kind by a royalty owner, the take-in-kind owner must forward six percent of the net value of the mineral that was taken in-kind to the department unless they are exempt from withholding under 15-30-2539 or 15-31-102, MCA.

(4) Remitters providing accounting services that fulfill the requirements of 15-30-2541, MCA, for more than one producer must remit separate withholding payments and submit a separate Form RW-3, Montana Mineral Royalty Withholding Tax Reconciliation Return, for each producer.

History

Authorizing statute(s): 15-30-2547, MCA
Implementing statute(s): 15-30-2538, 15-30-2539, 15-30-2541, 15-31-102, MCA
History: NEW, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.602 Claiming the Credit for Tax Withheld

(1) Claiming credit for the tax withheld shall be accomplished as follows:

(a) Credit may be claimed for the tax withheld on a Montana individual income tax return or a Montana corporate income tax return, with a copy of Form 1099-MISC attached, to substantiate the amount claimed.

(b) Taxpayers, excluding pass-through entities, that receive a Montana Schedule K-1 from a pass-through entity, as defined in 15-30-2101, MCA, may claim a refundable credit for the amount shown as their share of the tax withheld from Montana net royalty. Taxpayers that claim such a credit must keep copies of the federal and Montana Schedule K-1(s) in their records.

(c) Pass-through entities must determine the owner's distributive share of mineral royalty withholding in proportion of the owner's share of profit and loss from the pass-through entity.

(d) A pass-through entity must claim the mineral withholding tax paid on its behalf as a refundable credit against pass-through entity tax owed by the entity.

(e) A pass-through entity must claim the mineral withholding tax paid on its behalf as a refundable credit against composite tax owed by the pass-through entity on behalf of an owner in proportion of the owner's distributive share of income or loss.

(f) A pass-through entity may claim mineral royalty withholding tax paid on its behalf as a credit against pass-through withholding tax owed by the entity on behalf of an owner in proportion of the owner's distributive share of profit or loss.

(g) An estate or trust is entitled to credit for the tax withheld in proportion to the amount of royalty income that the estate or trust includes in Montana taxable income. A beneficiary is entitled to a credit for the tax withheld in proportion to the amount of royalty income the beneficiary must report on their Montana individual income tax return.

(h) Any person filing on a fiscal year ending other than December 31, must claim a credit for the withholding tax shown on the personal income tax return required to be filed during the year following the December closing period of the Form RW-3, Montana Mineral Royalty Withholding Tax Reconciliation Return.

(i) Production taxes cannot be claimed as withholding for mineral royalty withholding or as income tax withholding.

History

Authorizing statute(s): 15-30-2547, MCA
Implementing statute(s): 15-30-2539, 15-30-3312, 15-30-3313, MCA
History: NEW, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2018 MAR p. 853, Eff. 4/28/18; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.603 Applicable Thresholds - Change of Ownership - Publicly Traded Partnerships - Nonprofit Organizations - Exempt Royalty Owners

(1) There is not a requirement to withhold from payments to royalty interest owners if the producing entity's production does not exceed 100,000 barrels of oil and 500 million cubic feet of gas, based on the previous three calendar years' average production reported to the Montana Board of Oil and Gas Conservation. For example, the department will calculate whether payments for an entity's production are subject to withholding from their royalty interest owners for 20X5 by averaging the production numbers for calendar years 20X1, 20X2, and 20X3 and comparing this average to the production exemption limits.

(2) If an entity does not have three years of recent mineral production records, the remitter may provide the department with information supporting the exemption from the withholding requirements of 15-30-2536, MCA. The department shall review this information to determine if an exemption is warranted and notify the remitter of the determination.

(3) On or before September 15 of each year, the department shall notify all oil and gas producers of their requirements as it relates to the provisions of 15-30-2538 and 15-30-2539, MCA. The department will notify all other mineral producers by September 15 only if they are required to withhold.

(4) If a person who is required to withhold on behalf of their royalty interest owners sold their mineral interests during the year and ceases to be the remitter, the person who acquired the mineral interests becomes the remitter and must continue to withhold six percent of the net royalty payments from the royalty interest owners subject to the withholding requirements of 15-30-2538, MCA.

(5) If a remitter produces both oil and gas, and only one resource meets the requirements for withholding as provided in 15-30-2539, MCA, the withholding provisions apply to both oil and gas regardless of the production volumes of the other resource that does not meet the requirements of 15-30-2539, MCA.

(6) If a person not previously extracting resources in the state begins extracting from new or existing sources of natural resources in Montana (i.e., newly drilled oil or gas wells or a new mine), that person is required to withhold six percent of the net royalty payments from the royalty interest owners subject to the withholding requirements of 15-30-2538, MCA.

(7) All persons that extract minerals other than oil and gas must withhold six percent of the net royalty payments of all royalty interest owners subject to the withholding requirements of 15-30-2538, MCA.

(8) The person described in (7) may not be required to withhold net royalty payments from their royalty interest owners if the person can provide information that satisfies the department that the net royalty payments are immaterial.

(a) The department has defined an entity that has immaterial net royalty payments as an entity that has production amounts for minerals, other than oil and gas, with a value less than $5 million. The only filing requirement for this type of entity is the filing of the Form RW-3 along with a listing of all royalty recipients. The $5 million value will be based on a three-year average of production value reported to the department's Natural Resources Unit. For example, the department will calculate whether an entity is required to withhold from its royalty interest owners for 20X7 by averaging the valuation reported for 20X3, 20X4, and 20X5.

(9) Section 15-30-2539, MCA, allows for a publicly traded partnership to be exempt from the withholding requirements of 15-30-2536 through 15-30-2547, MCA, provided the publicly traded partnership, that is a royalty owner, submits a report to both the remitter and the department. The report, which can be in the form of a letter, must contain the publicly traded partnership's letterhead and state that the partnership is publicly traded and the partnership requests exemption from 15-30-2536 through 15-30-2547, MCA. The request must be received by the remitter and the department prior to November 1 of the year prior to the calendar year in which the partnership requests exemption. Upon receipt of the report, the department will notify the partnership and the remitter of either acceptance or denial of the request within 30 days. The election does not need to be repeated annually unless requested by the department.

(10) Section 15-30-2539, MCA, allows for an organization that is exempt from taxation under 15-31-102, MCA, to be exempt from the withholding requirements of 15-30-2536 through 15-30-2547, MCA, provided the exempt organization, that is a royalty owner, submits a report to both the remitter and the department. The report, which can be in the form of a letter, must contain the exempt organization's letterhead and request exemption from 15-30-2536 through 15-30-2547, MCA. The request must be received by the remitter and the department prior to November 1 of the year prior to the calendar year in which the exempt organization requests exemption. Upon receipt of the report, the department shall notify the exempt organization and the remitter of either acceptance or denial of the request within thirty days. The election does not need to be repeated annually unless requested by the department.

(11) The exception provided in 15-30-2539, MCA, for payments to a federally recognized Indian tribe, applies to all mineral production described in the Mineral Leasing Act of 1938.

(12) According to 15-30-2539, MCA, the department grants remitters the authority to forego withholding the tax from royalty owners who meet the following qualifications:

(a) the amount of the royalty interest payment is less than $2,000 per year; or

(b) less than $166 per month.

(13) The remitter that does not withhold from royalty interest owners pursuant to (12) may, upon request from the department, be required to provide a list of the royalty interest owners.

History

Authorizing statute(s): 15-30-2547, MCA
Implementing statute(s): 15-30-2538, 15-30-2539, 15-30-2540, 15-30-2541, 15-30-2542, 15-30-2543, 15-30-2544, 15-30-2545, 15-30-2546, 15-30-2547, 15-31-102, MCA
History: NEW, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2018 MAR p. 853, Eff. 4/28/18; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.604 Registration for Withholding

(1) Every entity that extracts natural resources within the boundaries of Montana must register and file an application for a state identification number as prescribed in ARM 42.17.218.

(2) Any owner or operator who has acquired the business of another entity shall not use the predecessor's state identification number. The owner or operator must register before the due date of the first report. This applies to both new businesses and businesses which have been purchased.

(3) Each registration application must contain the applicable tax identification number assigned by the IRS.

(4) No registration is considered complete unless the federal identification number appears on the form.

(5) Not being registered does not relieve a remitter from the collection and reporting requirements.

History

Authorizing statute(s): 15-30-2547, MCA
Implementing statute(s): 15-30-2538, 15-30-2541, MCA
History: NEW, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2024 MAR p. 2324, Eff. 9/21/24.

Mont. Admin. R. 42.17.605 Filing Requirements

(1) The following forms are to be completed and filed in accordance with instructions provided by the department:

(a) Form RW-1, Mineral Royalty Withholding Payment Voucher, must be filed quarterly unless the department establishes that the entity is exempt from the withholding requirements of 15-30-2538, MCA. A remitter may request to file a Form RW-1 on an accelerated basis. The remitter must receive approval from the department before remitting the withholding tax on a more frequent basis than quarterly;

(b) A remitter who has no withholding to remit for a remittance period shall, on or before the due date, send a payment voucher showing that a zero amount is being remitted;

(c) Form RW-3, Montana Annual Mineral Royalty Withholding Tax Reconciliation, must be filed on or before January 31 of each year. Form RW-3 must be accompanied by copies of each royalty owner's withholding statements on federal form 1099-MISC, Miscellaneous Income, or Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding;

(d) On or before January 31 of each year, Form 1099-MISC, Miscellaneous Income, or Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, shall be furnished by the remitter to each person who has received royalties in each calendar year;

(e) Each remitter that is exempt from withholding is still required to file the Form RW-3 with the department along with a copy of Form 1099-MISC, Miscellaneous Income, or Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, for every recipient of royalties. These reports are due on or before January 31 of each year; and

(f) A substitute for Form 1099-MISC may be filed with the department provided it:

(i) generally follows the guidelines in federal Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098, 1099, 5498, and Certain Other Information Returns; and

(ii) reports all the information regarding Montana royalty payments as required in 15-30-2543, MCA, and the rules in this subchapter.

(2) Electronic filing requirements for state purposes are the same as those mandated for federal purposes.

(3) If a remitter does not withhold on a royalty interest owner who in the previous year met the exemption requirement in 15-30-2539, MCA, but exceeded that requirement in the current year, the department will not penalize the remitter for the lack of withholding in that current year.

History

Authorizing statute(s): 15-30-2547, MCA
Implementing statute(s): 15-30-2538, 15-30-2539, 15-30-2541, 15-30-2543, 15-30-2544, MCA
History: NEW, 2007 MAR p. 2151, Eff. 12/21/07; AMD, 2010 MAR p. 177, Eff. 1/15/10; AMD, 2012 MAR p. 2640, Eff. 12/21/12; AMD, 2015 MAR p. 27, Eff. 1/16/15; AMD, 2018 MAR p. 853, Eff. 4/28/18.

Chapter 42.18 Montana Appraisal Plan

Subchapter 42.18.1 General Provisions

Mont. Admin. R. 42.18.101 Montana Appraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; REP, 1990 MAR p. 594, Eff. 3/30/90.

Mont. Admin. R. 42.18.102 Residential and Commercial Appraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; REP, 1990 MAR p. 594, Eff. 3/30/90.

Mont. Admin. R. 42.18.103 Agricultural and Timber Appraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; REP, 1990 MAR p. 594, Eff. 3/30/90.

Mont. Admin. R. 42.18.104 Industrial Appraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; REP, 1990 MAR p. 594, Eff. 3/30/90.

Mont. Admin. R. 42.18.105 Montana Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, 15-7-133, 15-7-134, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1992 MAR p. 2078, Eff. 9/11/92; AMD, 1993 MAR p. 160, Eff. 1/29/93; AMD, 1993 MAR p. 2127, Eff. 9/17/93; REP, 1996 MAR p. 3149, Eff. 12/6/96.

Mont. Admin. R. 42.18.106 2003 Montana Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2011 MAR p. 1395, Eff. 7/29/11; REP, 2012 MAR p. 2641, Eff. 12/21/12.

Mont. Admin. R. 42.18.107 2009 Montana Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2008 MAR p. 2006, Eff. 9/12/08; AMD, 2011 MAR p. 1395, Eff. 7/29/11; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.108 Residential Appraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1992 MAR p. 2078, Eff. 9/11/92; AMD, 1993 MAR p. 2127, Eff. 9/17/93; REP, 1996 MAR 3149, Eff. 12/6/96.

Mont. Admin. R. 42.18.109 2003 Residential Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2005 MAR p. 2469, Eff. 12/9/05; REP, 2012 MAR p. 2641, Eff. 12/21/12.

Mont. Admin. R. 42.18.110 2009 Residential Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2005 MAR p. 2469, Eff. 12/9/05; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2008 MAR p. 2006, Eff. 9/12/08; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.111 Commercial Appraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1992 MAR p. 2078, Eff. 9/11/92; AMD, 1993 MAR p. 2127, Eff. 9/17/93; REP, 1996 MAR p. 3149, Eff. 12/6/96.

Mont. Admin. R. 42.18.112 2003 Commercial Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2006 MAR p. 3101, Eff. 12/22/06; REP, 2012 MAR p. 2641, Eff. 12/21/12.

Mont. Admin. R. 42.18.113 2009 Commercial Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2005 MAR p. 2469, Eff. 12/9/05; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2008 MAR p. 2006, Eff. 9/12/08; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.114 Agricultural/Forest Land Appraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1992 MAR p. 2078, Eff. 9/11/92; AMD, 1993 MAR p. 2127, Eff. 9/17/93; REP, 1996 MAR p. 3149, Eff. 12/6/96.

Mont. Admin. R. 42.18.115 2003 Agricultural/Forest Land and Improvements Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-201, 15-44-103, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; REP, 2012 MAR p. 2641, Eff. 12/21/12.

Mont. Admin. R. 42.18.116 2009 Agricultural/Forest Land and Improvements Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2006 MAR p. 3101, Eff. 12/22/06; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.117 Industrial Property Appraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1993 MAR p. 2127, Eff. 9/17/93; REP, 1996 MAR p. 3149, Eff. 12/6/96.

Mont. Admin. R. 42.18.120 Certification and Training Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 2000 MAR p. 3562, Eff. 12/22/00; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.121 Purpose; Adoption of Montana Reappraisal Plan and Manuals; Valuation Cycles

(1) This rule pertains to the department's statutorily required reappraisal plan and related property classification and valuation manuals for each valuation cycle. The Montana Reappraisal Plan (Plan) provides an overview of the department's duty to complete uniform valuations of all taxable real property. The manuals referenced in (3) describe department processes used in the classification and valuation of residential land and improvements, commercial land and improvements, industrial land and improvements, agricultural land, and forest land.

(2) The department will use its computer assisted mass appraisal (CAMA) system to assist in its valuation processes and will consider the sales comparison approach, cost approach, and income approach in its determination of a property's market value. The department shall use the approach or approaches based on the type of property and the quantity and quality of data available.

(3) The department adopts and incorporates by reference the Plan, the Montana Residential, Commercial, and Industrial Property Classification and Valuation Manual, the Montana Agricultural Land Classification and Valuation Manual, and the Montana Forest Land Classification and Valuation Manual, all dated January 1, 2025. Each manual explains how the department classifies and values subject property types. A copy of the Plan and the manuals may be obtained from the Department of Revenue, Property Assessment Division, P.O. Box 8018, Helena, MT 59604-8018, and on the department's web site at https://mtrevenue.gov/publications/property-reappraisal-plan-manuals.

(4) Class four residential, commercial, and industrial property is appraised at its market value as of January 1, 2024, for the 2025-2026 valuation cycle.

(5) Class three agricultural land is appraised at its productivity value as of January 1, 2024, for the 2025-2026 valuation cycle. Agricultural land values reflect productivity values in accordance with 15-7-201, MCA.

(6) Class ten forest land is appraised at its productivity value as of January 1, 2024, for the 2025-2026 valuation cycle. Forest land values reflect productivity values in accordance with 15-44-103, MCA.

(7) For the purposes of these rules, the terms "reappraisal cycle" and "valuation cycle" are considered synonymous and interchangeable.

History

Authorizing statute(s): 15-1-201, 15-7-111, 15-7-201, MCA
Implementing statute(s): 15-7-101, 15-7-103, 15-7-111, 15-7-112, 15-7-201, 15-44-103, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2005 MAR p. 2469, Eff. 12/9/05; AMD, 2010 MAR p. 2229, Eff. 9/24/10; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2018 MAR p. 2410, Eff. 1/1/19; AMD, 2021 MAR p. 71, Eff. 1/16/21; AMD, 2023 MAR p. 43, Eff. 1/14/23; AMD, 2024 MAR p. 2641, Eff. 1/1/25.

Mont. Admin. R. 42.18.122 2017-2018 Montana Reappraisal Plan, Appraisal Guide, and 2017-2018 Montana Agricultural Land Classification Manual

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2005 MAR p. 2469, Eff. 12/9/05; AMD, 2008 MAR p. 2006, Eff. 9/12/08; AMD, 2010 MAR p. 2229, Eff. 9/24/10; AMD, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2016 MAR p. 2339, Eff. 1/1/17; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.123 Manuals

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1992 MAR p. 2078, Eff. 9/11/92; AMD, 1993 MAR p. 160, Eff. 1/29/93; AMD, 1993 MAR p. 2127, Eff. 9/17/93; REP, 1996 MAR p. 3149, Eff. 12/6/96.

Mont. Admin. R. 42.18.124 Valuation Periods

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-6-134, 15-7-103, 15-7-111, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2001 MAR p. 463, Eff. 3/23/01; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2005 MAR p. 2469, Eff. 12/9/05; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2008 MAR p. 2006, Eff. 9/12/08; AMD, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2013 MAR p. 2445, Eff. 12/27/13; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2015 MAR p. 2040, Eff. 11/13/15; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.125 Extension of Time for Landowners to Respond to Access Notices from Department

(1) Prior to November 30 of each year, the department shall publish in a newspaper of general circulation in each county a notice stating that the department may be entering private property for the purpose of appraising or auditing property. Each county treasurer shall annually include that same notification with the property tax bills when they are mailed to the registered landowner.

(2) The landowner or the landowner's agent has a right to be present when the property valuation staff conducts the audit or appraisal work. Except for the provision stated in (4) , the landowner or landowner's agent must assert that right by mailing notification to the local department field office within 30 days following the date of publication in the newspaper.

(3) The written notice must provide the following information:

(a) landowner or landowner's agent's full name;

(b) mailing address;

(d) a telephone number that the appraiser or auditor can call to contact the landowner or landowner's agent during normal business hours.

(4) The notification may be made any time prior to a property valuation staff's visit to the private property. If notification is mailed after the 30-day period specified in (2) , it must be received by the local department field office prior to the date of the visit.

(5) Upon receipt of the written notice from the landowner or the landowner's agent, property valuation staff shall contact the landowner or the landowner's agent and schedule an appointment during normal business hours.

History

Authorizing statute(s): 15-7-139, 15-7-140, MCA
Implementing statute(s): 15-7-139, 15-7-140, MCA
History: NEW, 2003 MAR p. 1004, Eff. 5/9/03; AMD, 2006 MAR p. 3101, Eff. 12/22/06.

Mont. Admin. R. 42.18.126 Progress Reporting

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 594, Eff. 3/30/90; AMD, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; REP, 2000 MAR p. 3562, Eff. 12/22/00.

Mont. Admin. R. 42.18.127 Property Tax Fee Appraisal Requirements When Taxpayer Denies the Department Access to Property to Conduct an Appraisal and/or Audit

(1) For the department to consider a fee appraisal as an estimate of market value, as provided in 15-7-139, MCA, the appraisal must:

(a) be completed by an appraiser licensed or certified by the Montana Board of Real Estate Appraisers under Title 37, chapter 54, MCA;

(b) be conducted in accordance with current uniform standards of professional appraisal practice (USPAP) as set forth for licensed or certified real estate appraisers under 37-54-403, MCA;

(c) be conducted within one year of the valuation date provided in 15-7-103, MCA, and ARM 42.18.121. This one-year requirement may necessitate that a fee appraiser conduct a retroactive appraisal, in accordance with USPAP. In this situation, the effective date of the appraisal may be prior to the date of the appraisal report. If an appraisal has already been conducted, and it was conducted prior to the valuation date, then:

(i) a recertification or update of value may be required as an addendum to the original appraisal; and

(ii) the recertification or update of value must be completed by the same appraiser who conducted the original appraisal; and

(d) establish a separate market value for each improvement and the land:

(i) If the appraisal was conducted for a single-family dwelling, the sales comparison approach and cost approach must be included. The cost approach must document the land value, the value of each single-family dwelling, and all outbuildings. If the appraiser chooses the sales comparison approach as the best indicator of value, then the appraiser must specifically state the contributory value of the land to the reconciled value.

(ii) If the appraisal was conducted for a commercial property, the income approach, sales comparison approach, and the cost approach must all be included. The cost approach must document the land value, the value of each commercial structure, and all ancillary buildings and site improvements. If the appraiser chooses either the income approach or the sales comparison approach as the best indicator of value, then the appraiser must specifically state the contributory value of the land to the reconciled value.

History

Authorizing statute(s): 15-1-201, 15-7-139, MCA
Implementing statute(s): 15-7-139, 37-54-403, MCA
History: NEW, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.128 Definitions

The following definitions apply to terms used in this subchapter:

(1) "Ancillary" means buildings of secondary importance in comparison to the primary residence including, but not limited to, garage and storage sheds.

(2) "CALP" means a computer assisted land pricing system and refers to the property valuation system program which provides the user with the ability to input the various land pricing parameters for use in the valuation of residential and commercial property.

(3) "CAMA" means the Computer Assisted Mass Appraisal system the department uses to administer and value real and personal property.

(4) "Immediate family member" means a spouse and any member of the household, or any parent, child, grandparent, grandchild, or corresponding in-law.

(5) "Owner's agent" means:

(a) an immediate family member of the property owner;

(b) an employee of the property owner;

(d) the property owner's legal representative or guardian;

(e) the property owner's partner;

(f) trustee, if the owner of record is a trust;

(g) officer or member, if the owner of record is a corporation;

(h) officer or member, if the owner of record is an association.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2007 MAR p. 2155, Eff. 12/21/07; AMD, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2015 MAR p. 2040, Eff. 11/13/15; AMD, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.129 Permission by the Owner or Owner's Agent to Enter Improvements and Personal Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-7-111, MCA
Implementing statute(s): 15-7-139, MCA
History: NEW, 2006 MAR p. 3101, Eff. 12/22/06; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.130 Purpose of the 2015 Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-9-101, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.131 Specific Objectives of the 2015 Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-101, 15-7-111, 15-7-112, 15-9-101, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; REP, 2014 MAR p. 2990, Eff. 12/12/14.

Mont. Admin. R. 42.18.132 Additional Rules to Supplement Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-9-101, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; REP, 2015 MAR p. 2040, Eff. 11/13/15.

Mont. Admin. R. 42.18.133 2015 Montana General Reappraisal Plan

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-7-201, 15-9-101, 15-44-103, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; REP, 2016 MAR p. 2339, Eff. 1/1/17.

Mont. Admin. R. 42.18.134 2017-2018 Residential and Commercial Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-7-201, 15-9-101, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2016 MAR p. 2339, Eff. 1/1/17; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.135 2015 Forest Land Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-7-201, 15-9-101, 15-44-103, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2016 MAR p. 2339, Eff. 1/1/17; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.136 2017-2018 Industrial Property Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2014 MAR p. 2990, Eff. 12/12/14; AMD, 2016 MAR p. 2339, Eff. 1/1/17; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.137 2017-2018 Agricultural Land Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-7-201, 15-9-101, MCA
History: NEW, 2016 MAR p. 2339, Eff. 1/1/17; REP, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.18.150 Official Record for Real and Personal Property

(1) The real property record and personal property record located in the Computer Assisted Mass Appraisal System (CAMAS) is the department's official record.

(2) The current year of the appraisal cycle and the latest version of the property record in CAMAS is the most current data.

(3) Historical or hard copies of property record cards, field notes, or residential or commercial data collection documents are not considered part of the official record unless recorded as such in the current year of the appraisal cycle and on the most recent electronic version of the property record.

History

Authorizing statute(s): 15-1-201, 15-7-306, MCA
Implementing statute(s): 15-7-101, 15-7-304, MCA
History: NEW, 2014 MAR p. 1104, Eff. 5/23/14.

Subchapter 42.18.2 Appraiser Certification Requirements

Mont. Admin. R. 42.18.201 Residential Property Certification Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; AMD, 1996 MAR p. 3149, Eff. 12/6/96; REP, 2000 MAR p. 3562, Eff. 12/22/00.

Mont. Admin. R. 42.18.202 Commercial Property Certification Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; AMD, 1996 MAR p. 3149, Eff. 12/6/96; REP, 2000 MAR p. 3562, Eff. 12/22/00.

Mont. Admin. R. 42.18.203 Agricultural Property Certification Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; AMD, 1996 MAR p. 3149, Eff. 12/6/96; REP, 2000 MAR p. 3562, Eff. 12/22/00.

Mont. Admin. R. 42.18.204 Industrial Property Certification Requirements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; REP, 2000 MAR p. 3562, Eff. 12/22/00.

Mont. Admin. R. 42.18.205 Definitions

The following definitions apply to this subchapter:

(1) "Agricultural appraiser" means a person who has completed the necessary training and is certified to appraise agricultural and forest property in Montana.

(2) "Agricultural land classification/appraisal (ALCA) training" means specific training outlined by the department to meet the certification requirements necessary to appraise agricultural and forest property in Montana.

(3) "Appraiser Qualifications Board" means the federal regulatory agency responsible for establishing qualifications nationwide for fee appraisers.

(4) "Commercial appraiser" means a person who has completed the necessary training and is certified to appraise commercial property in Montana.

(5) "Failure to perform the appraisal work satisfactorily" refers to the work that is produced by the appraiser and is determined to be unsatisfactory by the area manager and/or regional manager. At a minimum, that determination will include areas such as:

(a) continued inability by the employee to complete the planned amount of appraisal work;

(b) consistently making errors in following the appraisal process;

(d) inability to defend appraisal work before taxpayers and appeal boards.

(6) "International Association of Assessing Officers (IAAO)" means the professional organization for advancement of appraisers.

(7) "Multiple certification" means holding more than one type of certification to appraise property.

(8) "On-the-job appraisal work" means conducting the actual work required to complete the job for appraisers who are new to a specific appraisal classification.

(9) "Residential appraiser" means a person who has completed the necessary training and is certified to appraise residential property in Montana.

(10) "Successful completion of the required training session" means satisfactorily passing the written examination conducted at the conclusion of the training session.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 2003 MAR p. 804, Eff. 4/25/03; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2010 MAR p. 2219, Eff. 9/24/10.

Mont. Admin. R. 42.18.206 Residential Property Appraiser Certification

(1) All residential appraisers must receive specific training and testing to certify that they possess the required knowledge, skills, and abilities to perform residential property appraisals as outlined in this rule.

(2) Training and testing criteria shall be as follows:

(a) International Association of Assessing Officers (IAAO) certified training sessions will be offered annually if funding is available and if there are sufficient numbers of field staff who require the course.

(b) Employees shall attend the next available residential training session offered by the department after commencement of employment. Satisfactory completion of the residential training session shall include successful completion of the written IAAO residential examination. If the employee fails to successfully complete the first written examination, attendance at the next residential IAAO training session shall be required. Failure to successfully complete the second written IAAO examination may result in the immediate termination of employment. The department may choose to demote the employee to a property valuation specialist if the position is available and the individual is qualified to perform in that position. The employee will be notified of exam results directly by IAAO.

(c) Employees voluntarily attending training not required for their current position will be required to adhere to all training class rules and procedures and take the exam, but they will not be subject to personnel action for failing to pass the exam.

(3) Upon beginning employment with the department as a residential appraiser, the employee shall undertake a one-year period of on-the-job residential appraisal work during which time the employee will begin the process of meeting the requirements set forth in (1) and (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic probation period set forth in department policy 3.1.4. The beginning of the one-year experience requirement will coincide with the employee's notification of being assigned residential appraisal responsibilities. All work will be supervised by the department. Failure to perform the appraisal work satisfactorily at any time during the one-year period may result in immediate termination of employment. The department may choose to demote the employee, if a position is available and the individual is certified to perform in that position.

(4) The department may waive the criteria set forth in (2) if sufficient evidence is provided within six months of hire that the employee has previously fulfilled the requirements set out in that section. Specific evidence may include, but is not limited to documentation showing that the individual has successfully completed a course of instruction from a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be equal to or greater in complexity than that of IAAO course 101. An employee who is a Licensed Real Estate Appraiser through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry or another state in accordance to the Appraisal Qualifications Board (AQB) may be eligible for a waiver under this section.

(5) The department may waive or decrease the length of on-the-job training required in (3) if the supervising manager determines that the incumbent has satisfactorily met the requirement in less than one year.

(6) Uniform Standards of Professional Appraisal Practice (USPAP) training will be offered annually if funding is available and if there are sufficient numbers of staff who require the course.

(a) Employees shall attend the next available USPAP 15-hour training session offered by the department after commencement of employment. Satisfactory completion of the USPAP training session shall include attending the 15-hour course as provided by a USPAP certified instructor.

(b) Employees shall attend the next available USPAP 7-hour training session offered by the department within five years of satisfactory completion of the 15-hour training in (a).

(c) If an employee has physical limitations that prevent them from attending the USPAP courses identified in (a) and (b), the department may waive their requirement to attend the USPAP training sessions in person. If waived, the employee shall be responsible for thoroughly reading and comprehending the required material. The employee's manager shall verify and document in the employee's personnel file the employee's successful completion and comprehension of the material.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 2003 MAR p. 804, Eff. 4/25/03; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2010 MAR p. 2219, Eff. 9/24/10; AMD, 2015 MAR p. 2040, Eff. 11/13/15; AMD, 2016 MAR p. 1714, Eff. 9/24/16.

Mont. Admin. R. 42.18.207 Agricultural Property Appraiser Certification

(1) An employee seeking to obtain certification as an agricultural appraiser must be certified by the department as a residential appraiser pursuant to the standards set forth in ARM 42.18.206.

(2) Training and testing criteria shall be as follows:

(a) Department training sessions will be offered annually if funding is available and if there are sufficient numbers of field staff who require the courses.

(b) The employee shall attend the next available scheduled Agricultural Land Classification/Appraisal (ALCA) training session after being assigned ALCA responsibilities. Satisfactory completion of the ALCA training session shall include successful completion of the written examination conducted at the conclusion of the ALCA training session. If the employee fails to successfully complete the first written examination, attendance at the next ALCA training session shall be required. Failure to successfully complete the second written examination may result in immediate termination of employment. The department may choose to demote the employee to a residential appraisal position if the position is available and the individual is certified to perform in that position. The employee will be notified of exam results within one month of completion of the exam.

(3) Upon beginning employment with the department as an agricultural appraiser, the employee shall undertake a one-year period of on-the-job agricultural appraiser work during which time the employee will begin the process of meeting the requirements set forth in (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic probation period set forth in department policy 3.1.4. The beginning of the one-year experience requirement will coincide with the employee's notification of being assigned ALCA responsibilities. All work will be supervised by the department. Failure to perform the classification/appraisal work satisfactorily at any time during the one-year period may result in immediate termination. The department may choose to demote the employee, if a position is available and the individual is certified to perform in that position.

(4) The department may waive the criteria set forth in (2) if sufficient proof is provided within six months of hire that the employee has previously fulfilled such criteria. Specific evidence may include but is not limited to documentation showing that the individual has successfully completed a course of instruction from a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be equal to or greater in complexity than that of the department's ALCA course. An employee who is a Certified Residential Appraiser through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry or in another state in accordance to the Appraisal Qualifications Board (AQB) may be eligible for a waiver under this section.

(6) Uniform Standards of Professional Appraisal Practice (USPAP) training will be offered annually if funding is available and if there are sufficient numbers of staff who require the course.

(b) Employees shall attend the next available USPAP 7-hour training session offered by the department within five years of satisfactory completion of the 15-hour training in (a).

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 2003 MAR p. 804, Eff. 4/25/03; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2010 MAR p. 2219, Eff. 9/24/10; AMD, 2015 MAR p. 2040, Eff. 11/13/15; AMD, 2016 MAR p. 1714, Eff. 9/24/16.

Mont. Admin. R. 42.18.208 Commercial Property Appraiser Certification

(1) An employee seeking to obtain certification as a commercial appraiser must be certified by the department as a residential property and agricultural land appraiser.

(2) Training and testing criteria shall be as follows:

(b) The employee shall attend the next available scheduled commercial training session after being assigned commercial appraisal responsibilities. Satisfactory completion of the commercial training session shall include successful completion of the written IAAO commercial examination conducted at the conclusion of the commercial training session. If the employee fails to successfully complete the first written IAAO examination, attendance at the next IAAO commercial training session shall be required. Failure to successfully complete the second written IAAO examination may result in immediate termination of employment. The department may choose to demote the employee to a residential appraisal position or a residential/agricultural appraisal position, if such a position is available and the individual is certified to perform the duties necessary for that position. The employee will be notified directly of the exam results by IAAO.

(3) Upon beginning employment with the department as a commercial appraiser, the employee shall undertake a one-year period of on-the-job commercial appraisal work during which time the employee will begin the process of meeting the requirements set forth in (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic probation period set forth in department policy 3.1.4. The beginning of the one-year experience requirement will coincide with the employee's notification of being assigned commercial appraisal responsibilities. All work will be supervised by the department. Failure to perform the appraisal work satisfactorily shall result in immediate termination. The department may choose to demote the employee if a position is available and the individual is certified to perform the duties necessary for that position.

(4) The department may waive the criteria set forth if sufficient proof is provided within six months of hire that the employee has previously fulfilled such criteria. Specific evidence may include, but is not limited to providing documentation showing that the individual has successfully completed a course of instruction from a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be equal to or greater in complexity than that of IAAO course 102. An employee who is a Certified General Appraiser through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry or another state in accordance to the Appraisal Qualifications Board (AQB) may be eligible for a waiver under this section.

(6) Uniform Standards of Professional Appraisal Practice (USPAP) training will be offered annually if funding is available and if there are sufficient numbers of staff who require the course.

(b) Employees shall attend the next available USPAP 7-hour training session offered by the department within five years of satisfactory completion of the 15-hour training in (a).

(c) If an employee has physical limitations, the department may waive their requirement to attend the USPAP training sessions in person. If waived, the employee shall be responsible for thoroughly reading and comprehending the required material. The employee's manager shall verify and document in the employee's personnel file the employee's successful completion and understanding and comprehension of the material.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 2003 MAR p. 804, Eff. 4/25/03; AMD, 2006 MAR p. 3101, Eff. 12/22/06; AMD, 2010 MAR p. 2219, Eff. 9/24/10; AMD, 2015 MAR p. 2040, Eff. 11/13/15; AMD, 2016 MAR p. 1714, Eff. 9/24/16.

Mont. Admin. R. 42.18.210 Certification Sequence

(1) Specific positions within the department require multiple certifications:

(2) The following certification sequence shall be adhered to for positions requiring multiple certification:

(a) residential certification;

(b) agricultural certification;

(d) industrial certification.

(3) Subject to department review and modification, each level of certification must be satisfactorily completed before the incumbent may begin to work on the requirements of the next higher level of certification.

Example 1 : Agricultural appraiser position requires residential and agricultural certification.

Example 2 : Commercial appraiser position requires residential, agricultural, and commercial certification.

Example 3 : Regional manager and area manager positions require residential, agricultural, and commercial certification.

Example 4 : Industrial appraiser positions require residential, commercial, and industrial certification.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 2003 MAR p. 804, Eff. 4/25/03; AMD, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2006 MAR p. 3101, Eff. 12/22/06.

Mont. Admin. R. 42.18.211 Certification Sequence

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 1985 MAR p. 2018, Eff. 12/27/85; AMD, 1996 MAR p. 3149, Eff. 12/6/96; REP, 2000 MAR p. 3562, Eff. 12/22/00.

Chapter 42.19 General Property Tax Provisions

Subchapter 42.19.1 General Provisions

Mont. Admin. R. 42.19.101 Marshall Valuation Service

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, Eff. 5/5/77; AMD, 1979 MAR p. 1304, Eff. 10/26/79; AMD, 1982 MAR p. 2103, Eff. 11/25/82; REP, 1992 MAR p. 2078, Eff. 9/11/92.

Mont. Admin. R. 42.19.102 Commercial Appraisal Firms

(1) In order to comply with the provisions of 15-1-201 and 15-7-103 , MCA, all contracts for reappraisal or reclassification between commercial appraisal firms or individuals and the various counties of this state must be approved by the department. Specifications for the work to be accomplished must be related in detail in the contract.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1992 MAR p. 2078, Eff. 9/11/92.

Mont. Admin. R. 42.19.103 Montana Appraisal Manual

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, 15-7-112, 15-7-113, 15-7-114, MCA
History: NEW, Eff. 9/14/75; AMD, 1982 MAR p. 2103, Eff. 11/25/82; REP, 1992 MAR p. 2078, Eff. 9/11/92.

Subchapter 42.19.2 Income and Property Tax Relief

Mont. Admin. R. 42.19.201 Determination of Principal Residence

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Ch. 698, L. 1979
History: NEW, 1979 MAR p. 1499, Eff. 11/30/79; REP, 1996 MAR p. 1171, Eff. 4/26/96.

Mont. Admin. R. 42.19.202 Application Deadline

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Ch. 698, L. 1979
History: NEW, 1979 MAR. p. 1499, Eff. 11/30/79; REP, 1996 MAR p. 1171, Eff. 4/26/96.

Mont. Admin. R. 42.19.203 Definitions

The following definitions apply to this subchapter:

(1) “Commercial rate” means the same as the commercial property tax rate provided in 15-6-134(3)(d), MCA.

(2) “ETR,” for the purposes of administering the reduced tax rates, means the effective tax rate for a qualifying property which the department determines through the process described in ARM 42.19.206.

(3) “Homestead rate” means the same as the homestead reduced tax rate provided in 15-6-402, MCA.

(4) “Multifamily dwelling unit,” for the purposes of administering the rental rate for qualifying multifamily dwelling units provided in 15-6-134(3)(b)(ii), MCA, means two or more separate living spaces within a single building or group of buildings located on the same parcel and under one ownership; and includes the value of both the land and improvements. The term does not include separate living spaces within the same building or group of buildings when the separate living spaces are owned by separate individuals.

(5) “Normal rate” means the same as the class four residential property tax rate provided in 15-6-134(3)(a), MCA.

(6) “Owner” means the same as the term provided in 15-6-402, MCA.

(7) “Reduced tax rates” means the homestead rate and rental rate which are collectively referenced for brevity in these rules.

(8) “Rental rate” means the same as the rental property reduced tax rate provided in 15-6-402, MCA. Rental rate may also be used, where applicable, to describe either:

(a) the multifamily dwelling unit rental rate provided in 15-6-134(3)(b)(ii), MCA (“multifamily rental rate”); or

(b) the single-family dwelling rental rate described in 15-6-134(3)(b)(i), MCA (“single-family rental rate”).

(9) “Secondary dwelling unit,” for the purposes of administering the reduced tax rates, means a single-family residential dwelling unit that is not a principal residence of the owner but is located on the same parcel of land as a principal residence. A secondary dwelling unit includes accessory dwelling units (ADUs) and may include other non-principal dwelling units, as determined by the department, regardless of its name or description.

History

Authorizing statute(s): 15-1-201, 15-6-425, MCA
Implementing statute(s): 15-1-201, 15-6-134, 15-6-402, 15-6-405, 15-6-411, MCA
History: NEW, 2026 MAR, Notice No. 2025-430, Eff. 1/10/26.

Mont. Admin. R. 42.19.204 Reduced Tax Rate Application Process; Determinations; Appeal Rights; and Program Compliance

(1) An owner must apply to the department in accordance with, and subject to the eligibility requirements of 15-6-405 or 15-6-411, MCA, as applicable, and this rule to receive the reduced tax rates.

(2) The department will accept applications for the reduced tax rates, in the form provided by the department, through U.S. mail or electronically. The application is available through the department’s regional offices or through the department’s website at homestead.mt.gov.

(a) Mailed applications must be postmarked by March 1 of the year the reduced tax rates are claimed, and electronic applications must be submitted by 11:59:59 p.m. on March 1 of the year the reduced tax rates are claimed. Mailed applications postmarked after March 1 and electronic applications submitted after March 1 will be processed for the following year.

(b) The department may waive the application deadline in (a) when extenuating circumstances exist that meet the criteria in 15-6-418, MCA. Examples of extenuating circumstances include natural disaster, hospitalization, physical illness, or infirmity. The department must document its justification for a deadline waiver.

(3) Temporary absences that affect occupancy of a principal residence such as admission to a hospital, nursing home, or similar facility for short-term medical or non-medical reasons, military deployments, or work assignments, do not change an owner’s principal residence for the purposes of the homestead rate.

(4) An applicant for reduced tax rates must provide the information in 15-6-405 or 15-6-411, MCA, as applicable, and any other information required by the department that is relevant to the applicant’s eligibility.

(5) In accordance with 15-6-411, MCA, the department may:

(a) investigate the information provided in an application and an applicant’s continued eligibility; and

(b) request an applicant to submit a new application or provide documentation to verify occupancy of their principal residence or property’s use as a long-term rental.

(6) An owner of a principal residence that has qualified for the homestead rate must notify the department, in writing through U.S. mail or electronically, within 30 days if any of the following events occurs:

(a) there is a change in ownership of the property;

(b) the owner no longer uses the dwelling as a principal residence; or

(7) An owner of a long-term rental property that has qualified for the rental rate must notify the department, in writing through U.S. mail or electronically, within 30 days if any of the following events occurs:

(a) there is a change in ownership of the property;

(b) the property is no longer rented to tenants as a dwelling; or

History

Authorizing statute(s): 15-1-201, 15-6-425, MCA
Implementing statute(s): 15-1-201, 15-6-134, 15-6-402, 15-6-405, 15-6-411, 15-6-415, 15-6-418, MCA
History: NEW, 2026 MAR, Notice No. 2025-430, Eff. 1/10/26.

Mont. Admin. R. 42.19.205 Administration of Reduced Tax Rates

(1) A qualifying property whose owner has applied for, and been granted, a homestead rate or rental rate will receive the respective reduced tax rate through an application of an ETR to the appraised market value of the property as determined by the process in ARM 42.19.206.

(2) A qualifying property that receives a homestead rate, contains a single residential dwelling, and is used exclusively as a principal residence, will have the reduced tax rate applied to the entire market value of the property - including the land and all improvements situated upon the land.

(3) Except as provided in (4), the homestead rate does not apply to separately described or assessed parcels of land that do not support the principal residential improvements regardless of whether those parcels are contiguous with or adjacent to the principal residence.

(4) If the principal residence is a mobile home or manufactured home that is assessed separately from the land, the mobile home or manufactured home and the land may qualify for the homestead rate if both are owned by the applicant. If the land is not owned by the applicant, the reduced tax rate applies only to the mobile home or manufactured home.

(5) A qualifying property that receives a homestead rate and contains one or more secondary dwelling units will have the reduced rate applied as follows, based upon the use of the secondary dwelling units:

(a) If the secondary dwelling units are used as long-term rentals and the owner submits a completed rental rate application for the secondary dwelling units that is approved, the entire property value will receive one reduced tax rate.

Informational Example: The property contains a principal residence and a secondary dwelling unit that is used as a long-term rental. The homestead rate and rental rate are both approved. The entire property value will receive one reduced rate.

Total Property Value: $600,000

Land: $100,000

Principal Residence: $350,000

Secondary Dwelling Unit - Long-term rental: $150,000

Total Property Value: $600,000 x Homestead/Single-family Rental Rate

(b) If the secondary dwelling units are also used as a principal residence by an additional owner, and the additional owner also submits a completed application for a homestead rate that is approved, the entire property value will receive one reduced tax rate.

Informational Example: The property contains two separate houses and is jointly owned by two brothers, each residing in one as his principal residence. Both brothers apply for a homestead reduced rate and are approved. The entire property value will receive one homestead rate.

Total Property Value: $600,000

Land: $100,000

First Principal Residence: $350,000

Second Principal Residence: $150,000

Total Property Value: $600,000 x Homestead Rate

(c) If the secondary dwelling units do not qualify as a principal residence or long-term rental, then the portion of value attributable to the secondary dwelling units will be taxed at the rate provided in 15-6-134(3)(a), MCA.

Informational Example: The property contains a principal residence and a secondary dwelling unit that is used as a guest house and short-term rental. The owner applies for a homestead rate and is approved. The value of the land and principal residence will receive the homestead rate. The improvement value associated with the secondary dwelling unit will receive the normal rate.

Total Property Value: $600,000

Land: $100,000

Principal Residence: $350,000

Secondary Dwelling Unit – Short-term Rental/Guest House: $150,000

Land + Principal Residence = $450,000 x Homestead Rate

Secondary Dwelling Unit – Short-Term Rental = $150,000 x Normal Rate

(6) A qualifying property that receives a homestead rate and is a unit of a multifamily dwelling unit will have the reduced tax rate applied as follows:

(a) The rate will apply to the portion of the property value attributable to the principal residence expressed as a percentage of the overall property value of the total number of dwelling units.

(b) The remaining portion of the property value from (a) will be taxed on the use of the remaining multifamily dwelling units as follows:

(i) If one or more of the remaining multifamily dwelling units are also used as a principal residence for an additional owner of the property, and the additional owner submits a completed homestead rate application that is approved, the portion of value attributable to those remaining dwelling units will also receive the reduced tax rate that will be applied to the total value of the property.

Informational Example: The property contains a duplex and is owned by two brothers who each reside in one of the units as their principal residence. Both brothers apply to receive the homestead rate for their respective units and are approved. The entire property value will receive one homestead rate.

Total Property Value: $600,000

Land: $100,000

Principal Residences: $500,000

Total Property Value = $600,000 x Homestead Rate

(ii) If one or more of the remaining multifamily dwelling units are used as long-term rentals and the owner submits a completed rental rate application that is approved, then the portion of value attributable to those remaining dwelling units will be taxed at the rate provided in 15-6-134(3)(b)(ii), MCA.

Informational Example: The property is a fourplex: one unit is owner-occupied as the principal residence, and the remaining three units are used as long-term rentals. The owner applies for a homestead rate for the principal residence unit and also applies for a rental rate on the three long-term rentals, and all are approved. The homestead rate will be applied to 25 percent of the property value associated with the principal residence and the multifamily rental rate will be applied to 75 percent of the total property value associated with the three long-term rentals.

Total Property Value: $800,000

Land: $100,000

Improvements: $700,000

Principal Residence Unit: $800,000 x 25% (1/4) = $200,000 x Homestead Rate

Long-term Rental Units: $800,000 x 75% (3/4) = $600,000 x Multifamily Rental Rate

(iii) If the remaining multifamily dwelling units do not meet the conditions outlined in (i) or (ii), then the portion of value attributable to those remaining dwelling units will be taxed at the rate provided in 15-6-134(3)(a), MCA.

Informational Example: The property is a fourplex: one unit is owner occupied as the principal residence, two units are used as long-term rentals, and one unit is used as a short-term rental. The owner applies for a homestead rate for the principal residence unit and also applies for a rental rate on the two long-term rentals; both are approved. The homestead rate will be applied to 25 percent of the property value (associated with the principal residence), the multifamily rental rate will be applied to 50 percent of the property value (associated with the two long-term rentals), and 25 percent of the property value will receive the normal rate for the short-term rental.

Total Property Value: $800,000

Land: $100,000

Improvements: $700,000

Principal Residence Unit: $800,000 x 25% (1/4) = $200,000 x Homestead Rate

Long-term Rental Units: $800,000 x 50% (2/4) = $400,000 x Multifamily Rental Rate

Short-term Rental Unit: $800,000 x 25% (1/4) = $200,000 x Normal Rate

(7) A property that has been granted a homestead rate and contains a mix of residential and commercial uses will have the homestead rate applied as follows:

(a) The homestead rate will be applied to the portion of the property’s value attributable to the principal residence, as determined by 15-6-134(2), MCA.

(b) The remaining portion of property value attributable to the commercial use, as determined in 15-6-134(2), MCA, will be taxed at the rate provided in 15-6-134(3)(d), MCA.

Informational Example: The property has a residential dwelling used as the owner’s principal residence and a large commercial shop used for the owner’s auto repair business. The highest percentage of the total land value is associated with the auto repair business, so the entire land value is classified as commercial. The owner applies for a homestead rate for the principal residence that is approved. The homestead rate will be applied to the portion of the improvement value attributable to the principal residence. The total land value and portion of the improvement value associated with the auto repair shop will receive the commercial rate.

Total Property Value: $800,000

Land - Commercial: $100,000

Principal Residence Improvements: $300,000

Commercial Improvements: $400,000

$300,000 x Homestead Rate

$100,000 + $400,000 x Commercial Rate

(8) A property that has been granted a rental rate will have the rate applied as follows:

(a) If the property that receives the rental rate contains a single residential dwelling, the total property value, including the land and improvements, will receive the rental rate provided in 15-6-134(3)(b)(i), MCA.

Informational Example: The property contains a single residential dwelling that is used as a long-term rental. The owner applies for a rental rate which is approved. The single-family rental rate will be applied to the entire value of the property.

Total Property Value: $450,000

Land: $100,000

Single-family Dwelling Improvements: $350,000

Total Property Value: $450,000 x Single-family Rental Rate

(b) If the property that receives the rental rate contains a multifamily dwelling, then the rate will be applied as follows:

(i) If all multifamily dwelling units, whether contained in a single structure or multiple structures, qualify for the rental rate, then the entire property value, including the land and improvements, will receive the multifamily rental rate provided in 15-6-134(3)(b)(ii), MCA.

Informational Example: The property contains a fourplex and all four units are used as long-term rentals. The owner applies for a rental rate which is approved. The entire property value will receive the multifamily rental rate.

Total Property Value: $800,000

Land: $100,000

Multifamily Dwelling Improvements: $700,000

Total Property Value: $800,000 x Multifamily Rental Rate

(ii) If only a portion of the dwelling units of a multi-family dwelling unit long-term rental property qualify for the rental rate, only the portion of value attributed to the dwelling units that qualify will receive the reduced tax rate provided for in 15-6-134(3)(b)(ii), MCA. The portion of value attributable to the dwelling units that do not qualify for the rental rate will be taxed at the rate provided in 15-6-134(3)(a), MCA.

Informational Example: The property contains a fourplex: three of the units are used as long-term rentals and one unit is used as a short-term rental. The owner applies for a rental rate on the three long-term rentals which is approved. The multifamily rental rate will be applied to 75 percent of the property value (associated with the three long-term rentals). The normal rate is applied to 25 percent of the property value (associated with the one short-term rental).

Total Property Value: $800,000

Land $100,000

Multifamily Dwelling Improvements: $700,000

$800,000 x 75% (3/4) = $600,000 x Multifamily Rental Rate

$800,000 x 25% (1/4) = $200,000 x Normal Rate

(iii) The portion of value that receives the rental rate is calculated by taking the total property value multiplied by a factor of qualifying dwelling units divided by the total number of dwelling units.

(c) If the property that receives the rental rate contains a mix of residential and commercial uses, the rental rate will be applied as follows:

(i) The rental rate will be applied to the portion of the property’s improvement value attributable to the long-term rental and will only apply to the land value if the residential use of the land is the highest percentage of the total value of the land in accordance with 15-6-134(2), MCA.

(ii) A single unit long-term rental will receive the reduced rate provided in 15-6-134(3)(b)(i), MCA.

Informational Example: The property includes a residential dwelling used as a long-term rental and a large commercial shop where the owner runs an auto repair business. The highest percentage of the total land value is associated with the commercial use of the auto repair business, so the entire land value is classified as commercial. The owner applies for the rental rate for the residential dwelling that is approved. The rental rate for single-family dwellings will be applied to the portion of the improvement value attributable to the long-term rental. The total land value and portion of the improvement value associated with the commercial auto repair shop will receive the commercial rate.

Total Property Value: $800,000

Land Value - Commercial: $100,000

Single-family Dwelling Improvement Value: $300,000

Commercial Improvement Value: $400,000

$300,000 x Single-family Rental Rate

$100,000 + $400,000 x Commercial Rate

(iii) Units of a multifamily dwelling long-term rental will receive the reduced rate provided in 15-6-134(3)(b)(ii), MCA.

Informational Example: The property includes a fourplex, with all units used as long-term rentals, and a large commercial shop where the owner runs an auto repair business. The highest percentage of the total land value is associated with the residential use for the long-term rental units, so the entire land value is classified as residential. The owner applies for a rental rate for the fourplex that is approved. The multifamily rental rate will be applied to the entire land value and portion of the improvements value attributable to the long-term rentals. The portion of the improvement value associated with the commercial auto repair shop will receive the commercial rate.

Total Property Value: $800,000

Land Value - Residential: $100,000

Multifamily Dwelling Improvements Value: $400,000

Commercial Improvements Value: $300,000

$100,000 + $400,000 x Multifamily Rental Rate

$300,000 x Commercial Rate

(iv) The remaining portion of property value attributable to the commercial use, as determined in 15-6-134(2), MCA, will be taxed at the rate provided in 15-6-134(3)(d), MCA.

(9) Any property that has unusual or unique combinations of classifications, characteristics, and uses will be reviewed by the department on a case-by-case basis and the applicable reduced tax rate applied.

History

Authorizing statute(s): 15-1-201, 15-6-425, MCA
Implementing statute(s): 15-1-201, 15-6-134, 15-6-402, 15-6-405, 15-6-411, 15-6-415, 15-6-418, MCA
History: NEW, 2026 MAR, Notice No. 2025-430, Eff. 1/10/26.

Mont. Admin. R. 42.19.206 Determining Effective Tax Rates (etr) for Qualifying Class Four Property

(1) There is a graduated property tax rate reduction for class four property that also qualifies for the reduced tax rates provided in 15-6-134, MCA. For purposes of this rule, the term “qualifying property” or “property” will be used to describe this class four property.

(2) To implement the reduced tax rates described in (1), the department will determine an ETR for each qualifying property. An ETR is determined by calculating the taxable value for each graduated tier of eligible market value and adding the respective taxable values from each tier to arrive at a total eligible taxable value; then dividing the total eligible taxable value by the total eligible market value of the qualifying property.

(3) If a qualifying property is enrolled in the statutory property tax assistance program (PTAP), a PTAP ETR will be calculated for the portion of the property’s PTAP benefit by applying the respective rate reduction multiplier to the tiered tax rates first. Any portion of the property’s value not eligible to receive the PTAP benefit will have a separate ETR calculated without any rate reductions applied.

(4) A qualifying property receiving a partial exemption under Montana law will have an ETR calculated for only the non-exempt portion of the property’s value.

(5) A qualifying property receiving an abatement (such as a new or expanding industry (NEI) abatement) will have an ETR calculated for it as if it were fully taxable. Any reduction from the abatement will be applied to the overall ETR and used to determine the taxable value for the portion of value eligible to receive the abatement.

(6) The department will compute all ETR percentages out to the third decimal place, but the final rate will be rounded to two decimal places to achieve consistency with all statutory and rule expressions of tax rates and historical practice.

(a) If the third decimal place is fewer than five, the second decimal place will be kept;

(b) If the third decimal place is equal to or greater than five, the second decimal place will round up.

(7) A rounded ETR will be applied against the market value for each qualifying property to calculate the property’s taxable value.

(8) The following are examples of the ETR calculation and rounding processes described in this rule:

(a) A qualifying residential property has a market value of $750,000. A graduated tax rate of .76% applies to the first $378,000 of market value and a graduated tax rate of .9% applies to the remaining $372,000.

Taxable Value = ($378,000 * 0.0076) = $2,873

Taxable Value = ($372,000 * 0.009) = $3,348

Total Taxable Value = $2,873 + $3,348 = $6,221

ETR = Total Taxable Value / Total Market Value

ETR = $6,221 / $750,000 = .829%

Rounded ETR = .83%

(b) A qualifying commercial property has a market value of $3,000,000. A graduated tax rate of 1.5% applies to the first $2,274,000 of market value and a graduated tax rate of 1.9% applies to the remaining $726,000.

Taxable Value = ($2,274,000 * 0.015) = $34,110

Taxable Value = ($726,000 * 0.019) = $13,794

Total Taxable Value = $34,110 + $13,794 = $47,904

ETR = Total Taxable Value / Total Market Value

ETR = $47,904 / $3,000,000 = 1.596%

Rounded ETR = 1.6%

(c) A qualifying residential property receives the PTAP benefit at an 80% reduction and is valued at $618,000. The first $418,000 in value is eligible to receive the 80% reduction for PTAP.

Taxable Value = (.76% * .2) = (.15% * $378,000) = $567

Taxable Value = (.9% * .2) = (.18% * $40,000) = $72

PTAP Taxable Value = 567 + 72 = 639

PTAP Effective Tax Rate = 639 / $418,000 = .152%

Rounded Effective Tax Rate for PTAP Value = .15%

Taxable Value = (.9% * $200,000) = $1,800

Effective Tax Rate for Non-PTAP Value = .9%

(d) A qualifying commercial property has a market value of $4,000,000 and is receiving a partial nonprofit healthcare exemption on $1,000,000 of property value. The $1,000,000 in value that is exempt will be subtracted from the total value of $4,000,000, leaving $3,000,000 in taxable market value. A graduated tax rate of 1.5% applies to the first $2,274,000 of taxable market value and a graduated tax rate of 1.9% applies to the remaining $726,000.

Taxable Value = ($2,274,000 * 0.015) = $34,110

Taxable Value = ($726,000 * 0.019) = $13,794

Total Taxable Value = $34,110 + $13,794 = $47,904

ETR = Total Taxable Value / Total Market Value

ETR = $47,904 / $3,000,000 = 1.596%

Rounded ETR = 1.6%

(e) A qualifying commercial property has a market value of $3,000,000 and is receiving a 50% NEI abatement on $1,000,000 of market value. A graduated tax rate of 1.5% applies to the first $2,274,000 of market value and a graduated tax rate of 1.9% applies to the remaining $726,000 to calculate an overall ETR. The NEI abatement reduction is then applied to the overall ETR for the $1,000,000 in market value receiving the abatement.

Taxable Value = ($2,274,000 * 0.015) = $34,110

Taxable Value = ($726,000 * 0.019) = $13,794

Total Taxable Value = $34,110 + $13,794 = $47,904

ETR = Total Taxable Value / Total Market Value

ETR = $47,904 / $3,000,000 = 1.596%

Rounded ETR = 1.6%

NEI Abatement (1.6% * 50% = .8%)

Abated Taxable Value = ($1,000,000 * .008) = $8,000

Non-Abated Taxable Value = ($2,000,000 * .016) = $32,000

History

Authorizing statute(s): 15-1-201, 15-6-425, MCA
Implementing statute(s): 15-1-201, 15-6-134, 15-6-402, 15-6-405, 15-6-411, 15-6-415, MCA
History: NEW, 2026 MAR, Notice No. 2025-430, Eff. 1/10/26.

Subchapter 42.19.3 Tax Levy Limits

Mont. Admin. R. 42.19.301 Clarification of Exception to Tax Levy Limit

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-10-401, 15-10-402, 15-10-411, and 15-10-412, MCA
History: NEW, 1988 MAR p. 396, Eff. 2/26/88; REP, 1990 MAR p. 1713, Eff. 8/31/90.

Subchapter 42.19.4 Property Tax Assistance Programs

Mont. Admin. R. 42.19.401 Property Tax Assistance Program (ptap), Montana Disabled Veteran (mdv) Property Tax Assistance Program, and Disabled First Responder (dfr) Property Tax Assistance Program; Application Process; Determinations; Program Compliance

(1) A qualifying applicant, as defined in ARM 42.19.405, must apply to the department in accordance with, and subject to the eligibility requirements of 15-6-302, MCA, and this rule to receive the PTAP benefit provided in 15-6-305, MCA, the MDV benefit provided in 15-6-311, MCA, or the DFR benefit provided in 15-6-314, MCA.

(2) The PTAP benefit is administered as a reduced property tax rate that applies up to the appraised market value limit authorized by and adjusted under 15-6-305, MCA, of the qualifying applicant's primary residence.

(a) A primary residence is defined in 15-6-301, MCA, as a dwelling where the qualifying applicant lived for at least seven months of the tax year for which benefits are claimed. Provided, a primary residence may include more than one dwelling and the time of residency in each may be combined to meet the seven-month requirement.

(b) When the appraised market value of a primary residence exceeds the statutory limit, as adjusted, the department will apply the reduced tax rate up to that limit and then apply the standard tax rate to the difference between the limit and the residence's appraised value.

(3) The MDV benefit is administered as a reduced property tax rate for the primary residence of a qualified veteran or qualified veteran's surviving spouse as provided in 15-6-301 and 15-6-311, MCA, and is based on a statutory schedule of qualifying income for a qualified applicant or their surviving spouse.

(4) The DFR benefit is administered as a reduced property tax rate for the primary residence of a qualified disabled first responder or qualified surviving spouse, as provided in 15-6-301 and 15-6-314, MCA, and is based on a statutory schedule of qualifying income for a qualified applicant or their surviving spouse.

(5) The department will accept an application, in the form provided by the department, submitted through U.S. mail or electronic mail, the department’s website at https://revenue.mt.gov/, in person, or by telephone. If a qualifying applicant applies by telephone, the department may assist the applicant in its completion and note telephonic submission of the application in the property assessment records.

(a) Mailed applications must be postmarked by April 15 of the year first claimed. All other applications received after April 15 will be processed for the following tax year.

(i) The application deadline does not apply for a first-time applicant submission occurring within 30 days from the date on their classification and appraisal notice.

(ii) The department may waive the application deadline when a substantiated hardship case exists. The department must document its justification for a deadline waiver.

(b) A qualifying applicant is not required to reapply for each succeeding year but is subject to the annual verification process described in 15-6-301, MCA, and in (8), (11), and (12).

(6) Except as provided in (7), PTAP, MDV, and DFR benefits may not apply to separately described or assessed parcels of land that do not support the primary residential improvements.

(7) If the primary residence is a mobile home or manufactured home that is assessed separately from the land, the mobile home or manufactured home and the land may qualify for a benefit if they are both owned by the qualifying applicant. If the land is not owned by the qualifying applicant, a benefit applies only to the mobile home or manufactured home.

(8) A qualifying applicant must attest to property ownership upon initial application and in connection with an annual verification. The department may request proof of residency to ensure the property applied for under the PTAP, MDV, or DFR programs qualifies as a primary residence under (2).

(a) Examples of acceptable proof of residency include:

(i) federal or state tax returns, a driver's license, car registrations, hunting or fishing licenses, or a voter registration that lists the address of the primary residence;

(ii) employment records listing the primary residence as the place of residence; or

(iii) copies of bills and correspondence sent to the primary residence address.

(b) Temporary residency changes, such as admission to a hospital, nursing home, or similar facilities do not change an applicant's primary residence for the purposes of PTAP, MDV, or DFR benefits.

(9) The department will apply a benefit to the primary residence for the entire tax year when:

(a) a qualifying applicant owns and lives in the primary residence when the department provides the tax roll to the county treasurer for billing. If ownership changes between that time and the end of the calendar year, the benefit remains on the primary residence for the entire tax year; or

(b) in the case of a separately assessed mobile home or manufactured home, a qualifying first-time applicant receives a classification and appraisal notice from the department, applies for a benefit pursuant to the requirements of 15-6-302, MCA, and this rule, and receives written approval from the department.

(10) When a change in ownership of the primary residence occurs before the department provides the tax roll to the county treasurer for billing, the department will apply a benefit as follows:

(a) if a qualifying applicant lived in a primary residence for less than seven months of the tax year, the department will remove the benefit from the tax rolls. However, a benefit may be combined as described in (2) and transferred to another primary residence; or

(b) if a qualifying applicant lived in the primary residence for at least seven months of the tax year, the department will apply the benefit on a per-day basis using the date of sale. Once the qualifying applicant no longer owns the primary residence, the property will be assessed at the full tax rate for the remaining portion of the tax year from the date of sale.

(11) Each year after the application deadline, the department will:

(a) verify the qualifying income and eligibility of PTAP, MDV, and DFR program participants;

(b) approve, renew, or deny applicant benefits, in writing; and

(c) notify PTAP, MDV, and DFR program participants of their right to appeal the department's determination to the Montana Tax Appeal Board within 30 days of receiving a determination letter.

(12) In accordance with 15-6-302, MCA, the department may:

(a) investigate the information provided in an application and an applicant's continued eligibility;

(b) request an applicant to verify occupancy of their primary residence; and

(c) review, on a case-by-case basis, any applicant or program participant for whom the verification process finds no source of income and document the same.

(13) The department may address unusual circumstances of ownership and income that arise in administering the PTAP, MDV, and DFR programs such as:

(a) property ownership issues when a person dies and title to the property has not yet been transferred to their spouse; or

(b) one-time increases in income used for funeral or medical expenses.

(14) The department may also consider the additional unusual circumstances for MDV program eligibility described in 15-6-302, MCA.

History

Authorizing statute(s): 15-1-201, 15-6-302, MCA
Implementing statute(s): 15-6-301, 15-6-302, 15-6-305, 15-6-311, 15-6-312, 15-6-314, MCA
History: NEW, 1988 MAR p. 734, Eff. 4/15/88; AMD, 1991 MAR p. 2041, Eff. 11/1/91; AMD, 1993 MAR p. 2967, Eff. 12/10/93; AMD, 1996 MAR p. 1171, Eff. 4/26/96; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; AMD, 2009 MAR p. 2499, Eff. 12/25/09; AMD, 2010 MAR p. 655, Eff. 3/12/10; AMD, 2011 MAR p. 336, Eff. 3/11/11; AMD, 2012 MAR p. 511, Eff. 3/9/12; AMD, 2014 MAR p. 401, Eff. 2/28/14; AMD, 2014 MAR p. 2795, Eff. 11/7/14; AMD, 2015 MAR p. 2041, Eff. 11/13/15; AMD, 2016 MAR p. 1865, Eff. 10/15/16; AMD, 2017 MAR p. 2201, Eff. 11/25/17; AMD, 2019 MAR p. 2387, Eff. 12/28/19; AMD, 2023 MAR p. 1895, Eff. 12/23/23; AMD, 2026 MAR, Notice No. 2026-9, Eff. 4/11/26.

Mont. Admin. R. 42.19.402 Inflation Adjustment for the Property Tax Assistance Program (ptap), Montana Disabled Veteran (mdv) Property Tax Assistance Program, and Disabled First Responder (dfr) Property Tax Assistance Program

(1) Sections 15-6-301, 15-6-302, 15-6-305, 15-6-311, 15-6-312, and 15-6-314, MCA, provide property tax relief to fixed or limited income homeowners, qualified disabled veterans and their spouses, and qualified disabled first responders or their surviving spouses.

(2) The department annually adjusts the respective programs’ base year qualifying income levels for the effects of inflation.

(a) Statute specifies that the price deflator (price index) for personal consumption expenditures (PCE), published in the national income and product accounts by the Bureau of Economic Analysis of the U.S. Department of Commerce, is used in the calculation of the inflation factor.

(b) Each income figure in the base year income schedule is multiplied by the inflation factor calculated for the tax year in question to update the schedule. The product is then rounded to the nearest whole dollar amount. If the adjustment results in a decrease in qualifying income levels from the previous year, the qualifying income levels must remain the same for that year.

(3) The department shall adjust the market value limit for residential real property for inflation after each two-year reappraisal cycle in accordance with 15-6-305, MCA. The department will finalize the market value limit by rounding it to the nearest $1,000.

(4) The department will publish qualifying income levels and market value limits annually on the department's website at https://revenue.mt.gov/.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-191, 15-6-301, 15-6-302, 15-6-305, 15-6-311, 15-6-312, 15-6-314, MCA
History: NEW, 1988 MAR p. 734, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 1996 MAR p. 1171, Eff. 4/26/96; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; AMD, 2015 MAR p. 2041, Eff. 11/13/15; AMD, 2016 MAR p. 1865, Eff. 10/15/16; AMD, 2019 MAR p. 2387, Eff. 12/28/19; AMD, 2021 MAR p. 1409, Eff. 10/23/21; AMD, 2023 MAR p. 1895, Eff. 12/23/23; AMD, 2026 MAR, Notice No. 2026-9, Eff. 4/11/26.

Mont. Admin. R. 42.19.403 Montana Disabled Veteran (mdv) Property Tax Assistance Program

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-6-302, MCA
Implementing statute(s): 15-6-301, 15-6-302, 15-6-311, 15-6-312, MCA
History: NEW, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1996 MAR p. 3150, Eff. 12/6/96; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD, 2007 MAR p. 2155, Eff. 12/21/07; AMD, 2009 MAR p. 2499, Eff. 12/25/09; AMD, 2011 MAR p. 336, Eff. 3/11/11; AMD, 2012 MAR p. 511, Eff. 3/9/12; AMD, 2014 MAR p. 401, Eff. 2/28/14; AMD, 2015 MAR p. 2041, Eff. 11/13/15; AMD and TRANS, from ARM 42.19.501, 2016 MAR p. 1865, Eff. 10/15/16; AMD, 2017 MAR p. 2201, Eff. 11/25/17; REP, 2019 MAR p. 2387, Eff. 12/28/19.

Mont. Admin. R. 42.19.404 Inflation Adjustment for Montana Disabled Veteran (mdv) Property Tax Assistance Program

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-301, 15-6-311, MCA
History: NEW, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; AMD, 2015 MAR p. 2041, Eff. 11/13/15; AMD and TRANS, from ARM 42.19.503, 2016 MAR p. 1865, Eff. 10/15/16; REP, 2019 MAR p. 2387, Eff. 12/28/19.

Mont. Admin. R. 42.19.405 Definitions

The following definitions apply to rules in this subchapter.

(1) "Head of household" means a taxpayer who meets the head of household standard for federal income tax purposes.

(2) "Percentage reduction" means the amount by which the property tax rate is reduced based on the income schedules for the Property Tax Assistance Program (PTAP), the Montana Disabled Veteran (MDV) Property Tax Assistance Program, and the Disabled First Responder (DFR) Property Tax Assistance Program. Those schedules are located in ARM 42.19.402.

(3) "Qualifying applicant" means:

(a) an individual who is the record owner of the land and improvements that are the primary residence of the individual or who is purchasing the property under a contract for deed; or

(b) a revocable trust if the land and improvements are the primary residence of the grantor.

(c) Qualifying applicants do not include entities such as partnerships, corporations, limited liability corporations, transferrable revocable trusts, and irrevocable trusts.

(4) "Qualifying income" means the federal adjusted gross income of an applicant and an applicant's spouse, excluding capital and income losses as they appear on their Montana income tax return for the prior tax year.

(a) If the applicant did not file a Montana income tax return for the applicable year, qualifying income means the federal adjusted gross income of the applicant and the applicant's spouse, excluding capital income losses as they appear on their federal income tax return, for the applicable year.

(b) If the applicant does not have an income tax filing requirement, the applicant's qualifying income is considered to be zero.

History

Authorizing statute(s): 15-1-201, 15-6-302, MCA
Implementing statute(s): 15-6-134, 15-6-240, 15-6-301, 15-6-302, 15-6-305, 15-6-311, 15-6-312, 15-6-314, MCA
History: NEW, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2014 MAR p. 401, Eff. 2/28/14; AMD, 2015 MAR p. 2041, Eff. 11/13/15; AMD, 2016 MAR p. 1865, Eff. 10/15/16; AMD, 2017 MAR p. 2201, Eff. 11/25/17; AMD, 2019 MAR p. 2387, Eff. 12/28/19; AMD, 2023 MAR p. 1895, Eff. 12/23/23; AMD, 2026 MAR, Notice No. 2026-9, Eff. 4/11/26.

Mont. Admin. R. 42.19.406 Extended Property Tax Assistance Program (eptap)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-193, MCA
History: NEW, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2009 MAR p. 1685, Eff. 9/25/09; AMD, 2011 MAR p. 336, Eff. 3/11/11; AMD, 2014 MAR p. 604, Eff. 2/28/14; AMD, 2014 MAR p. 2795, Eff. 11/7/14; REP, 2015 MAR p. 2041, Eff. 11/13/15.

Mont. Admin. R. 42.19.407 Intangible Land Value Property Tax Assistance Program for Residential Property

(1) Property owners who meet the requirements of the intangible land value property tax assistance program, provided in 15-6-240, MCA, may apply for assistance on the department's form at http://www.mtrevenue.gov .

(2) Applications must be submitted within 30 days from the date on the classification and appraisal notice for the exemption to be considered for both years of the two-year valuation cycle.

(a) Applications submitted more than 30 days from the date on the classification and appraisal notice will apply to the second year of the two-year valuation cycle only.

(b) An applicant who does not apply during the first year of the valuation cycle must apply by March 1 of the second year of the valuation cycle.

(3) A qualifying applicant shall affirm that the property owned is the applicant's primary residence. The department may require the applicant document that the property applied for under the program qualifies as a primary residence. Examples of acceptable proof of residency include:

(a) federal or state tax returns, a driver's license, car registrations, hunting or fishing licenses, or a voter registration that lists the address of the primary residence;

(b) employment records listing the primary residence as the place of residence; or

(4) A qualifying applicant must provide documentation that their land has been owned by the applicant or a family member of the applicant within three degrees of consanguinity (ancestral line of descent) for at least 30 consecutive years. Examples of acceptable documentation include:

(a) deeds showing ownership of the land;

(b) property tax records indicating ownership by the applicant;

(d) documents showing transfer of the land from one degree of consanguinity to the next.

(5) Computation of consanguinity is calculated as follows:

(a) The degree of relationship by consanguinity between an individual and the individual's descendant is determined by the number of generations that separate them.

(b) If an individual and the individual's relative are related by consanguinity, but neither is descended from the other, the degree of relationship is determined by adding:

(i) the number of generations between the individual and the nearest common ancestor of the individual and the individual's relative; and

(ii) the number of generations between the relative and the nearest common ancestor.

(i) parent or child (relatives in the first degree);

(ii) brother, sister, grandparent, or grandchild (relatives in the second degree); and

(iii) great-grandparent, great-grandchild, aunt who is a sister of a parent of the individual, uncle who is a brother of a parent of the individual, nephew who is a child of a brother or sister of the individual, or niece who is a child of a brother or sister of the individual (relatives in the third degree).

(6) As described in 15-6-240, MCA, if the department's appraised value of the land is greater than 150 percent of the appraised value of the primary residence and improvements situated on the land, then the land is valued at 150 percent of the appraised value of the primary residence and improvements, subject to the following:

(a) The subject property will not qualify if the land value is less than the statewide average of the land multiplied by the acreage of land of the subject property; and

(b) Parcels of land exceeding five acres in size do not qualify unless the department's appraised value of the first five acres which support the primary residential improvements is greater than 150 percent of the appraised value of the primary residence and improvements situated on the land. In such cases, any land in excess of five acres remains valued at its market value.

(7) For the purpose of administering (6), the department determines the statewide average value of land to be the average market value per acre of all taxable class four residential land that is valued using the acre market land valuation models. The average market value per acre is calculated by taking the total appraised value of all taxable class four residential land valued using the acre land valuation models divided by the total acreage of all taxable class four residential land valued using the acre land valuation models.

(8) In order to meet the requirements of (6), a qualifying applicant is required to reapply for the intangible land value property tax assistance program each property valuation cycle. The supporting documentation outlined in (4) may be required with any reapplication.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-240, 15-6-301, MCA
History: NEW, 2017 MAR p. 2201, Eff. 11/25/17; AMD, 2019 MAR p. 2387, Eff. 12/28/19; AMD, 2023 MAR p. 1895, Eff. 12/23/23.

Subchapter 42.19.5 Exemptions - Ownership and Use Tests

Mont. Admin. R. 42.19.502 Exemptions Involving an Ownership Test

(1) A tribal member who owns vehicles and other personal property in whole or in part is subject to the provisions of this rule. The following requirements apply to tribal personal property in order to meet the ownership test:

(a) The exemption applies to tribal members living on the reservation of the tribe in which they are an enrolled member;

(b) If the tribal member owns 100 percent of the interest in personal property (such as vehicles), the property is 100 percent exempt; and

(c) If the personal property is jointly owned by tribal members and nontribal members and there is no indication of the percentage of ownership for each owner, the exemption of the property is prorated among the owners as if each owner owned equal interests in the property. An example of this is when a tribal member and two nontribal members register a vehicle. The vehicle is on the reservation of the tribal member and there is no indication of the percentage of ownership for each owner. The vehicle receives a 33 percent exemption and is taxed for the remaining 67 percent.

(d) If there is an indication of percentage of ownership, the exemption will be prorated based on the indicated percentages. For motor vehicles, the percentage of ownership must be proven by submittal of a current title or registration indicating the percentage of ownership. For other personal property, the percentage of ownership can be proven by submittal of a bill of sale or an affidavit, signed by all owners, indicating each owner's percentage of ownership.

(2) The following requirements apply to tribal real property in order to meet the ownership test:

(a) The exemption involving an ownership test applies to real property located on the reservation in which the tribal member is an enrolled member. In most cases the percentage of ownership is stated on the deed or instrument that transfers intention that the land be subject to state taxation, or if the land is held by the United States government in trust for the enrolled member, it is not generally taxable and is exempt.

(b) Property acquired under a federal statute in which Congress expressed its intention that the land be subject to state taxation, such as the Indian General Allotment Act of 1887, is not entitled to an exemption and will remain on the tax roll, unless it was placed in trust after acquisition under the particular federal statute. If the local staff cannot determine whether the property was acquired under a federal statute authorizing state taxation or is held in trust by the United States, the property will be placed on the tax roll until the owner can produce proof that the property is entitled to an exemption. Therefore, if the tribal member owns 20 percent of the property and is entitled to an exemption, 20 percent of the property will receive an exemption and the remaining 80 percent of the property will remain on the tax roll. The assessment will be addressed to and sent to the nontribal member(s).

(3) Military personnel who own vehicles and other personal property in whole or in part are subject to the provisions of this rule.

(a) If a military person is entitled to an exemption for that person's personal property under the Soldiers and Sailors Relief Act, the amount of exemption will depend on their percentage of ownership. If there are owners other than the military person and the ownership document does not indicate the ownership interest, the property must be prorated among the owners as if each owner owned equal interests in the property. For example, if a vehicle is owned by a military person and his/her spouse and there is no legal indication of the percentage of ownership, the vehicle would receive a 50 percent exemption.

(b) To receive an exemption under the Soldiers and Sailors Relief Act, the military person must be a nonresident and provide the department with proof that they have orders assigning them to duty in Montana.

(c) There is no exemption allowed for real property of active military personnel or personal property used in or arising from a trade or business of the active duty military personnel.

(4) For other types of exemptions that require an application for exemption and an ownership test to qualify, the exemption is based on the percentage of ownership as contained in the document that evidences ownership, and on whether or not the property satisfies the use test required by the exemption statute (if a use test is required). If the document does not show the ownership interest, the value of the property must be prorated among the owners as if each owner owned equal interests in the property. An example would be if a church and a pastor are both listed as owners of a house. The house is occupied by the pastor and he is a member of the clergy. The church's 50 percent interest is exempt from taxation. The pastor's 50 percent interest is not exempt from taxation. This portion of the rule applies to properties which receive an exemption under 15-6-201, 15-6-203, 15-6-209, MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-201, 15-6-203, 15-6-209, 15-24-1208, MCA
History: NEW, 1993 MAR p. 2968, Eff. 12/10/93; AMD, 2015 MAR p. 2041, Eff. 11/13/15.

Mont. Admin. R. 42.19.506 Exemptions Involving a Use Test

(1) For property tax exemptions which require a use test, the following criteria apply:

(a) the applicant must state the actual or proposed use of the property in the form of an affidavit or letter;

(b) the applicant shall provide supporting documentation for the stated actual or proposed use of the property;

(i) site plans;

(ii) soil surveys;

(iii) building permits;

(iv) sewer permits;

(v) environmental studies;

(vi) requests for zoning changes;

(vii) architectural planning;

(viii) grant applications for construction; and

(ix) physical inspections of the property by the local Department of Revenue staff; and

(d) the ratio of the exempt to nonexempt use is used to determine the portion of the property that will receive the exemption.

(2) The documentation shall be sufficient to demonstrate that the property is either currently in, or will be put to, the stated use within a reasonable time period.

(3) An example of the application of the use test in (1) is when 25 percent of a building was used for educational purposes in the current year and the remainder of the building was used for commercial purposes. The applicant owns the property on January 1 and applies for an exemption on March 1 of the current year. For the current year and until the use changes, the property receives a 25 percent exemption for the land and the building.

(4) If the use of a property that is exempt because it has met a prior use test changes during the year, the exemption for the property is reviewed and the exemption adjusted accordingly on January 1 of the tax year following the change in use.

(5) This rule applies to exemptions that require an application for exemption, which includes properties listed in 15-6-201, 15-6-203, and 15-6-209, MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-201, 15-6-203, 15-6-209, 15-24-1208, MCA
History: NEW, 1993 MAR p. 2968, Eff. 12/10/93; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3102, Eff. 12/22/06; AMD, 2015 MAR p. 2041, Eff. 11/13/15.

Subchapter 42.19.6 Multiple Undivided Ownerships

Mont. Admin. R. 42.19.601 Notification of Classification and Appraisal to Owners of Multiple Undivided Ownerships

(1) If the owners of a parcel of real property held in multiple undivided ownership, prior to April 30, 2001, designated more than one recipient of the notice of assessment, or did not supply the department with the name and mailing address of a designated recipient, the department will designate the owner to whom the notice of assessment is sent. This designation is based on the best information available to the department and includes the:

(a) first surname alphabetically;

(b) surname holding the largest percent of ownership; or

(2) As subsequent ownership changes occur to a multiple undivided ownership parcel, after April 30, 2001, the department will use the surname and address of the first cotenant listed on the recorded document.

(3) Any cotenant not designated as a recipient may request a copy of the assessment information from the department.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-138, MCA
History: NEW, 2002 MAR p. 3723, Eff. 12/27/02.

Subchapter 42.19.11 Energy Related Tax Incentives

Mont. Admin. R. 42.19.1102 Treatment of Gasohol Production Facilities

(1) Gasohol production facilities' personal or real property may qualify as class five property as defined in 15-6-135 , MCA, during construction and for the first three years of operation.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, MCA
History: NEW, 1980 MAR p. 1089, Eff. 3/28/80; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 2002 MAR p. 811, Eff. 3/15/02.

Mont. Admin. R. 42.19.1103 Treatment of Ethanol Manufacturing Facilities

(1) Ethanol manufacturing facilities' manufacturing machinery, fixtures, equipment, and tolls used for the production of fuel grade ethanol from grain during the course of the construction and for ten years after initial production of fuel grade ethanol are exempt from property taxation.

(2) Initial production is defined as the commencement of operations, which is defined in ARM 42.19.1212.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-138, 15-6-220, MCA
History: NEW, 2002 MAR p. 811, Eff. 3/15/02; AMD, 2006 MAR p. 3102, Eff. 12/22/06.

Mont. Admin. R. 42.19.1104 Property Tax Exemption for Nonfossil Energy System

(1) The property owner of record, or the property owner's agent, must make application to the local department office for classification as a nonfossil form of energy generation on a form available on the department's website or from the local department office before March 1 to be considered for exemption for the current tax year.

(2) When a completed application is received by the local department field office, the department staff will adhere to the following procedures:

(a) The energy system will be inspected and the application considered in time to assure that any exemption will affect the property's value in the earliest possible tax year following the date of application.

(b) If the energy system is completed prior to March 1 of a year, the application must be filed by March 1 of that year in order for an exemption to apply for the full ten-year period.

(c) If the energy system is completed after March 1 of a year, the application must be filed by March 1 of the next year in order for an exemption to apply for the full ten-year period.

(d) If an applicant misses the deadlines outlined above, they will lose one year of exemption potential for every deadline date that passes. For example:

(i) If an individual completes installation of an energy system in August of the current year, but does not apply for an exemption by March 1 of the next year, the exemption would be allowed for a total of nine years.

(ii) If the individual completes installation of an energy system in July of the current year, but does not apply for an exemption until two years later, the individual has a total exemption potential of eight years.

(e) The maximum exemption for residential property is $20,000 in market value as determined by the department and for nonresidential property, it is $100,000 in market value as determined by the department. If the value of the energy system appears to exceed those amounts, the property data and exemption application will be reviewed for consideration by the department. Any market value over $20,000 for residential property or $100,000 for nonresidential property will not receive the exemption.

(3) The following criteria must be satisfied in order for any energy system to receive exemption (all criteria must be satisfied for successful application):

(a) The system must be able to generate energy by use of "recognized nonfossil" means.

(b) The system's components must be unique to the system and not standard components of the structure for which it provides energy.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-224, 15-32-102, MCA
History: NEW, Eff. 3/7/76; AMD, 1980 MAR p. 1089, Eff. 3/18/80; AMD and TRANS, from ARM 42.19.1101, 1986 MAR p. 2011, Eff. 12/12/86; AMD, 2000 MAR p. 3560, Eff. 12/22/00; AMD and TRANS, from ARM 42.4.103, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; AMD, 2017 MAR p. 1674, Eff. 9/23/17.

Mont. Admin. R. 42.19.1105 Alternate Renewable Energy Generation Facilities Property Tax Exemption - Less Than One Megawatt

(1) For machinery and equipment to qualify for the alternative renewable energy generation facilities exemption, the facility must be powered by an alternative renewable energy source as defined in 90-4-102, MCA, and be less than one megawatt.

(2) To obtain the alternative renewable energy generation facilities tax exemption for machinery and equipment that has a nameplate capacity of less than one megawatt, the property owner of record or the property owner's agent must submit an application to the Department of Revenue, P.O. Box 5805, Helena, Montana 59604-5805, on or before March 31 of the year which an exemption is sought.

History

Authorizing statute(s): 15-1-201, 15-1-217, MCA
Implementing statute(s): 15-6-225, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/04; AMD and TRANS, from 42.4.111, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; TRANS, from 42.4.4105, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.19.1106 Property Tax Exemption - Noncommercial Electrical Generation Machinery and Equipment

(1) In order to obtain a property tax exemption for noncommercial electrical generation machinery and equipment, the property owner of record or the property owner's agent must notify the department on its annual reporting form that the existence of noncommercial electrical generation machinery and equipment is in their ownership or use.

(2) The department will request from the property owner the appropriate information to determine the amount of the property tax exemption. The department will also verify with the Department of Environmental Quality that the electrical generation machinery and equipment comply with the provisions of 75-2-211 and 75-2-215, MCA, and the supporting documentation. The department will determine the amount of the property tax exemption. The applicant will be advised in writing of the decision.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-225, 75-2-211, 75-2-215, MCA
History: NEW, 2002 MAR p. 1094, Eff. 4/12/02; AMD and TRANS, from ARM 42.4.114, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; TRANS, from 42.4.4108, 2024 MAR p. 2162, Eff. 9/7/24.

Subchapter 42.19.12 New Industrial Property

Mont. Admin. R. 42.19.1201 Treatment of Agricultural Processing

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1992 MAR p. 2559, Eff. 11/26/92; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1202 Treatment of Property Not Used as Part of the New Industry

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, 15-24-1401, 15-24-1402, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 2004 MAR p. 490, Eff. 2/27/04; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1203 Treatment of Air and Water Pollution Control Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 1996 MAR p. 3220, Eff. 12/20/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1204 Treatment of Motor Vehicles

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1205 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-24-2405, MCA
Implementing statute(s): 15-24-2403, 15-24-2404, MCA
History: NEW, 2006 MAR p. 3102, Eff. 12/22/06; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1211 Period of Classification as New Industrial Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2014 MAR p. 2795, Eff. 11/7/14; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1212 Commencement of Operations

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 2004 MAR p. 490, Eff. 2/27/04; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1213 Changes in Operations

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1221 Opinion Letters

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 2004 MAR p. 490, Eff. 2/27/04; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1222 Application for Special Classification

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, 15-24-1401, 15-24-1402, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 1996 MAR p. 3220, Eff. 12/20/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1223 Processing of Application

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-192, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1996 MAR p. 3220, Eff. 12/20/96; AMD, 2004 MAR p. 490, Eff. 2/27/04; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1224 Adverse Impacts

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-6-192, MCA
Implementing statute(s): 15-6-135, 15-6-192, MCA
History: NEW, 1980 MAR p. 1088, Eff. 3/28/80; AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 2004 MAR p. 490, Eff. 2/27/04; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1235 Property Tax Abatement for New or Expanding Industry

(1) An applicant must make application to the governing body of the affected taxing jurisdiction on a form provided by the department. The form shall include, among other information, a specific description of the improvement or modernized process for which specialized tax treatment is requested, the date when construction or installation is to commence or has commenced and the date when it is to be completed. The governing body of the affected taxing jurisdiction must approve the application and pass an approving resolution before tax benefits under 15-24-1402, MCA, can be received.

(2) In order to be considered for the current tax year, an application must be filed on the form available from the department on or before March 1 of the tax year.

(3) The applicant must notify the department by sending a copy of the approved application described in (1) within 30 days after receiving approval from the affected taxing jurisdiction.

(4) The preceding year and current year's additions and investments may be considered and included for purposes of determining whether the threshold investment levels specified in 15-24-1401, MCA have been met.

(5) The department shall appraise the applicant's property after expansion or modernization.

(6) Only the increased value attributed to the expansion or modernization will receive tax incentives under 15-24-1402, MCA.

(7) Additional expansion or modernization of property constructed in tax years subsequent to an expansion approved for tax incentives under 15-24-1402, MCA, does not qualify for an additional tax incentive unless an additional application is filed and an approving resolution passed.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-24-1401, 15-24-1402, MCA
History: NEW, 1988 MAR p. 742, Eff. 4/14/88; TRANS, from ARM 42.19.1220, AMD, 1991 MAR p. 2638, Eff. 12/27/91; AMD, 1992 MAR p. 2559, Eff. 11/26/92; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2020 MAR p. 703, Eff. 4/18/20; AMD, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.19.1240 Taxable Rate Reduction for Value Added Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-24-2405, MCA
Implementing statute(s): 15-24-2401, 15-24-2402, 15-24-2403, 15-24-2404, MCA
History: NEW, 1991 MAR p. 2499, Eff. 12/13/91; AMD, 1996 MAR p. 1171, Eff. 4/26/96; AMD, 2004 MAR p. 490, Eff. 2/27/04; AMD, 2006 MAR p. 3102, Eff. 12/22/06; REP, 2017 MAR p. 1674, Eff. 9/23/17.

Subchapter 42.19.13 Tax Sale Certificates

Mont. Admin. R. 42.19.1301 Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-17-212, 15-17-323, MCA
History: NEW, 2001 MAR p. 2431, Eff. 12/7/01; REP, 2017 MAR p. 1674, Eff. 9/23/17.

Mont. Admin. R. 42.19.1302 Form

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-17-212, 15-17-323, MCA
History: NEW, 2001 MAR p. 2431, Eff. 12/7/01; REP, 2017 MAR p. 1674, Eff. 9/23/17.

Subchapter 42.19.14 Local Government Tax Increment Financing Districts (TIFD)

Mont. Admin. R. 42.19.1401 Definitions

The following definitions apply to this subchapter:

(1) "Levy district" means a geographically distinct area where all of the properties are subject to the same combination of taxing jurisdiction's mill levies. Levy districts are created for administrative purposes and do not have any taxing authority.

(2) "Targeted economic development district (TEDD)" means a district created pursuant to 7-15-4279, MCA, that contains a provision for tax increment financing as provided for in 7-15-4282, MCA.

(3) "Tax increment financing district (TIFD)" means the area within the external boundaries of an urban renewal district (URD) or a targeted economic development district (TEDD) that:

(a) has been legally created pursuant to the provisions of 7-15-4282, MCA; and

(b) contains a provision for the use of tax increment financing.

(4) "Taxing jurisdiction" means a government entity authorized to impose tax on property. A taxing jurisdiction may include the properties in one or more levy districts.

(5) "Urban renewal district (URD)" means a district created pursuant to 7-15-4202 through 7-15-4218 and 7-15-4280 through 7-15-4284, MCA, that contains a provision for tax increment financing as provided for in 7-15-4282, MCA.

(6) "Value-adding economic projects" means projects that, through the employment of knowledge or labor, add value to industrial or technological products, processes, or export services resulting in the creation of new wealth.

(a) Value-adding economic projects include projects:

(i) that mechanically or chemically transform materials or substances into new products in the manner defined as manufacturing in the North American Industry Classification System Manual prepared by the United States Office of Management and Budget; and

(ii) that, through a technological process, transform materials, substances, or information into new products.

(b) Value-adding economic projects do not include projects undertaken by service-based businesses or industries including, but not limited to, hotels, restaurants, automobile dealerships, and other similar businesses or industries.

(c) Nothing in this section precludes service-based businesses or industries from being located within a targeted economic development district (TEDD), provided the primary purpose of the TEDD is the development of infrastructure to encourage the location and retention of value-added economic projects.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4202, 7-15-4203, 7-15-4204, 7-15-4205, 7-15-4206, 7-15-4207, 7-15-4208, 7-15-4209, 7-15-4210, 7-15-4211, 7-15-4212, 7-15-4213, 7-15-4214, 7-15-4215, 7-15-4216, 7-15-4217, 7-15-4218, 7-15-4278, 7-15-4279, 7-15-4280, 7-15-4281, 7-15-4282, 7-15-4283, 7-15-4284, 7-15-4285, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2014 MAR p. 1104, Eff. 5/23/14; AMD, 2015 MAR p. 1281, Eff. 8/28/15; AMD, 2016 MAR p. 1968, Eff. 10/29/16; AMD, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1402 Notification of the Creation or Amendment of a Tax Increment Financing District - Timing

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4283, 7-15-4284, 15-10-202, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; REP, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1403 Notification Requirements for the Creation or Amendment of an Urban Renewal District (urd) with a Tax Increment Financing Provision

(1) A local government may create or amend a URD containing a tax increment financing provision pursuant to Title 7, chapter 15, parts 42 and 43, MCA.

(2) Before the department can certify the base taxable value of property located within a newly created or amended district, the local government must notify the department of the intent to create or amend a URD containing a tax increment financing provision. The notification must include:

(a) the contact information for the person designated to interact with the department;

(b) the name of the district;

(d) a legal description accompanied by a map illustrating the district's proposed boundary;

(e) GIS data files that include locational information in the form of coordinates, points, lines, polygons, etc., if available; and

(f) confirmation that the property within the proposed district is contiguous and not included within an existing URD or TEDD district.

(3) If the local government wants the department to provide a list of the affected real, separately assessed improvements, personal and centrally assessed properties within the district, the local government must provide the notification information required in (2)(a) through (c), and preliminary versions of the notification information described in (2)(d) and (e), to the department no later than August 1 of the desired base year. Within 60 days after receiving the notification, the department will provide the following to the designated contact:

(a) confirmation that no issues were identified with the preliminary district boundary; and

(b) a list of the affected properties.

(4) If the local government does not need the department to provide a list of the affected real, separately assessed improvements, personal and centrally assessed properties within the district, the local government must provide the notification information required in (2)(a) through (c), and preliminary versions of the notification information described in (2)(d) and (e), to the department no later than December 1 of the desired base year.

(5) By no later than February 1 of the calendar year following the creation of the district, the local government must provide the department with the following:

(a) final versions of the notification information described in (2)(d) and (e), if not previously provided;

(b) a copy of the executed resolution of necessity required by 7-15-4210, MCA. The executed resolution must contain:

(i) an effective date prior to the date on which the URD is created;

(ii) the finding of blight, as required by 7-15-4210(1), MCA; and

(iii) a statement of necessity regarding the interest of public health, morals, or welfare of the residents, as required by 7-15-4210(2), MCA;

(d) a copy of the municipality's planning commission's written recommendation to the local governing body that the urban renewal plan conforms with the local government's growth policy that attaches:

(i) supporting documentation upon which the conformance is based; and

(ii) supporting documentation upon which the exercise of a local governing body's zoning powers is based;

(e) if the documentation in (d) is not available, a copy of the document affirming that the local governing body received no written recommendation from the planning commission and scheduled the public hearing on the urban renewal plan as permitted in 7-15-4214, MCA;

(f) a copy of the published notice of public hearing required under 7-15-4215, MCA;

(g) a copy of the letter that was sent to all property owners in the district;

(h) a list of all addresses to which a copy of the letter was sent;

(i) a list of all the geocodes, assessor codes, and centrally assessed property within the district;

(j) a copy of the local government's urban renewal plan pursuant to 7-15-4212 and 7-15-4216, MCA, containing the tax increment provision under 7-15-4216, MCA; and

(k) a copy of the ordinance adopting the urban renewal plan with the tax increment provision; pursuant to 7-15-4216 or 7-15-4284, MCA.

(6) Within 20 business days after the department receives the documentation required in (2) and (5), the department will send notification to the local government whether the documentation is complete and correct for the desired base year.

(a) If supporting documentation submitted with the application is deficient, the department will notify the local government and request additional information.

(b) By March 1, the department must receive the local government's complete and corrected documentation to establish a base year effective January 1 of the previous year.

(c) If supporting documentation submitted with the application is complete and correct, the department will notify the local government and will report the base, actual, and incremental taxable values to the taxing jurisdictions by the first Monday in August of the calendar year following receipt of the notification in (2).

(d) If supporting documentation submitted for creation or amendment of a URD is not complete and correct, the department will report the base, actual, and incremental taxable values to the taxing jurisdictions by the first Monday in August of the calendar year following the year which the complete and correct supporting documentation is submitted to the department.

(7) All correspondence and documentation must be mailed to the Department of Revenue, Property Assessment Division at P.O. Box 8018, Helena, MT 59604-8018, or e-mailed to DORTIFinfo@mt.gov.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4202, 7-15-4210, 7-15-4215, 7-15-4216, 7-15-4282, 7-15-4283, 7-15-4284, 7-15-4285, 15-10-202, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2014 MAR p. 1104, Eff. 5/23/14; AMD, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1404 Notification Requirements for the Creation or Amendment of a Targeted Economic Development District (tedd) with a Tax Increment Financing Provision

(1) A local government may create or amend a TEDD containing a tax increment financing provision pursuant to Title 7, chapter 15, parts 42 and 43, MCA. The department will review a local government's urban renewal district (URD) or TEDD processes, documents, and information required under those statutes and these rules to determine fulfillment of a district's purpose and the specific requirements provided under 7-15-4279, MCA, in the department's TEDD taxable value certification process.

(2) Before the department can certify the base taxable value of property located within a newly created or amended district, the local government must notify the department of the intent to create or amend a TEDD containing a tax increment financing provision. The notification must include:

(a) the contact information for the person designated to interact with the department;

(b) the name of the district;

(d) a legal description accompanied by a map illustrating the district's proposed boundary;

(e) GIS data files that include locational information in the form of coordinates, points, lines, polygons, etc., if available; and

(f) confirmation the property within the proposed district is contiguous and not included within an existing URD or TEDD district.

(3) If the local government wants the department to provide a list of the affected real, separately assessed improvements, personal and centrally assessed properties within the district, the local government must provide the notification information required in (2)(a) through (c), and preliminary versions of the notification information described in (2)(d) and (e) to the department no later than August 1. Within 60 days of receiving the notification, the department will provide the following to the designated contact:

(a) confirmation that no issues were identified with the preliminary district boundary; and

(b) a list of the affected properties.

(4) If the local government does not need the department to provide a list of the affected real, separately assessed improvement, personal and centrally assessed properties within the district, the local government must provide the notification information required in (2) to the department no later than December 1.

(5) By no later than February 1 of the calendar year following the creation of the district, the local government must provide the department with the following:

(a) final versions of the notification information described in (2)(d) and (e), if not previously provided;

(b) a copy of the executed resolution of necessity required by 7-15-4280, MCA. The executed resolution must contain:

(i) an effective date prior to the date on which the TEDD was created;

(ii) the infrastructure deficiency finding, as required by 7-15-4280(1), MCA; and

(iii) a statement of necessity regarding the welfare of the residents, as required by 7-15-4280(1), MCA;

(c) a copy of the local government's finding that the TEDD is zoned either for uses in accordance with the area local growth policy as defined in 76-1-103, MCA, for uses in accordance with the development pattern and zoning regulations, or the development district adopted under Title 76, chapter 2, part 1, MCA, that includes documentation upon which the accordance with zoning is based;

(d) a copy of the resolution adopting the zoning of the district, pursuant to 7-15-4279, MCA;

(e) a copy of the resolution adopting the growth policy, pursuant to 76-1-604, MCA, if applicable;

(f) a copy of the published notice of public hearing required under 7-15-4215, MCA;

(g) a copy of the letter that was sent to all property taxpayers in the district;

(h) a list of all addresses to which a copy of the letter was sent;

(i) a list of all the geocodes, assessor codes, and centrally assessed property within the district;

(j) a copy of the local government's comprehensive development plan for the district pursuant to 7-15-4279 and 7-15-4284, MCA, containing the tax increment provision; and

(k) a copy of the executed ordinance adopting the comprehensive development plan for the district with the tax increment financing provision pursuant to 7-15-4284, MCA.

(6) Within 20 business days after the department receives the required documentation in (2) and (5), the department will send notification to the local government whether the documentation is complete and correct for the desired base year.

(a) If supporting documentation submitted with the application is deficient, the department will notify the local government and request additional information.

(b) By March 1, the department must receive the local government's complete and corrected documentation to establish a base year effective January 1 of the previous year.

(d) If supporting documentation submitted for creation or amendment of a TEDD is not complete and correct, the department will report the base, actual, and incremental taxable values to the taxing jurisdictions by the first Monday in August of the calendar year following the year which the complete and correct supporting documentation is submitted to the department.

(7) All correspondence and documentation must be mailed to the Department of Revenue, Property Assessment Division at P.O. Box 8018, Helena, MT 59604-8018, or e-mailed to DORTIFinfo@mt.gov.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4279, 7-15-4282, 7-15-4283, 7-15-4284, 7-15-4285, 15-10-202, 15-10-420, 76-1-103, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2014 MAR p. 1104, Eff. 5/23/14; AMD, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1405 New Technology Tax Increment Financing Districts – Information Required to Enable the Department to Certify Base Taxable Value

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4216, 7-15-4282, 7-15-4284, 7-15-4295, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; REP, 2014 MAR p. 1104, Eff. 5/23/14.

Mont. Admin. R. 42.19.1406 New Aerospace Transportation and Technology Tax Increment Financing Districts – Information Required to Enable the Department to Certify Base Taxable Value

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4216, 7-15-4282, 7-15-4284, 7-15-4296, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; REP, 2014 MAR p. 1104, Eff. 5/23/14.

Mont. Admin. R. 42.19.1407 Determination of Base and Incremental Taxable Values of Urban Renewal Districts (urd) or Targeted Economic Development Districts (tedd)

(1) The department will determine the:

(a) base taxable value for a URD or TEDD as the taxable value of all property located within the district, exclusive of any Title 15, chapter 24, MCA, locally approved abatement reductions, as of January 1 of the base year established in accordance with ARM 42.19.1403(6) and 42.19.1404(6); and

(b) incremental taxable value by subtracting the base taxable value identified in (1)(a) from the total taxable value of all property within the district.

(2) The incremental value of a district cannot be less than zero.

(3) The department will report the base, actual, and incremental taxable values to all affected taxing jurisdictions by the first Monday of August each year when the department certifies values pursuant to 15-10-202, MCA.

(4) A URD or TEDD may include one or more levy districts. If a URD or TEDD includes more than one levy district, the department will apportion the base taxable value and the incremental taxable value between the levy districts by apportioning the base taxable value and the incremental taxable value to each levy district according to its contribution to the total taxable value of the URD or TEDD.

(5) A local government that amends the boundaries or makes changes within a valid URD or TEDD, pursuant to the provisions of Title 7, chapter 15, parts 42 and 43, MCA, shall follow the process described in ARM 42.19.1403 or 42.19.1404.

(a) In cases where a boundary amendment removes property from an existing URD or TEDD:

(i) the removed property shall be considered newly taxable pursuant to 15-10-420, MCA;

(ii) the base year of the original URD or TEDD will not change;

(iii) the total value of the URD or TEDD will be reduced by the value of the property that has been removed from the district. The value of the property being removed will be the value determined by the department for ad valorem tax purposes as of January 1 of the year in which the department certifies the amendment; and

(iv) The reduced base value of the URD or TEDD will be determined by the following formula:

Official policy figure

(b) In cases where a URD or TEDD boundary amendment adds new property to an existing URD or TEDD:

(i) the base year and base taxable value of the properties located within the original URD or TEDD will not change;

(ii) the base taxable value of the property being added to the URD or TEDD by the boundary amendment will be the actual taxable value determined by the department for ad valorem tax purposes as of January 1 of the year in which the department certifies the amendment;

(iii) the base taxable value calculated pursuant to (ii) of the property being added to the URD or TEDD will be added to the existing base taxable value of the URD or TEDD to create the new base taxable value that shall be used to calculate the incremental taxable value of the URD or TEDD; and

(iv) the incremental value of the URD or TEDD after the boundary amendment will be calculated using the new base taxable value determined in (iii).

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4284, 7-15-4285, 15-10-202, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2014 MAR p. 1104, Eff. 5/23/14; AMD, 2016 MAR p. 1968, Eff. 10/29/16; AMD, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1408 Determination and Report of Base Year, Actual, and Incremental Taxable Values – Timing

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4284, 7-15-4285, 15-10-202, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2016 MAR p. 1968, Eff. 10/29/16; REP, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1409 Notification of Amendment of Boundaries or Changes Within an Existing Tax Increment Finance District - Newly Taxable Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4282, 7-15-4284, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; REP, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1410 Information Required by the Department to Certify Base Year Taxable Values of an Amended or Changed Tax Increment Financing District (tifd)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4282, 7-15-4284, 7-15-4285, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2014 MAR p. 1104, Eff. 5/23/14; REP, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1411 Determination of Base Year Taxable Values of an Amended Tifd – Reporting of Base Year, Actual, and Incremental Taxable Values

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4282, 7-15-4284, 7-15-4285, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2016 MAR p. 1968, Eff. 10/29/16; REP, 2019 MAR p. 345, Eff. 3/30/19.

Mont. Admin. R. 42.19.1412 Local Government Reporting Requirements

(1) No later than October 1 of each year, the local government must provide the department with a copy of each bond resolution or ordinance required under 7-15-4301, MCA, and on a form provided by the department, must report the following information:

(a) contact for the district;

(b) year the district expires;

(i) dollar amount of the bond(s) issued;

(ii) term of year on the bond(s) issued; and

(iii) retirement of any bond(s);

(d) details on remittance agreements including:

(i) whether the district has a remittance agreement;

(ii) the names of the agreements; and

(iii) the dollar amount remitted; and

(e) a description of changes or amendments, if any, made to the district in the previous fiscal year.

(2) All correspondence and documentation must be mailed to the Department of Revenue, Property Assessment Division at P.O. Box 8018, Helena, MT 59604-8018 or e-mailed to DORTIFinfo@mt.gov.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-15-4282, 7-15-4284, 7-15-4286, 7-15-4290, 7-15-4301, 15-10-420, MCA
History: NEW, 2008 MAR p. 1490, Eff. 7/18/08; AMD, 2014 MAR p. 1104, Eff. 5/23/14; AMD, 2019 MAR p. 345, Eff. 3/30/19.

Chapter 42.20 Real Property

Subchapter 42.20.1 Valuation of Real Property

Mont. Admin. R. 42.20.101 City and Town Lots and Improvements

(1) The assessment of city and town lots and the assessment of rural and urban improvements shall be at market value as determined by an appraisal using one or more of the three accepted approaches to determine value:

(a) the cost approach, where the department's Appraisal Guide and national cost service manuals, as indicated in ARM 42.18.122, are used;

(b) the sales comparison approach; and

(2) Said appraisals shall be made in the same manner as provided in 15-7-101 through 15-7-103, MCA, and 15-8-112, MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 985, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2017 MAR p. 2090, Eff. 11/10/17.

Mont. Admin. R. 42.20.102 Property Tax Exemption Application Process and Requirements

(1) A property owner of record, their agent, or a federally recognized tribe who seeks a property tax exemption authorized under 15-6-201, 15-6-203, 15-6-209, 15-6-221, and 15-6-227, MCA, must submit a department property exemption application form (application) and provide the department with the documents and information specific to the property type and the exemption sought, as required by this rule and ARM 42.20.102A.

(2) All applications submitted to the department for property owned by an applicant as of January 1 must be postmarked no later than March 1 of the year in which the exemption is sought.

(3) All applications postmarked after March 1 will be considered for the following tax year only, except as provided in (a) and (b).

(a) If an applicant acquires ownership of the property after January 1 but before March 1, the application must be submitted and postmarked no later than 30 days after the acquisition date. For example, an applicant who acquires ownership of property on February 15, must submit an application postmarked no later than March 17.

(b) If an applicant is applying for an exemption in response to the department's written notification that the property will be placed on the tax roll for the current tax year, the application must be postmarked no later than 30 days after the date of the department's notice. For example, an applicant who is notified by the department on February 15 of the property's placement on the tax roll, must submit an application postmarked no later than March 17.

(4) The department may extend the March 1 deadline to June 1 if:

(a) the applicant was unable to apply before March 1 due to an infirmity that existed between January 1 and June 1; or

(b) there is new construction on the property, which was exempt in a prior year, in which case the applicant must:

(i) submit a written statement, plus any supporting documentation, explaining any circumstances that prevented timely filing of the application; and

(ii) provide a completed application, including all applicable supporting documentation in accordance with this rule.

(5) For each application submitted, the applicant must:

(a) identify each parcel by geocode, assessor code, legal description, or physical address;

(b) state the specific and actual use of the real or personal property;

(c) provide a copy of a recorded deed, or a contract for deed, or other legally sufficient document identifying ownership if the application is for a real property exemption;

(d) provide a photograph of the property;

(e) provide a copy of the title of motor vehicle or mobile home, or, if title is not applicable, a letter identifying ownership, if the application is for a personal property exemption; and

(f) include the additional documents required for the specific property type described in ARM 42.20.102A.

(6) Unless the applicant is a federally recognized tribe, the applicant must also provide:

(a) in the case of an entity applicant, a copy of the applicant's organization documents, such as articles of incorporation, articles of organization, or partnership agreement;

(b) verification of tax-exempt status by the Internal Revenue Service or a written statement explaining why the exemption verification is not available.

(7) A federally recognized tribe must include a tribal resolution that:

(a) identifies the fee land, by legal description;

(b) states the type of exemption the tribe is requesting; and

(8) Upon receipt of the application and the documents and information required by this rule and ARM 42.20.102A, the department will perform a field evaluation. The department approves or denies the application and notifies the applicant and the county treasurer of its decision, in writing, as provided in 15-6-235, MCA.

(9) Approved exemptions apply to ad valorem (general) taxes only; organizations are responsible for any special fees or assessments charged by local taxing jurisdictions.

(10) If property is owned by a governmental entity (such as city, county, or state), the federal government (unless Congress has passed legislation allowing the state to tax property owned by a federal entity), tribal government, nonprofit irrigation districts organized under Montana law, municipal corporations, public libraries, or rural fire districts and other entities providing fire protection under Title 7, chapter 33, MCA, the following exemption criteria apply:

(a) property must be assessed and taxed from the date of change from a nontaxable status to a taxable status, as required under 15-16-203, MCA;

(b) if the property is tax-exempt as of January 1 of the current tax year and is sold to a nonqualifying purchaser after January 1 of the current tax year, it becomes taxable upon the date of transfer of the property to the nonqualifying purchaser. The tax is prorated according to 15-16-203, MCA;

(c) if a property is tax-exempt, as in (b), and is sold as tax-deed property to a nonqualifying purchaser after January 1 of the current tax year, it becomes taxable on January 1 following the execution of such contract or deed as provided in 7-8-2307, MCA; and

(d) if a tribal government is requesting an exemption of an essential government service, as provided in 15-6-201, MCA, that service must be identified in the application.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 7-8-2307, 15-6-201, 15-6-203, 15-6-209, 15-6-221, 15-6-235, MCA
History: NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1988 MAR p. 737, Eff. 4/15/88; AMD, 1990 MAR p. 1714, Eff. 8/31/90; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2013 MAR p. 2446, Eff. 12/27/13; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2090, Eff. 11/10/17; AMD, 2022 MAR p. 1941, Eff. 9/24/22.

Mont. Admin. R. 42.20.102A ADDITIONAL DOCUMENTATION REQUIREMENTS FOR PROPERTY TAX EXEMPTION APPLICATIONS

42.20.102A ADDITIONAL DOCUMENTATION REQUIREMENTS FOR PROPERTY TAX EXEMPTION APPLICATIONS

(1) In addition to the property tax exemption application requirements of ARM 42.20.102, a property owner of record, the property owner's agent, or a federally recognized tribe must submit with its application the additional documentation provided in (2) through (17), as applicable, based on the specific use of the property.

(2) For property used for religious purposes:

(a) proof that the buildings and furnishings are owned by a church and are used for actual religious worship or for the residences of the clergy;

(b) proof that the church's land parcel does not exceed 15 acres or one acre for a clergy residence if the land and improvements are used for educational or youth recreational activities, and are available for public use; and

(3) For property owned by a federally recognized tribe and used for religious purposes, a copy of the tribal resolution that designates the land and the improvements upon the land, not to exceed 15 acres, as sacred land to be used exclusively for religious purposes.

(4) For property owned and used exclusively for agricultural and horticultural societies, documentation verifying the property is not operated for gain or profit.

(5) For property used exclusively for educational purposes, including dormitories and food service buildings for the use of students in attendance and other structures necessary for the operation and maintenance of an educational institution:

(a) proof the property does not exceed 80 acres;

(b) verification that the organization is not operated for gain or profit;

(d) a copy of the lease agreement if the property is not owned by the educational organization.

(6) For property of any acreage used for educational purposes and owned by a tribal corporation created for the sole purpose of establishing schools, colleges, and universities, the documentation stated in (5).

(7) For property used exclusively for nonprofit healthcare facilities:

(a) a copy of the healthcare facility's license from the Department of Public Health and Human Services; and

(b) a copy of the lease agreement if the property is not owned by the non-profit organization.

(8) For property used solely in connection with cemeteries:

(a) documentation of a permanent care and improvement fund as provided in Title 35, chapter 20, part 3, MCA; and

(b) verification that the property is not maintained or operated for gain or profit.

(9) For property owned by a purely public charity with acreage not exceeding 160 acres, or where the applicant is requesting an 8-year exemption for up to 15 acres:

(a) a copy of the lease agreement if leasing the property from a governmental organization; and

(b) verification the property is directly used for purely public charitable purposes.

(10) For property owned by public museums, art galleries, zoos, and observatories:

(a) verification that the property is not operated for gain or profit;

(b) verification that the real and personal property is reasonably necessary for use in connection with the public display or observatory use; and

(c) if the property is owned by individuals, documentation verifying the property is actually used by the governmental entity or nonprofit organization as a part of its public display, held for future display, or used to house or store a public display.

(11) For property owned by an organization that operates facilities exclusively for the care of persons with developmental disabilities, persons with mental illness, or persons with physical or mental impairments that constitute or result in substantial impediments to employment, verification that the organization is not operated for gain or profit.

(12) For property owned by an organization that operates facilities for the care of retired, aged, or chronically ill:

(a) verification that the organization is not operated for gain or profit; and

(b) verification that the residents meet the age and gross household income requirements provided in 15-30-2338, MCA.

(13) For property used for parks and recreational facilities:

(a) verification that the park or recreational facility is open to the public;

(b) verification that the property consists only of land - with no buildings - and is leased to a municipality or taxing unit for less than $100 a year;

(c) verification that the property, not to exceed 10 acres, is used exclusively as a public park, for recreation, or for landscape beautification purposes; and

(d) if the applicant is a federally recognized tribe, a copy of a tribal resolution that designates the property as park land, not to exceed 640 acres, or to be used exclusively for recreational facilities.

(14) For property used by a veterans' society or organization, as provided in 15-6-203, MCA, and the applicant is other than the society or organization, the applicant must provide a copy of the lease verifying the savings from the property tax exemption is realized by the society or organization.

(15) For property owned by a nonprofit community service organization, the applicant must provide verification that the organization has been an active community service continuously from January 1, 1981, in accordance with 15-6-209(2), MCA.

(16) For property used for low-income housing, as provided in 15-6-221, MCA:

(a) verification that the property is dedicated to providing affordable housing to low-income tenants; and

(b) a copy of the hearing minutes or newspaper notification, that a public hearing was held to consider whether the property meets a community housing need.

(17) For property used for low-income housing and is owned and operated by an entity with the ownership structure described in 15-6-221(1)(a)(i), MCA:

(a) a copy of the IRS tax exemption status letter, if a limited partnership, stating the general partner is a nonprofit corporation with an IRS 501(c)(3) exemption;

(b) a copy of the Montana Board of Housing letter allocating low-income tax credits;

(d) verification that at least 20 percent of the residential units are rent-restricted and rented to tenants whose household incomes do not exceed 50 percent of the median family income for the county, or at least 40 percent of the residential units are rent-restricted to persons whose household incomes do not exceed 60 percent of the median income for the county;

(e) a letter stating that the property meets a public purpose in providing housing to an underserved population; and

(f) a copy of the owner's partnership or operating agreement, or other documentation, that provides that at the end of the compliance period, as that term is defined in 26 U.S.C. 42, the ownership of the property may be transferred to the nonprofit corporation or housing authority general partner.

(18) For property used for low-income housing and owned and operated by a nonprofit corporation, as described in 15-6-221(1)(b), MCA, the applicant must provide verification that the property was constructed using a home investment partnership program grant.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-201, 15-6-203, 15-6-209, 15-6-221, 15-6-235, MCA
History: NEW, 2022 MAR p. 1941, Eff. 9/24/22.

Mont. Admin. R. 42.20.103 Tax Benefits for the Remodeling, Reconstruction, or Expansion of Existing Buildings or Structures

(1) The property owner of record or the property owner's agent must make application to the appropriate governing body in order to be eligible for tax benefits for remodeling, reconstruction, or expansion of existing buildings or structures which are available pursuant to 15-24-1501 , MCA. Application will be made on a form available from the county commissioners of the affected county or, if the construction will occur within an incorporated city or town, on a form available from the city commission or the local governing body. The application to the affected governing body must be made prior to completion of a building permit or prior to commencement of construction. Failure to make application prior to completion of a building permit or prior to commencement of construction will result in the waiver of all construction period tax benefits. Additionally, all subsequent tax benefits, if approved, will be calculated as of the date the building permit was completed or as of the date construction began, whichever is earlier.

(2) Applications from the local governing body must be received by the department for review before April 1 of the tax year for which the benefits are sought. The department will attempt to perform a field evaluation within 30 days of receipt of the application and provide that information to advise the local governing body whether the remodeling, reconstruction, or expansion of the existing building or structure increases the taxable value of that structure or building by at least 2.5%.

(3) The local governing body shall review the application and information from the department to determine whether to approve or to deny the application. A copy of the processed application form reflecting the governing body's decision shall be sent to the local department office in the county in which the property is located.

(4) Sufficient quantities of application forms (AB-56) will be provided to all local governing bodies by the department. Additional application forms will be made available upon request. The application form shall require the submission of the following information by the applicant:

(a) property owner's name;

(b) description of property;

(d) legal description of property;

(e) mailing address of owner of property, including:

(i) city;

(ii) state; and

(iii) zip code;

(f) taxable value increase due to remodeling;

(g) starting date of the remodeling, reconstruction, or expansion; and

(h) owner's signature.

(5) For purposes of determining the eligibility for tax benefits, the construction period for a specific project may not exceed 12 months with the following exception. If it is determined to the satisfaction of all affected local governing bodies that the construction period for a specific project will exceed 12 months, an extension may be granted, at the time of application, by approval of all affected local governing bodies. The length of the extension granted must be indicated on the application form.

(6) The computation of tax benefits will be dependent upon the approval of the application by all affected governing bodies.

(7) For projects that are entirely, physically located outside the boundaries of incorporated cities or towns, the governing body of the affected county has sole authority to approve the tax benefits for the project. If approved, the tax benefits will apply only to the number of mills levied and assessed for high school district and elementary school district purposes and to the number of mills levied and assessed by the county governing body. The tax benefits do not apply to statewide levies.

(8) If the project is entirely, physically located within an incorporated city or town, both the governing body of the affected county and the governing body of the incorporated city or town must approve the application by resolution before all available tax benefits may be extended to the project. If the city approves the application and the county rejects the application, the tax benefits will apply only to the number of mills levied and assessed for high school district and elementary school district purposes within the incorporated city or town and to the number of mills levied and assessed by the incorporated city or town. The number of mills levied and assessed by the county governing body will not be affected nor will any tax benefits be extended by the county to the project.

(9) Tax benefits will never include any relief from statewide levies.

(10) Except as provided in (1) , only additional value created after an application has been filed may be considered for tax benefits according to this rule.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-24-1501, MCA
History: NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 2002 MAR p. 3723, Eff. 12/27/02.

Mont. Admin. R. 42.20.104 Comparable Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-101, MCA
History: NEW, 1985 MAR p. 2019, Eff. 12/27/85; REP, 2002 MAR p. 3723, Eff. 12/27/02.

Mont. Admin. R. 42.20.105 Valuation of Condominiums or Townhomes

(1) The department will apply an appraisal method for condominiums or townhomes, as defined in 70-23-102, MCA, in accordance with 15-8-111 and 15-8-511, MCA, which must provide for a separate assessment of each condominium or townhome unit.

(2) The sales comparison approach is used when comparable sales are available and the common elements are included in individual unit values. When comparable sales are not available, the cost approach must be used.

(3) The income approach is used to value commercial condominium units when reliable income and expense data is available and the common elements of commercial condominiums are included in individual unit values. When reliable income and expense data is not available, the cost approach may be used.

(4) When the cost approach is used to value residential and commercial condominiums, the department will value each unit individually and allocate the value of common area elements to the units based on the percentage of undivided interest in the condominium declaration, as required by 15-8-111(5)(c), MCA.

(5) When the cost approach is used to value townhomes with common area elements, the department will value each unit individually and allocate the value of common area elements to the units based on the percentage of undivided interest in the recorded townhome declaration, if one was filed.

(6) The total appraised value of time-share condominiums in a complex will be calculated and assessed to the owner of record (i.e., the time-share association).

(7) Unit owners seeking a classification change from condominium to townhome must change the legal ownership of the land for the entire complex and the classification change must be ratified by the unit owners in accordance with the unit ownership association entity's governing documents.

(a) The unit ownership association entity must submit a Request for Townhome Classification form located at http://www.mtrevenue.gov on or before January 1 of the year for which the classification change is requested. Applications received after January 1 will be considered for the following tax year.

(b) In addition to the Request for Townhome Classification form, the department requires the following additional information before changing a property classification from a condominium to a townhome:

(i) a description of the size in square footage or acreage of land associated with each townhome unit;

(ii) the amount of remaining square footage or acreage of land associated with each townhome unit; and

(iii) signed copies of all resolutions, meeting minutes, or other entity governance documents that evidence unit owner ratification of the classification change.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-8-111, 15-8-511, 70-23-102, 70-23-103, 70-23-301, 70-23-403, MCA
History: NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1886, Eff. 8/29/03; AMD, 2012 MAR p.1679, Eff. 8/24/12; AMD, 2017 MAR p. 2090, Eff. 11/10/17; AMD, 2024 MAR p. 2398, Eff. 10/5/24; AMD, Notice No. 2025-7, Eff. 3/29/25.

Mont. Admin. R. 42.20.106 Definitions

The following definitions apply to this subchapter:

(1) "Abstraction" also referred to as extraction, means a method of estimating land value in which the depreciated cost of the improvements on the improved property is estimated and deducted from the total sale price to arrive at an estimated sale price for land.

(2) "Allocation" means a method of estimating land value in which sales of improved properties are analyzed to establish a typical ratio of site value to total property value and this ratio is applied to the property being appraised or the comparable sale being analyzed.

(3) "Attached" as it applies to a manufactured or mobile home means being bolted or cable anchored to the permanent foundation in accordance with Housing and Urban Development standards.

(4) "Breaks in the chain of title" means that the grantor (seller) on the realty transfer certificate (RTC) is not the same as the owner of record reflected on the most recent property tax record.

(5) "Comparable properties" means properties that have similar utility, use, function, and are of a similar type as the subject property. Comparable properties must be influenced by the same set of economic trends, and physical, economic, governmental, and social factors as the subject property. Comparable properties must have the potential of a similar use as the subject property. For any property that does not fit into this definition, the department will rely on the definition of comparable property contained in 15-1-101, MCA.

(a) Within the definition of comparable property, the following types of property are considered comparable:

(i) single-family residences with ancillary improvements are comparable to other single-family residences with ancillary improvements;

(ii) multifamily residences are comparable to other multifamily residences;

(iii) mobile homes are comparable to other mobile homes;

(iv) residential city and town lots are comparable to other residential city and town lots;

(v) commercial city and town lots are comparable to other commercial city and town lots;

(vi) residential tract land is comparable to other residential tract land;

(vii) commercial tract land is comparable to other commercial tract land;

(viii) improvements and outbuildings necessary to the operation of a qualified agricultural property are comparable to other improvements and outbuildings on qualified agricultural properties;

(ix) one-acre sites beneath improvements on land classified as nonqualified agricultural or forestland are comparable to residential tract land;

(x) condominiums are comparable to other condominiums;

(xi) townhomes are comparable to other townhomes;

(xii) industrial improvements are comparable to other industrial improvements;

(xiii) industrial land is comparable to other industrial land; and

(xiv) manufactured homes are comparable to other manufactured homes.

(6) "Complex structure" means improvements that have an intricate or complicated association or assemblage of related parts or units. Some examples include, but are not limited to:

(a) an office building where only a portion of the building is exempt;

(b) a multi-floor hospital; or

(7) "Concrete stringer" as it applies to a manufactured or mobile home means concrete pad poured in place and embedded on firm soil of adequate bearing capacity to support upright posts.

(8) "Construction period" means a period of time that commences with the issuance of a building permit and which concludes when the county appraiser determines that the structure is substantially completed. If more than one building permit is issued, the date on the earliest building permit issued will constitute the commencement of the construction period. In those cases where building permits are not issued, the commencement of the construction period is that time determined by the department to be the start of construction. That determination will coincide with the date the contract is let, the date the application is approved by the governing body, or when site work begins, whichever occurs first.

(9) "Cost approach" means the value of a taxpayer's building(s) is/are developed using construction cost information obtained from across the state.

(10) "Embedded" as it applies to a manufactured or mobile home means to fix securely in and below the surface of the surrounding ground.

(11) "Footing" as it applies to a manufactured or mobile home means the projecting base of a foundation, which transmits the building load to the ground.

(12) "Income approach" means the value of a taxpayer's building(s) is/are developed by using income and expense information obtained from commercial businesses across the state.

(13) "Mass Appraisal" is the process of valuing a group of properties as of a given date, using standardized methods, employing common data, and allowing for statistical testing.

(14) "Mass Appraisal Model" is a mathematical expression of how supply and demand factor interact in a real property market.

(15) "Multiple Regression Analysis (MRA)" means the value of a property is determined using statistical analysis. The statistical analysis helps to define the relationship between the various characteristics of sold properties and those properties' sale prices.

(16) "Perimeter foundation" as it applies to a manufactured or mobile home means the supporting structure, running the total length of all exterior walls of the manufactured home, which transmits the load of the home resting upon it to the earth.

(17) "Permanent foundation" as it applies to a manufactured or mobile home (for taxation purposes) means concrete, concrete block, or wood pier, any of which rests on embedded concrete or concrete block footings. Foundation for this purpose does not include mud sill, pier, and post, wood blocks, concrete block, or other types of temporary support, any of which rests on the ground.

(18) "Property type" is the general description of each parcel's present use.

(19) "Residence" includes all conventionally constructed homes, as well as all mobile homes and manufactured housing.

(20) "Running gear" as it applies to a manufactured or mobile home means axles, tires and wheels, and hitch.

(21) "Sales comparison approach" means that a property's value is developed by comparing sale prices of similar properties (comps) to the taxpayer's property (subject property).

(22) "Single-family residence with ancillary improvements" means:

(a) a structure originally constructed or converted for use and occupancy by a single-family unit and whose primary use is currently one of occupancy by a single-family unit; and

(b) all supportive structures integral to the use of a single-family residence such as attached garages, sheds, and site improvements.

(23) "Subject property" is the property being appraised.

History

Authorizing statute(s): 15-1-201, 15-6-231, 15-7-111, MCA
Implementing statute(s): 15-6-101, 15-6-232, 15-7-111, 15-7-112, 15-7-304, 15-7-306, 15-9-101, 15-24-1501, MCA
History: NEW, 1991 MAR p. 1148, Eff. 7/12/91; AMD, 2002 MAR. p. 3723, Eff. 12/27/02; AMD, 2005 MAR p. 1594, Eff. 8/26/05; AMD, 2006 MAR p. 1961, Eff. 8/11/06; AMD, 2007 MAR p. 119, Eff. 12/22/06; AMD, 2012 MAR p. 2641, Eff. 12/21/12; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.107 Valuation Methods for Commercial Properties

(1) When determining the market value of commercial properties, department appraisers will consider, if the necessary information is available, an income approach valuation.

(2) When the department uses an appraisal method that values land and improvements as a single unit, the department shall establish a combined appraised value of land and improvements. The single unit value method includes, but is not limited to, the comparable sales method for residential condominiums and the income method for commercial property. The assessment notice must contain a single combined appraised value of the land and improvements.

(3) If the department is not able to develop an income model with a valid capitalization rate based on the stratified direct market analysis, the band-of-investment method, or another accepted method, or is not able to collect sound income and expense data, the final value chosen for ad valorem tax purposes will be based on the cost approach or, if appropriate, the market approach to value. The final valuation is that which most accurately estimates market value.

(4) The International Association of Assessing Officers' (IAAO) standards for choice of method guide the department's appraisal decisions. The generally preferred method is the income method to valuation. The department will document in the official record the reason(s) for choosing an alternative method.

History

Authorizing statute(s): 15-1-201, 15-7-139, MCA
Implementing statute(s): 15-7-101, 15-7-102, 15-7-103, 15-7-111, 15-7-139, 15-7-201, 15-44-103, MCA
History: NEW, 1992 MAR p. 2780, Eff. 12/25/92; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2011 MAR p. 334, Eff. 3/11/11; AMD, 2012 MAR p. 1679, Eff. 8/24/12.

Mont. Admin. R. 42.20.108 Income Approach

(1) The income approach is based on the theory that the market value of income-producing property is related to the amount, duration, and certainty of its income-producing capacity. The formula used by the department to estimate the market value of income-producing property through application of the income approach to value is V = I/R where:

(a) "V" is the value of the property to be determined by the department;

(b) "I" is the typical property net income which shall reflect market rents, not investment value income or other rents, for the type of properties being appraised; and

(2) Market rent is the rent that is justified for the property based on an analysis of comparable rental properties, and upon past, present, and projected future rent of the subject property. It is not necessarily contract rent, which is the rent actually paid by a tenant.

(3) The department will periodically request gross rental income and expense information from commercial property owners. Standard forms, developed by the department, will be used to collect the information statewide. Additional methods of obtaining income and expenses information may consist of personal or telephone contacts with owners, tenants, renters or lessees, knowledgeable lending institution officials, real estate brokers, fee appraisers, or any other sources the appraiser deems appropriate including summarized data from recognized firms who collect income and expense information, and appeal or court actions.

(4) The department will review and analyze all annual rental income and expense data collected. As necessary, that data will be adjusted to reflect average conditions and management before entering the data into the computer assisted mass appraisal system. The process must result in defensible estimates of potential gross rents, effective gross incomes, normal operating expenses, and normal net operating incomes.

(5) The department will follow established procedures for validating commercial sales information for the development of income models. Only valid sales will be used for the income and expense module of the computer assisted mass appraisal system.

(6) The department will use generally accepted procedures as outlined by the International Association of Assessing Officers in their text titled "Property Assessment and Appraisal Administration" when determining normal net operating income. The following is an example of the format that will be used:

(a) potential gross rent

(i) - vacancy and collection allowance

(ii) + miscellaneous income

(iii) = effective gross income

(iv) - normal operating expenses

(v) = normal net operating income.

(b) Normal and allowable expenses include:

(i) the cost of property insurance;

(ii) heat, water, and other utilities;

(iii) normal repairs and maintenance;

(iv) reserves for replacement of items whose economic life will expire before that of the structure itself;

(v) management; and

(vi) other miscellaneous items necessary to operate and maintain the property.

(i) depreciation charges;

(ii) debt service;

(iii) property taxes; and

(iv) business expenses other than those associated with the property being appraised.

(d) An effective tax rate will be included as part of the overall capitalization rate.

(7) Depending on data availability, the department may develop income models for various income use groups.

(a) Use groups may be, but are not restricted to:

(i) apartments;

(ii) hotels/motels;

(iii) general retail stores;

(iv) offices;

(v) regional malls;

(vi) multiuse offices;

(vii) warehouses/light manufacturing;

(viii) mini warehouses;

(ix) department stores;

(x) medical buildings;

(xi) auto service buildings;

(xii) manufacturing buildings;

(xiii) parking garages;

(xiv) multiuse sales;

(xv) banks;

(xvi) restaurants;

(xvii) storage buildings;

(xviii) apartment spaces in commercial buildings;

(xix) discount stores/super markets; and

(xx) franchise restaurants.

(b) Location groupings for each use type will be developed by combining the income and expense data in the following sequential order until a statistically significant amount of income and expense data and capitalization rate data is obtained:

(i) commercial intracounty neighborhoods as determined by the department to be economically and demographically homogeneous. In making the commercial neighborhood determinations, the department will consult with real estate and fee appraisal professionals; and

(ii) commercial intercounty neighborhoods the department determines to be economically and demographically homogeneous.

(c) The department may analyze the following information in addition to other appropriate information to ensure economic and demographic homogeneity:

(i) population;

(ii) employment;

(iii) income;

(iv) service availability and infrastructure;

(v) multiple listing service designations;

(vi) zoning and planning board designations;

(vii) proximity to employment/business centers; and

(viii) proximity to federal parks and reservations.

(d) The department may further group data based on the age of improvements if that is determined to be statistically significant.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1992 MAR p. 2780, Eff. 12/25/92; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2005 MAR p. 1594, Eff. 8/26/05.

Mont. Admin. R. 42.20.109 Capitalization Rates

(1) When using the income approach, the department will develop overall capitalization rates which may be according to use type, location, and age of improvements. Rates will be determined by dividing the net income of each property in the group by its corresponding valid sale price. The overall rate chosen for each group is the median of the rates in that group. The final overall rate must include an effective tax rate.

(2) If there are insufficient sales to implement the provisions of (1) , the department will consider using a yield capitalization rate. The rate shall include a return of investment (recapture) , a return on investment (discount) , and an effective tax rate. The discount is developed using a band-of-investment method for types of commercial property. The band-of-investment method considers the interest rate that financial institutions lend on mortgages and the expected rate of return an average investor expects to receive on the equity. This method considers the actual mortgage rates and terms prevailing for individual types of property.

(3) A straight-line recapture rate and effective tax rate will be added to the discount rate to determine the yield capitalization rate.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1992 MAR p. 2780, Eff. 12/25/92; AMD, 2002 MAR p. 3723, Eff. 12/27/02.

Mont. Admin. R. 42.20.110 Tax Exemption and Reduction for the Remodeling, Reconstruction, or Expansion of Certain Commercial Property

(1) To be eligible for tax exemption and tax reduction for remodeling, reconstruction, or expansion of existing commercial buildings or structures which are available pursuant to 15-24-1502 , MCA, the property owner of record or the property owner's agent must make application to the appropriate governing body. The application to the affected governing body:

(a) will be made on a form available from the county commissioners of the affected county or, if the construction will occur within an incorporated city or town, on a form available from the city commission or the local governing body; and

(b) must be made prior to completion of a building permit or prior to commencement of construction.

(2) Failure to make application prior to completion of a building permit or prior to commencement of construction will result in the waiver of all construction period tax exemptions.

(3) Additionally, all subsequent tax reductions, if approved, will be calculated as of the date the building permit was completed, or as of the date construction began, whichever is earlier.

(4) Applications from the local governing body must be received by the department for review before April 1 of the tax year for which the benefits are sought. The department will attempt to perform a field evaluation within 30 days of receipt of the application and provide that information to advise the local governing body whether the remodeling, reconstruction, or expansion of the existing building or structure increases the taxable value of that structure or building by at least 5%.

(5) The local governing body shall review the application and information from the department to determine whether to approve or to deny the application. A copy of the processed application form reflecting the governing body's decision shall be mailed to the local department office in the county in which the property is located.

(6) The department shall provide application forms (AB-56A) to all local governing bodies. The applicant shall provide the following information on the application form:

(a) property owner's name;

(b) description of property;

(d) legal description of property;

(e) mailing address for the owner of property including:

(i) city;

(ii) state; and

(iii) zip code;

(f) taxable value increase due to remodeling;

(g) starting date for the remodeling, reconstruction, or expansion; and

(h) owner's signature.

(7) The computation of tax benefits will be dependent upon the approval of the application by all affected governing bodies.

(8) For projects which are entirely, physically located outside the boundaries of incorporated cities or towns, the governing body of the affected county has sole authority to approve the tax benefits for the project.

(9) If the project is entirely, physically located within an incorporated city or town, both the governing body of the affected county and the governing body of the incorporated city or town must approve the application by resolution before all available tax benefits may be extended to the project. If the city approves the application and the county rejects the application, the tax benefits will apply only to the number of mills levied and assessed by the incorporated city or town. The number of mills levied and assessed by the county governing body will not be affected, nor will any tax benefits be extended by the county to the project.

(10) Except as provided in (1) , only an additional value created after an application has been filed may be considered for tax benefits according to this rule.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-24-1502, MCA
History: NEW, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2005 MAR p. 1594, Eff. 8/26/05.

Mont. Admin. R. 42.20.111 Timberlands East of the Continental Divide, Including Deer Lodge and Silver Bow Counties

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; 1979 MAR p. 987, Eff. 8/31/79; 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.112 Valuation Schedule for Eastern Timberlands

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 987, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.113 Timberland Classification - General Principles

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-201, 15-8-111, MCA
History: NEW, 1983 MAR p. 500, Eff. 5/13/83; AMD, 1985 MAR p. 2023, Eff. 1/1/86; AMD, 1986 MAR p. 558, Eff. 4/11/86; REP, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.114 Timberland Valuation - General Principles

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103 15-8-111, MCA
History: NEW, 1983 MAR p. 500, Eff. 5/13/83; AMD, 1985 MAR p. 2023, Eff. 12/27/85; REP, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.115 Timberlands -- Stumpage Valuation

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1983 MAR p. 500, Eff. 5/13/83; REP, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.116 Timberlands - Discount Multipliers

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1983 MAR p. 500, Eff. 5/13/83; REP, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.117 Classification Change for Manufactured Home or Mobile Home

(1) To change the status of the tax classification of a manufactured home, as required by 15-1-116 and 15-1-118 , MCA, an owner of a manufactured home may obtain a form titled "statement of intent to declare a manufactured home real property" or "statement of reversal of declaration" from the county clerk and recorder.

(2) The only time the department will require the owner of record of a manufactured home, or his agent, to provide the department with a copy of either of the documents in (1) is when they are formally requesting a change in the tax status of a manufactured home from real to personal property or from personal to real property. The owner shall provide a copy of the final document which identifies that the process has been completed for surrendering the title or restoring the certificate of origin or certificate of title. For purposes of this section, the classification of the manufactured home as real property is dependent on it meeting the requirements of this section and (5) .

(3) The owner of a mobile home, or his agent, may request a change in the tax status of a mobile home from real to personal property or from personal to real property, by completing a “Property Adjustment Form” (AB-26) . The form must be returned to the local department office.

(4) If in the normal course of business, the department field staff identifies a manufactured home or mobile home that meets the requirements of (5) , it will be classified as real property.

(5) Manufactured or mobile homes will be valued and classified as real property when the home meets all of the following guidelines:

(a) the running gear is removed; and

(b) the manufactured or mobile home is attached to a permanent foundation, which cannot feasibly be relocated. Two possible foundation types exist:

(i) a concrete, concrete block, or wood perimeter foundation setting on a concrete or concrete block footing;

(ii) concrete stringers with footings or concrete columns with attachment points and the manufactured or mobile home is anchored and permanently blocked and skirted; and

(c) it is placed on land that is owned or being purchased by the owner of the manufactured home or mobile home or, if the land is owned by another person, it is placed on the land with the permission of the landowner.

(6) For tax purposes, any classification change from personal property to real property made by the department that occurs after January 1 will become effective for the succeeding tax year.

(7) For tax purposes, any classification change from real property to personal property made by the department that occurs after January 1 will take immediate effect for the current tax year.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-1-116, 15-1-118, MCA
History: NEW, 2006 MAR p. 88, Eff. 1/13/06; AMD, 2006 MAR p. 1961, Eff. 8/11/06.

Mont. Admin. R. 42.20.118 Tribal Government Application for a Temporary Property Tax Exemption

(1) A federally recognized tribe in Montana is eligible for a temporary property tax exemption of tribal fee land as provided in 15-6-230, MCA.

(2) A federally recognized tribe in Montana must apply for a temporary tribal property tax exemption on an application form available from the department, on or before March 1 of the year for which the exemption is sought. Applications postmarked after March 1 will be considered for the following tax year.

(3) The following documents must be submitted with the tribe's application to the department:

(a) United States Department of Interior Bureau of Indian Affairs (BIA) documentation stating that the initial written request or trust application submitted by the tribe was complete prior to January 1 of the year for which the exemption is sought;

(b) a tribal resolution identifying the fee land, by legal description, for which the tribe has applied for federal trust title; and

(4) The department will provide the following to the county treasurer:

(a) prior to approving an exemption application, written notification that an application is received; and

(b) after the department approves an application, a copy of the approved application.

(5) If a tribe's written request or trust application is denied by the BIA or the five-year exemption period expires while a trust application remains pending before the BIA, the department will:

(a) return the property to the tax rolls and value the property as of January 1 of the year after the tribe's written request or trust application is denied or the five-year exemption period expires; and

(b) provide the county treasurer with the taxable values for each property for each year there was a temporary exemption approved for applications received on or after May 7, 2021.

(6) A tribe shall annually certify to the department, by March 1, that its written request or trust application is still under consideration by the BIA and has not been denied.

(7) A tribe must certify to the department when any property has been taken into trust and is under the management of the United States, and provide the specific date that each property was taken into trust. Upon receipt of the certification, the department will contact the county treasurer and remove the parcel(s) from the tax rolls.

History

Authorizing statute(s): 15-1-201, 15-6-230, MCA
Implementing statute(s): 15-6-230, 15-6-235, MCA
History: NEW, 2012 MAR p. 627, Eff. 3/23/12; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2017 MAR p. 2090, Eff. 11/10/17; AMD, 2022 MAR p. 1943, Eff. 9/24/22.

Mont. Admin. R. 42.20.119 Ammunition Components Manufacturing - Property Tax Exemption Applications

(1) The property owner of record or the property owner's agent must file an application, on a form provided by the department, for a property tax exemption for the manufacture of ammunition components, as defined in 30-20-203, MCA. The exemption applies only to property taxes levied on class eight personal property and to the mills levied on real property for state educational purposes, as described in 30-20-204, MCA. The application filing deadline for each tax year for which the exemption is being sought is March 1.

(2) Applications postmarked after the dates in (1) will be considered for the following tax year unless the department determines, on a case-by-case basis, that the applicant can demonstrate that unusual or personal circumstances existed in the tax year for which the application is being submitted that prevented timely filing of the application.

(3) The following criteria must be met in order to qualify for the exemption:

(a) the person or business entity must engage in the manufacture of ammunition components, in Montana, as their primary business as defined in 30-20-203, MCA;

(b) the products of the business are and must remain available to commercial and individual consumers in the state;

(c) the business entity must sell its products to in-state commercial and individual consumers for a price no greater than that for out-of-state purchasers, including any products that leave the state regardless of destination or purchaser; and

(d) the business entity must not enter into any agreement or contract that could actually or potentially command or commit all of its production to out-of-state consumers or interfere with or prohibit sales and provision of products to in-state consumers.

(4) The exemption applies only to:

(a) class eight personal property;

(b) improvements used to:

(i) manufacture ammunition components; or

(ii) store products manufactured onsite; and

(c) land owned by the person or business entity of any improvement used to either manufacture or store ammunition components. The property to be exempted is measured from each corner of a structure used for the manufacture or storing of ammunition components to a distance of 500 yards. Property owned by the person or business entity that is not used for the manufacture of ammunition components is not subject to the exemption.

(5) The department will verify eligibility requirements once the application form is received. The department may request additional information from the applicant during the application review process to verify property use and ownership.

(6) Upon receipt of the application and supporting documents, the department will perform a field evaluation. The department will approve or deny the application, and notify the applicant, the local department office, and the county treasurer of its decision in writing.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-219, 15-6-235, 15-24-1410, 30-20-201, 30-20-202, 30-20-203, 30-20-204, 30-20-205, 30-20-206, MCA
History: NEW, 2016 MAR p. 1862, Eff. 10/15/16; AMD, 2017 MAR p. 2090, Eff. 11/10/17.

Mont. Admin. R. 42.20.120 Golf Course Valuation

(1) The department will determine the market value of golf courses using one of the following three valuation methods: income approach to value, sales comparison approach to value, and cost approach to value. The method used will be dependent upon whether sufficient data is available.

(2) When using the income approach, the department will determine market value using a gross income multiplier (GIM). For the purposes of this rule, GIM means the ratio between the sales price of similar properties with respect to location, golf course classification, condition, length of time the golf course is open, and the gross income of the subject property.

(3) When using a GIM, market value is derived by multiplying the gross income (GI) by the GIM. For the purposes of this rule, GI means the anticipated income from all operations of the real property before subtracting vacancy and operating expenses. Golf course gross income is from all sources including, but not limited to, green fees, cart path fees, cart rentals, lease income, pro shop income, and food and beverage income.

(4) Use of a GIM is preferred if:

(a) the highest and best use of the property will not change over the remaining economic life of the property;

(b) the subject property and comparable sales are similar; and

(5) A taxpayer owning or operating a golf course must submit yearly gross income from all aspects of the golf course operation, including, but not limited to: greens fees, cart rentals, and food and beverages.

(6) If a taxpayer fails to provide yearly gross income information, the department will estimate the total gross income based on the potential number of rounds that can be played in a typical season, multiplied by the average cost per round, and adding an estimate of income generated by all other golf course operations.

(7) The department will not reduce the estimated value of the property if the taxpayer fails to submit the information required by (5).

(8) When using the sales comparison approach, the department will determine market value by comparing arm's-length sales of similar golf courses from realty transfer certificates, realtors, fee appraisers, multiple listing services and/or nationally recognized publications. The sales comparison approach is preferred if enough recent sales of similar properties exist to determine an accurate market value.

(9) If the department uses the sales comparison approach in (8), the department will look for golf course sales from the subject's market area. If sufficient, relevant information does not exist within the market area the department will seek golf course sales statewide. If sufficient, relevant information does not exist statewide, the department will seek golf course sales in surrounding states and/or regional areas.

(10) When using the cost approach, the department will determine the market value of the golf course improvements such as bunkers, tees, fairways, roughs, drainage and irrigation systems, and course design using the cost tables identified in the Marshall & Swift Valuation Service Manual for the year of reappraisal as well as industry-established guides such as National Golf Course Owners Association, Club Managers Association of America, or American Society of Golf Course Architects to establish the total replacement cost new less depreciation. The Marshall & Swift Valuation Service Manual is published by Marshall & Swift Valuation Service, 777 South Figueroa St., 12th Floor, Los Angeles, California 90017.

(11) If the department uses the cost approach, land will be valued using the sales comparison approach to value. The department will analyze sales of similarly situated parcels, in the subject golf courses market area, that occur within a specific time frame.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, MCA
History: NEW, 2016 MAR p. 2188, Eff. 11/26/16.

Mont. Admin. R. 42.20.121 Timberlands West of the Continental Divide

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.122 Valuation Schedule for Flathead County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.123 Valuation Schedule for Granite County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.124 Valuation Schedule for Eastern Lake County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.125 Valuation Schedule for Western Lake County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.126 Valuation Schedule for Western Lewis and Clark County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.127 Valuation Schedule for Lincoln County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.128 Valuation Schedule for Mineral County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.129 Valuation Schedule for Missoula County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.130 Valuation Schedule for Powell County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.131 Valuation Schedule for Ravalli County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.132 Valuation Schedule for Sanders County

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 986, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 500, Eff. 5/13/83.

Mont. Admin. R. 42.20.133 Qualification for Classification as Agricultural or Forest Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-8-111, 15-7-103, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; REP, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.135 Procedure for Removing One Acre Beneath Improvements on Nonqualified Agricultural Land and Improvements on Forest Land from Property Land Classification

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-6-134, 15-6-143, 15-7-103, 15-7-201, 15-7-202, 15-8-111, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1996 MAR p. 1172, Eff. 4/26/96; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.136 Residence Defined

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; REP, 2002 MAR p. 3723, Eff. 12/27/02.

Mont. Admin. R. 42.20.137 Eligibility for Class 14 Tax Treatment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-144, 15-7-202, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; REP, 1993 MAR p. 3048, Eff. 12/24/93.

Mont. Admin. R. 42.20.138 Agricultural Improvements and Improvements on Timberland Located on Disparate Land Ownerships

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-144, 15-7-202, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; REP, 1993 MAR p. 3048, Eff. 12/24/93.

Mont. Admin. R. 42.20.140 Definition of Terms for Parcels Less Than 20 Acres

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; AMD, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1997 MAR p. 1827, Eff. 10/7/97; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.151 Definition of Terms for Parcels Between 20 to 160 Acres

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-201, 15-7-202, MCA
History: NEW, 1993 MAR p. 3048, Eff. 12/24/93; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.154 Valuation of One Acre Beneath Agricultural Improvements and Improvements on Agricultural Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-7-103, 15-7-206, MCA
History: NEW, 1996 MAR p. 1172, Eff. 4/26/96; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.155 Procedure for Removing One Acre Beneath Agricultural Improvements from Property Land Classification

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-7-206, MCA
History: NEW, 1997 MAR p. 506, Eff. 3/11/97; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.156 Land Classification Change Criteria

(1) The department will change the classification of land from class three, as defined in 15-6-133, MCA, or class ten, as defined in 15-6-143, MCA, to class four, as defined in 15-6-134, MCA, when the following land use change criteria are met:

(a) restrictive covenants, easements, deed restrictions, servitudes, conservation easements, or other legal encumbrances that exist and are enforced to prohibit forest or agricultural use of the land;

(b) the land no longer meets the definition of forest land in 15-44-102, MCA, the forest land classification requirements in ARM 42.20.705, and subsequently does not meet the agricultural land classification requirements of 15-7-202, MCA;

(i) a city or community sewer system;

(ii) a city or community water system;

(iii) street curbs and gutters;

(iv) a paved or all-weather gravel road that meets county standards;

(v) a storm sewer system;

(vi) underground or aboveground utilities that may include gas, electricity, telephone, or cable television;

(vii) streetlights;

(viii) a fire hydrant; or

(ix) landscaping developed for the aesthetic benefit or security of all the landowners;

(d) the land contains a commercial or industrial structure or is used in direct support of commercial or industrial activities.

(i) Examples of a commercial or industrial structure include, but are not limited to:

(A) an apartment building;

(B) an office building;

(D) a warehouse;

(E) a lumber mill;

(F) a sugar beet processing plant;

(G) a refinery;

(H) a power generation facility;

(I) a greenhouse where the product is sold to the public;

(J) a storage tank; and

(K) a cellular communication tower.

(ii) Examples of land being used for commercial or industrial activity include, but are not limited to:

(A) a parking lot;

(B) a lumber company log yard;

(D) land used to store sugar beets, potatoes, or other cash crops until those crops can be transported to a manufacturing facility; and

(E) land that is used to store horticultural crops for sale where the roots of the crop are placed in a container or other material and that container is either placed in the ground or on a platform.

(2) When the criteria in (1) are met, the department will value land at 100% of market value under class four, as provided in 15-8-111, MCA.

(3) Examples of land use criteria change not considered for a change in land classification include utility lines that cross a property or easement access roads provided for the benefit of a third party and not for access or the benefit of the property owner.

History

Authorizing statute(s): 15-1-201, 15-7-111, 15-44-105, MCA
Implementing statute(s): 15-1-101, 15-6-133, 15-7-103, 15-7-111, 15-7-202, 15-7-206, 15-7-207, 15-7-210, 15-44-102, 15-44-103, MCA
History: NEW, 2002 MAR p. 3062, Eff. 11/1/02; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.157 Filed and Platted Subdivisions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; AMD, 1997 MAR p. 1827, Eff. 10/7/97; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.158 Timberlands

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201 through 15-7-216, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; REP, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.161 Forest Land Classification Definitions

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, 15-44-103, MCA
History: NEW, 1992 MAR p. 2650, Eff. 12/11/92; AMD, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.163 Forest Land Ownership

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, MCA
History: NEW, 1992 MAR p. 2650, Eff. 12/11/92; REP, 2003 MAR p. 1888, Eff. 8/29/03.

Mont. Admin. R. 42.20.171 Land Classification Determination Date for Class Three, Four, and Ten Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-103, 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 2004 MAR p. 1211, Eff. 5/21/04; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2198, Eff. 11/25/17; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.172 Extension of Statutory Deadline for Assessment Reviews

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-102, MCA
History: NEW, 2010 MAR p. 1212, Eff. 5/14/10; REP, 2011 MAR p. 2673, Eff. 12/9/11.

Mont. Admin. R. 42.20.173 Class Three, Four, or Ten Property Taxpayer Requests for Informal Classification and Appraisal Reviews and Related Deadlines

(1) All taxable property within class three, four, or ten must be revalued every two years, as required by 15-7-111, MCA.

(2) A class three, four, or ten property taxpayer (taxpayer) dissatisfied with the department's appraised value of their property may submit a Request for Informal Classification and Appraisal Review, Form AB-26 (Form AB-26), which is available at revenue.mt.gov or through a department field office. The Form AB-26 must be submitted to a department field office within 30 days from the date on the classification and appraisal notice for any valuation adjustments to be considered for both years of the valuation cycle.

(3) If a taxpayer misses the 30-day deadline in (2), they may object to the department's appraised value of their property for the second year of the valuation cycle only by submitting a completed Form AB-26 by June 1 of the second year.

(a) A Form AB-26 submitted to the department after June 1 of the second year of the valuation cycle is untimely and the taxpayer's next opportunity to submit a Form AB-26 will be the following year after they receive the classification and appraisal notice for the next two-year valuation cycle.

(b) Any valuation adjustments under the circumstances under (3) apply only to the second year of the valuation cycle.

(4) As provided in 15-7-102, MCA, a taxpayer may also request an informal review by checking a box found on their classification and appraisal notice and returning the request to the department. For this purpose, the department has incorporated the check box request into a detachable ticket on the classification and appraisal notice. Upon receipt of the taxpayer's returned ticket, the department will mail a Form AB-26 to the taxpayer with a cover letter stating the Form AB-26 must be postmarked or hand-delivered to the department within 15 business days of the date on the letter or within 30 days of the date shown on the taxpayer's classification and appraisal notice, whichever is later.

(5) There are no retroactive adjustments to the appraised value for prior years.

(6) A taxpayer may submit a Form AB-26 as described in (2) and (3), but only once during the valuation cycle, unless a new classification and appraisal notice is generated due to a change in property ownership, classification, or valuation, or the addition or subtraction of personal property affixed to the land, as provided in 15-7-102, MCA. The taxpayer then has 30 days from the date on the new classification and appraisal notice to submit a Form AB-26.

(7) If a change in ownership of the property occurs after a taxpayer has submitted an original Form AB-26 and before the department has issued a final determination, the new owner may elect to continue the prior taxpayer’s informal classification and appraisal review process as the new taxpayer, provided the requirements under 15-7-102, MCA, have been met. This election by the new taxpayer must be made by submitting a Form CAB-26 to the department prior to the department issuing a final determination on the original Form AB-26, and within 30 days of the close of the transaction in which they acquired the property. If the new taxpayer fails to submit the Form CAB-26 within the prescribed period, the provisions of (3) apply.

(8) During the informal review process, the department may attempt to contact a taxpayer by telephone, email, and/or a property site visit to schedule an appointment or request additional documentation. If attempts to contact the taxpayer are unsuccessful, the department will send a written request to the taxpayer, who must respond within 15 business days from the date on the letter. If the taxpayer does not respond within the prescribed time, the department will deny the informal review and notify the taxpayer in writing.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-102, 15-7-111, MCA
History: NEW, 2011 MAR p. 2673, Eff. 12/9/11; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2016 MAR p. 2065, Eff. 1/1/17; AMD, 2017 MAR p. 2088, Eff. 11/10/17; AMD, 2020 MAR p. 96, Eff. 1/18/20; AMD, 2024 MAR p. 2399, Eff. 10/5/24; AMD, 2026 MAR, Notice No. 2026-175, Eff. 9/26/26.

Mont. Admin. R. 42.20.174 Mobile Home Exemption Ownership Determination

(1) As provided in 15-6-241, MCA, certain mobile homes, manufactured homes, or housetrailers are exempt from taxation.

(2) An owner of three or more mobile homes, manufactured homes, or housetrailers that meet the criteria for the exemption may only receive the exemption on two units with the lowest appraised values, as determined by the department. All non-exempt units remain taxable according to 15-6-134, MCA.

(3) For purposes of determining ownership in (2), the department shall aggregate properties with similar names and addresses as one owner when the properties reasonably appear to be owned by the same individual(s) or entities. Examples of when similar names and addresses would be aggregated as one owner include properties held under:

(a) an individual's current legal name;

(i) a former legal name, maiden name, and married name;

(ii) an abbreviated or derivative of a legal name (e.g., Bob for Robert);

(iii) nicknames; and

(iv) an individual's assumed business name, if applicable; and

(b) a business entity's name and assumed business name.

(4) Unique or unusual circumstances of similar ownership will be evaluated by the department on a case-by-case basis.

(5) This rule is effective for tax years beginning after December 31, 2019.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-6-241, MCA
History: NEW, 2020 MAR p. 189, Eff. 2/1/20.

Subchapter 42.20.2 Realty Transfers

Mont. Admin. R. 42.20.201 Intent

(1) The Realty Transfer Act serves two purposes. First, it is intended to identify all transfers of real property in order that the property tax record in each county may be updated in a timely and accurate manner, reflecting the names and addresses of the people to whom property taxes are to be assessed. Second, the Realty Transfer Act provides market information on the current selling price of real estate and improvements.

(2) It is not the intent of the Act to apply sales information obtained to each sold parcel. Instead, sales of similar properties are grouped so that the market indicator of value will reflect current trends, and sales that are uncharacteristically high or low will have an offsetting effect.

History

Authorizing statute(s): 15-7-306, MCA
Implementing statute(s): 15-7-304, 15-7-305, 15-7-307, 15-7-308, MCA
History: NEW, Eff. 10/4/76; AMD, 1996 MAR p. 1172, Eff. 4/26/96; AMD, 2002 MAR p. 3723, Eff. 12/27/02.

Mont. Admin. R. 42.20.202 Realty Transfer Certificate

(1) The certificate must be completed for all transfers of real property. Before an instrument may be recorded or the assessment changed to reflect the transfer of a new owner, a completed certificate must be presented to the county Clerk and Recorder.

History

Authorizing statute(s): 15-7-306, MCA
Implementing statute(s): 15-7-304, 15-7-305, 15-7-307, MCA
History: NEW, Eff. 10/4/76; AMD, 1996 MAR p. 1172, Eff. 4/26/96.

Mont. Admin. R. 42.20.203 Exemptions from Disclosing Sale Price

(1) Certain types of property are exempt from the Realty Transfer Act provisions, which require the disclosure of sales information. Land that is currently classified by the department as agricultural land that will continue in an agricultural use is exempt from the sales disclosure provisions of the Act because the department is required by law to assess agricultural land on the basis of its productive ability rather than its market value. The exemption does not apply to parcels that fail to meet the requirements of 15-7-202 , MCA. The other exempt transfers are sales that are not arm's-length transactions or involve sales to a government entity. Since these transactions are not reliable indicators of market value, the sales information is not useable for assessment purposes.

History

Authorizing statute(s): 15-7-306, MCA
Implementing statute(s): 15-7-307, MCA
History: NEW, Eff. 10/4/76; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2005 MAR p. 1594, Eff. 8/26/05.

Mont. Admin. R. 42.20.204 Change of Assessment Roll

(1) The department shall not change to whom real property is assessed unless properly notified by means of an accurately prepared Realty Transfer Certificate (RTC) , except in the case of Tribal patents or letters of conveyance from the Bureau of Land Management. Property assessments will continue to be made in the name of the previous owner until an RTC has been completed and filed in the manner prescribed by law (except for Tribal patents and letters of conveyance from the Bureau of Land Management) .

(2) In an instance when the department is notified of a Tribal patent, or a letter of conveyance issued by the Bureau of Land Management, that is not recorded with the Clerk and Recorder's Office, the department will change to whom the real property is assessed.

(3) In order to effect changes in the property tax record, all transfers, including exempt transfers, must be filed with a certificate, giving the names of the parties to the transfer, a description of the property and, if applicable, the reason for exemption from the provisions relating to sales information.

History

Authorizing statute(s): 15-7-306, MCA
Implementing statute(s): 15-7-304, 15-7-305, 15-7-307, MCA
History: NEW, Eff. 10/4/76; AMD, 1996 MAR p. 1172, Eff. 4/26/96; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2006 MAR p. 3103, Eff. 12/22/06.

Mont. Admin. R. 42.20.205 Accuracy of Realty Transfer Certificate

(1) The name of the grantor (seller) reflected on the RTC must be identical to the name of grantor (seller) reflected on the accompanying deed.

(2) The name of the grantee (buyer) reflected on the RTC must be identical to the name of the grantee (buyer) reflected on the deed.

(3) Breaks in the chain of title must be corrected. Until the break in the chain of title is corrected through the filing of reliable information, the property will be carried on the property tax record in the name of the previous owner, in care of the new owner (grantee) . RTCs that bridge the break in the chain of title must be filed. After the RTC(s) is filed, which bridges the break in title, the new owner's name (grantee) will be placed on the property tax roll in place of the previous owner's name. Name identification and name abbreviation inaccuracies in (1) and (2) may be corrected through the submission of an affidavit available at the department. If, in the judgment of the local department office, there is sufficient evidence to suggest the RTC is inaccurately completed or that a transaction is not exempt from reporting sales information, the department will return the RTC to the filer. The inaccurate information will be identified and the filer will be required to correct the inaccuracy and to resubmit the RTC.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-304, 15-7-306, MCA
History: NEW, 1985 MAR p. 2019, Eff. 12/27/85; AMD, 1996 MAR p. 1172, Eff. 4/26/96; AMD, 2002 MAR p. 3723, Eff. 12/27/02.

Subchapter 42.20.3 Classification of Nonproductive Patented Mining Claims

Mont. Admin. R. 42.20.301 Application for Classification as Nonproductive Patented Mining Claim

(1) A property owner whose property meets the requirements of a nonproductive patented mining claim, as provided in 15-6-133, MCA, may apply to obtain that land classification on the department's form which is available at http://www.revenue.mt.gov.

(2) Applications must be submitted within 30 days from the date on the classification and appraisal notice for the exemption to be considered for both years of the two-year valuation cycle.

(a) Applications submitted more than 30 days from the date on the classification and appraisal notice will apply to the second year of the two-year valuation cycle only.

(b) An applicant who does not apply during the first year of the valuation cycle must apply by March 1 of the second year of the valuation cycle.

(3) The department will review the application and may conduct a field review. The department shall notify the applicant in writing whether the application has been approved or denied.

(4) The department may change a nonproductive patented mining claim land classification if:

(a) the property changes ownership;

(b) the property is subdivided; or

(c) the department determines the property no longer meets the nonproductive patented mining claim land requirements provided in ARM 42.20.303.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-133, 15-7-102, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.201, 1987 MAR p. 1214, Eff. 7/31/87; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2026 MAR, Notice No. 2026-448, Eff. 3/21/26.

Mont. Admin. R. 42.20.302 Definitions

The following definitions apply to this subchapter:

(1) "Has a separate and independent value for such other purposes" means the land has a demonstrated capacity for recreation, commercial, industrial, or agricultural/timber use. That capacity is demonstrated by one of the following criteria:

(a) the filing of a certificate of survey that creates a division of the mining claim;

(b) the growth of agricultural commodities on the mining claim;

(c) the construction of a recreational or residential structure such as a summer home or commercial structure on the mining claim; or

(d) the lease of any portion of the surface area for a recreational, commercial, residential, industrial, or agricultural use.

(e) The requirements of (c) may be waived when the topography of the property is so severe that it precludes development for any purpose other than mining.

(2) "Incorporated city or town" means any municipality or county area in which the government body has complied with all incorporation provisions outlined in Title 7, MCA.

(3) "Mineral interests of the mining claim have not been depleted" means that the minerals located within the boundaries of the parcel are a vein, lode, or ledge of rock-in-place bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits, or a placer deposit of gold or other deposit of minerals having a commercial value.

(4) "Nonproductive land" means nonfertile land that is incapable of supporting animals or producing plant matter in commercially salable quantities.

(5) "Owner" means that the applicant and owner of record are the same individual, corporation, or partnership.

(6) "Patented" means land purchased from the federal government for the sole purpose of developing a mining operation.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-133, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.202, 1987 MAR p. 1214, Eff. 7/31/87; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2014 MAR p. 2994, Eff. 12/12/14.

Mont. Admin. R. 42.20.303 Criteria for Valuation as Mining Claim

(1) An applicant for mining claim classification must prove the parcel, which is the subject of the application, meets the following criteria:

(a) is nonproductive;

(b) is patented;

(d) is outside the limits of an incorporated city or town, or in the case of a county-municipal consolidation, outside the limits of the municipalities prior to the date of consolidation;

(e) has no separate and independent value other than as a mining claim; and

(f) is being held by the owner for the sole purpose of developing the mineral interests on the property.

(2) The applicant for class three property tax treatment is required to demonstrate ownership of the patented mining claim for which classification is sought. If, on the date of application, the applicant is presently carried on the tax rolls of the county as the owner of the mining claim, the department will presume that the applicant is the owner of record of the mining claim.

(3) If, on the date of application, the applicant is not carried as the owner of record of the mining claim on the tax rolls of the county, the applicant will be required to fulfill criteria set forth in (4) .

(4) Proof of the criteria set forth in (1) must consist of the following:

(a) submission of a copy of the United States patent issued in the name of the owner of record or a written certificate from the Bureau of Land Management certifying the ownership of the patented mining claim;

(b) submission of a copy of the RTC, if provided for by law as of the date of patent issuance, completed by the owner of record or the owner's representative or agent; and

(c) submission of copies of the most recent deeds or security agreements evidencing ownership and a copy of the last assessment on the patented mining claim.

(5) In the event that class three property tax treatment is sought for a patented mining claim which is owned by multiple parties, the criteria set forth in (2) and (3) must be fulfilled by a majority of the parties or entities currently paying the taxes on the claim or by the single party or entity paying taxes on the claim.

(6) If the department denies the application for class three property tax treatment, and if the applicant/taxpayer disagrees with the department's determination, the taxpayer shall be entitled to exercise the rights set forth in 15-7-102 , MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-133, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.203, 1987 MAR p. 1214, Eff 7/31/87; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06.

Mont. Admin. R. 42.20.304 Additional Restrictions That Curtail Preferential Treatment

(1) Land shall not be classified or valued as a class three mining claim if the land is restricted, by covenant or ordinance, from mining use.

(2) Land shall not be classified or valued as a class three mining claim after mining activity begins. Once mining activity begins, ARM 42.20.645 will apply.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-133, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.204, 1987 MAR p. 1214, Eff. 7/31/87; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 2006 MAR p. 3103, Eff. 12/22/06.

Mont. Admin. R. 42.20.305 Valuation of Acreage Beneath Improvements on Eligible Mining Claims

(1) For all mining claims that have improvements that are specifically for the support of the mining claim on them, the land that is beneath all the improvements and the land that is necessary for the use of those improvements shall not receive classification and valuation as class three property. A market value determination shall be made for the acreage that is beneath the improvements and for the acreage necessary for the use of those improvements.

(2) The acreage defined in (1) shall be appraised according to market value consistent with that of comparable land.

(a) In no case will the market value of mining claim acreage be lower than the lowest market value assigned to improved tracts within the county.

(b) No specific site improvement values for water systems and septic systems will be added to the land values determined according to (2) (a) .

(3) All mining claim acreages determined according to (1) and (2) shall be classified and valued as class four property.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-133, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.205, 1987 MAR p. 1214, Eff. 7/31/87; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2006 MAR p. 3103, Eff. 12/22/06.

Mont. Admin. R. 42.20.306 Valuation of Improvements Located on Eligible Mining Claims

(1) All improvements located on eligible mining claims shall be classified and valued in the appropriate tax class. The improvements will normally be classified and valued as class four property.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-133, 15-6-148, 15-6-153, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.206, 1987 MAR p. 1214, Eff. 7/31/87; AMD, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.307 Valuation of Eligible Mining Claim Land

(1) All land contained in an eligible mining claim except that land described in ARM 42.20.305 shall be valued as class three grazing land. The appropriate grazing land productivity and valuation determination will be based on the statewide average productivity value of grazing land.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-8-111, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.207, 1987 MAR p. 1214, Eff. 7/31/87; AMD, 2007 MAR p. 56, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10.

Mont. Admin. R. 42.20.308 Application for Classification as Class 19 Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-6-101, MCA
Implementing statute(s): 15-6-149, 15-6-154, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.208, 1987 MAR p. 1214, Eff. 7/31/87; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.309 Eligibility Criteria for Classification and Valuation as Class 19

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-6-101, MCA
Implementing statute(s): 15-6-149, 15-6-154, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.209, 1987 MAR p. 1214, Eff. 7/31/87; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.310 Portions of Parcels Eligible for Classification as Class 19

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-6-101, MCA
Implementing statute(s): 15-6-149, 15-6-154, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.210, 1987 MAR p. 1214, Eff. 7/31/87; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.311 Portions of Parcels Eligible for Classification as Class 4

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-6-101, MCA
Implementing statute(s): 15-6-149, 15-6-154, MCA
History: NEW, 1987 MAR p. 106, Eff. 1/30/87; TRANS, from ARM 42.21.211, 1987 MAR p. 1214, Eff. 7/31/87; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Subchapter 42.20.4 Sales Assessment Ratio - Real Property Values

Mont. Admin. R. 42.20.401 Limitation on Changing Property Value

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411 and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.404 Criteria for Reducing Property Value

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411 and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.407 Procedure for Validating Sales Information

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411 and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.410 Stratified Sales Assessment Ratio Study Procedures

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411, and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.413 Division of Property Into Stratum

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411, and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.416 Applicability of Property Value Adjustments

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411, and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.419 Percentage Adjustments for the 1988 Tax Year

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411, and 15-10-412, MCA
History: NEW, 1988 MAR p. 577, Eff. 3/25/88; REP, 1990 MAR p. 596, Eff. 3/30/90.

Mont. Admin. R. 42.20.420 Property Value Adjustments

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, 15-10-411 and 15-10-412, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1990 MAR p. 1270, Eff. 6/29/90; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.423 Data Used to Estimate Sales Assessment Ratios

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1991 MAR p. 742, Eff. 5/17/91; AMD, 1992 MAR p. 925, Eff. 5/1/92; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.426 Adjustment for Date of Sale and Sales Assessment Ratio Estimate

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; REP, 1991 MAR p. 742, Eff. 5/17/91.

Mont. Admin. R. 42.20.429 Criteria for Reducing or Increasing Property Value

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1990 MAR p. 1270, Eff. 6/29/90; AMD, 1991 MAR p. 742, Eff. 5/17/91; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.432 Procedure for Validating Sales Information

(1) The department shall compile sales information from RTCs. The department shall review sales evidenced by an RTC to determine whether a sale was a valid, arm's-length transaction. For the purposes of this rule, "valid, arm's-length transaction" means a sale of real estate not affected by unreasonable or unusual personal influence or control, as defined in literature prepared by the international association of assessing officers.

(2) Unless there is convincing evidence to the contrary, the following sales transactions shall be considered non-arm's-length transactions:

(a) a sale of agricultural or timber land;

(b) a sale in which the purchaser or seller is the United States of America, a state, a county, a municipality, or an instrumentality, agency, or political subdivision thereof, or a public utility;

(d) a sale pursuant to a court decree;

(e) a sale pursuant to a merger, consolidation, or reorganization of a corporation, partnership, or other business entity;

(f) a sale between affiliated corporations or between shareholders and the corporation;

(g) a sale of a decedent's estate;

(h) a sale constituting a gift;

(i) a sale between a husband and wife or a parent and child or other family member with only nominal actual consideration;

(j) a sale transferring property to the same party or parties;

(k) a sale of delinquent taxes, sheriff's sale, bankruptcy sale, mortgage foreclosure, or premature liquidation of property;

(l) a sale made in contemplation of death;

(m) a sale of tax-exempt property; and

(n) royalty interest or an assignment of interest.

(3) The department shall consider the following sales in distressed markets if the following foreclosure related transactions comprise more than 20 percent of sales in a specific market area for model calibration and ratio studies, in accordance with the International Association of Assessing Officers (IAAO) standards:

(a) Real Estate Owned (REO) sales involving financial institutions as seller if:

(i) represented and marketed as an REO listing with a real estate listing service;

(ii) exposed for sale in the open market for a reasonable amount of time; and

(iii) verified as an REO sale.

(iv) the sales comprise more than 20 percent of sales in a specific market area; and

(v) changes in property characteristics are accounted for in model calibration and ratio studies.

(b) auction sales if:

(i) the auction was well advertised;

(ii) the auction was well attended;

(iii) the seller had a minimum bid or the right of refusal on all bids; and

(iv) the sales are not from absolute auctions that do not have a low bid clause or right of refusal and are advertised as such type of auctions.

(i) represented and marketed as a short sale with a real estate listing service;

(ii) exposed for sale in the open market for a reasonable amount of time; and

(iii) verified as a short sale.

(4) The following sales will not be considered in distressed markets:

(a) vandalized property; and

(b) forced sales resulting from a judicial order, i.e., when the seller is either a sheriff, receiver, or other court officer.

(5) The department may verify sales information by submitting to the parties participating in a sale transaction the sale verification form. Completion of the sales verification form may be accomplished during on-site discussions with the buyer or seller, or through telephone conversation or written correspondence with the buyer or seller, or their representatives. Additionally, the department may secure information from the lending institution involved in the sale for purposes of verifying the terms and conditions of the sale

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2011 MAR p. 2673, Eff. 12/9/11.

Mont. Admin. R. 42.20.435 Determination of Areas

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.438 Designated Areas - Residential

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1990 MAR p. 1271, Eff. 6/29/90; AMD, 1991 MAR p. 742, Eff. 5/17/91; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.441 Residential Area Maps and Descriptions

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

Rules 42.20.442 and 42.20.443

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.444 Designated Areas - Commercial

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

Rules 42.20.445 and 42.20.446

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1992 MAR p. 925, Eff. 5/1/92; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.447 Commercial Area Maps and Descriptions

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

Rules 42.20.448 and 42.20.449

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.450 Division of Property Into Stratum

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

Rules 42.20.451 and 42.20.452

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1991 MAR p. 742, Eff. 5/17/91; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.453 Treatment of Certain Properties

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1990 MAR p. 1270, Eff. 6/29/90; AMD, 1991 MAR p. 742, Eff. 5/17/91; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.454 Consideration of Sale Price as an Indication of Market Value

(1) When considering any objection to the department's appraised value of property, the department may consider the property's sale price, as provided in the Realty Transfer Certificate (RTC), as evidence of its market value.

(2) For the property's sale price to be considered, a taxpayer or the taxpayer's agent must:

(a) submit a completed Request for Informal Classification and Appraisal Review, Form AB-26, as provided in ARM 42.20.173, to the local department field office servicing the county where the property is located; and

(b) complete and sign the department's property sale verification form if one has not been previously submitted.

(3) The department must verify that the property sale was a valid arm's-length transaction, as defined in ARM 42.20.432, and was considered for use in the department's valuation models and analysis for the current valuation cycle. Descriptions of the department's processes for sale verification and valuation modeling and analysis to determine market value are found in the Montana Residential, Commercial, and Industrial Property Classification and Valuation Manual, adopted and incorporated by reference in ARM 42.18.121.

(4) The department is authorized to exclude a property's sale price in valuation modeling if it is determined the sale price was not an arms-length transaction or indicative of market value. Examples of sales transactions that are considered non-arm's-length transactions are provided in ARM 42.20.432.

(5) If the department cannot verify that the sale was a valid arm's-length transaction, a taxpayer may submit the following additional documents and information for the department's consideration:

(a) an executed buy/sell agreement for the property; and

(b) two comparable property sales located in the same general geographic area where the taxpayer's property is located. The department will consider comparable property sales with a sale date after the department's valuation date for the current valuation cycle which is adopted and incorporated by reference in ARM 42.18.121.

(6) Similar to the determination in (3), the department will verify that the comparable property sales in (5)(b) were also valid arm's-length transactions.

(7) The department will consider a property's sale price as indicative of market value when the requirements in (2), (3), and (5) are met. The department is authorized to adjust the sale price to account for changes in market conditions that may have occurred between the time of sale and the department's valuation date for the current valuation cycle.

(8) The department shall respond in writing to the taxpayer clearly stating the reasons for accepting or rejecting the use of their property’s sale price and, if appropriate the justification for any adjustments made to the property's sale price.

(9) If the property’s appraised value is adjusted by the department or the tax appeal board and the department files no further appeal within the time period allowed by law, the adjusted value becomes the value for assessment and taxation purposes until such time as changing circumstances with respect to the property requires a new valuation and assessment, or upon an updated valuation occurring in subsequent property valuation cycles.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-102, 15-7-111, 15-7-305, 15-8-111, MCA
History: NEW, 1991 MAR p. 742, Eff. 5/17/91; AMD, 1992 MAR p. 1763, Eff. 8/14/92; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 1999 MAR p. 309, Eff. 2/12/99; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2088, Eff. 11/10/17; AMD, Notice No. 2025-42, Eff. 5/10/25.

Mont. Admin. R. 42.20.455 Consideration of Independent Appraisals as an Indication of Market Value

(1) When considering any objection to the appraisal of property, the department may consider independent fee appraisals of the property as evidence of the market value of the property. For an independent fee appraisal to be considered, the taxpayer or the taxpayer's agent must submit the following documents to the local department office in the county where the property is located:

(a) a Request for Informal Classification and Appraisal Review, Form AB-26, as set forth in ARM 42.20.173; and

(b) a copy of the independent fee appraisal that meets the following requirements and was conducted:

(i) by an appraiser licensed or certified by the Montana Board of Real Estate Appraisers, under Title 37, chapter 54, MCA;

(ii) in accordance with current uniform standards of professional appraisal practice (USPAP), as set forth for licensed or certified real estate appraisers under 37-54-403, MCA; or completed for federally related transactions or commercial lending institutions; and

(iii) within six months of the valuation date provided for in 15-7-102, MCA, and ARM 42.18.121. This six-month requirement may necessitate that a fee appraiser conduct a retroactive appraisal, in accordance with USPAP. In this situation, the effective date of the appraisal may be prior to the date of the Appraisal Report. If an appraisal has already been conducted, and it was conducted prior to the valuation date, then:

(A) a recertification or update of value may be required as an addendum to the original appraisal; and

(B) the recertification or update of value must be completed by the same appraiser who conducted the original appraisal.

(2) After making a determination regarding use of the independent fee appraisal value as market value for tax purposes, the department shall respond in writing to the taxpayer stating clearly the reasons for accepting or rejecting the use of the fee appraisal and, if appropriate, what adjustments were made to the department's appraised value and why.

(3) If the appraised value is adjusted by the department or by the tax appeal board, and the department files no further appeal within the time period allowed by law, the adjusted value becomes the value for assessment and taxation purposes, until such time as changing circumstances with respect to the property requires a new valuation and assessment, or upon an updated valuation occurring in subsequent property valuation cycles.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-102, 15-7-111, 37-54-403, MCA
History: NEW, 1991 MAR p. 742, Eff. 5/17/91; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 1999 MAR p. 309, Eff. 2/12/99; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2088, Eff. 11/10/17; AMD, 2018 MAR p. 2410, Eff. 1/1/19.

Mont. Admin. R. 42.20.468 Percentage Adjustments for the 1992 Tax Year

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

Rules 42.20.469 and 42.20.470

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1991 MAR p. 742, Eff. 5/17/91; AMD, 1992 MAR p. 925, Eff. 5/1/92; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Mont. Admin. R. 42.20.471 Applicability of Property Value Adjustments

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-7-111, MCA
History: NEW, 1990 MAR p. 596, Eff. 3/30/90; REP, 1993 MAR p. 3060, Eff. 12/24/93.

Subchapter 42.20.5 Phase-In Valuation and New Construction

Mont. Admin. R. 42.20.501 Definitions

The following definitions apply to this subchapter:

(1) "2014 tax year value" means the market value of a property which appears on the 2014 property tax record of that property.

(2) "Annual appraisal trend factor class five" means a factor used to annually reappraise class five qualifying air and water pollution control property, new industrial property, gasohol facilities, qualifying research and development firms, and electrolytic reduction facilities real property by trending their cost values up or down based on accepted cost indices.

(3) "CDU rating" means a composite rating of the overall condition, desirability, and usefulness of a structure, used nationally as a simple, direct, and uniform method of estimating accrued depreciation.

(4) "Current year phase-in value" is the difference between the reappraisal value and the value before reappraisal (VBR) times the phase-in percentage, added to the VBR. The current year phase-in value is the amount subject to tax each year, and is determined by the following formula:

Current year phase-in value =

[(Reappraisal (REAP) value - VBR) x phase-in %] + VBR

(5) "Destruction" means the removal or deletion of improvements, buildings, living areas, garages, and out-buildings caused by burning, razing, or natural disaster.

(6) "Dwelling unit" is defined as a building or portion of a building that contains living facilities with provision for sleeping, eating, cooking, and sanitation for one or more persons.

(7) "Full reappraisal to taxable value conversion factor for class four commercial property" is the total taxable value of class four commercial property divided by the total reappraisal value of the same class four commercial property.

(8) "Full reappraisal to taxable value conversion factor for class four residential" is the total taxable value of class four residential property divided by the total reappraisal value of the same class four residential property.

(9) "Improvement grade change" means a change in the quality of construction of an improvement. Each improvement grade signifies a different level of construction quality. Examples of improvement grades include, but are not limited to, the following:

(a) 1F-1 = cheap construction;

(b) 1F-5 = average construction; and

(10) "Land productivity change (grade change)" means a change in the productive capacity or yield of agricultural or forest land. In a land productivity change, the land use does not change; rather, the land as currently used simply becomes more or less productive. For example, a productivity change in grazing land may occur when it is discovered that the productivity potential has decreased due to a new saline seep on the land. Because the land continues to be used as grazing land, the department shall continue to classify the land as agricultural grazing land, but the grade of the grazing land may be changed to reflect its lessened productivity.

(11) "Land reclassification" means changing the use of land from one type of agricultural use to a different type of agricultural use. For example, a land reclassification occurs when agricultural land that was previously used as grazing land is converted to irrigated land. In a land reclassification, the land is dedicated to agricultural purposes both before and after the change in land use. It is this characteristic that distinguishes a land reclassification from the more general land use change.

(12) "Land split" means the division of a single property into two or more properties for the ultimate purpose of conveying one or more of the properties to a new owner or owners.

(13) "Land use change" means the conversion of a current use of land to a different, alternate use. Land splits shall be considered land use changes. Examples of land use changes contained in this definition include, but are not limited to, the following:

(a) agricultural land converted to tract land;

(b) forest land converted to tract land;

(d) land that is converted to another use due to a subdivision of real property.

(14) "Living area" means any room or group of rooms designed as the living quarters of one family or household, equipped with cooking and toilet facilities, and having an independent entrance from a public hall or from the outside.

(15) "Neighborhood (NBHD) group percentage" means the percent of change in value from the total 2014 tax year value of the year before reappraisal to the total 2015 reappraisal value, excluding properties with new construction, for those homogeneous areas within each county or between counties that have been defined as a neighborhood group. The neighborhood group percentage is determined by using the following formula:

Neighborhood Group Percentage =

(Total 2008 NBHD REAP Value - Total 2015 NBHD Tax Year Value)

Total 2014 NBHD Tax Year Value

(a) Individual neighborhood group percentages will be determined for residential land, commercial land, residential improvements, and commercial improvements.

(16) "New construction" means the construction, addition, or substitution of improvements, buildings, living areas, garages, and outbuildings; or the extensive remodeling of existing improvements, buildings, living areas, garages, outbuildings, land reclassification, and land use changes.

(17) "New construction trend factor for industrial property" means a factor used to adjust reappraisal values and VBRs (values before reappraisal) in instances where the property has new construction or destruction. The factor will be derived from nationally accepted cost indices.

(18) "Phase-in percentage" for tax years 2015 through 2020 is 16.6 percent per year. The phase-in percentage accumulates annually.

(19) The "previous year tax revenue" means the product of multiplying the previous tax year total taxable value for each taxing jurisdiction by the previous year mill levy for that taxing jurisdiction.

(20) "Reappraisal (REAP) value" means the full 2015 value determined for the current reappraisal cycle pursuant to 15-7-111, MCA, adjusted annually for new construction or destruction. The 2015 reappraisal value reflects a market value of the property on January 1, 2014. A current year REAP value is the same as the 2015 reappraisal value of the property if there is no new construction, destruction, land splits, land use changes, land reclassifications, land productivity changes, improvement grade changes, or other changes made to the property during 2015 or subsequent tax years.

(21) "Subdivision of real property" means the first sale of a land parcel that results in the land being taxable as class four as described in 15-6-134, MCA, or nonagricultural land as described in 15-6-133(1)(c), MCA.

(22) "Taxable market value" means that portion of the total market value subject to taxation after the total market value has been adjusted, if applicable, for the phase-in of value.

(23) "Value before reappraisal (VBR)" means the 2014 tax year value adjusted for any new construction or destruction that occurred in the prior year. The VBR for the 2015 tax year and subsequent years is the same as the 2014 tax year value if there is no new construction, destruction, land splits, land use changes, land reclassifications, improvement grade changes, or other changes made to the property during 2014 or subsequent tax years.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-10-420, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2003 MAR p. 315, Eff. 2/28/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.502 Determination of Value Before Reappraisal (vbr) for Forest Land Excluding Industrial Properties

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; REP, 2016 MAR p. 2065, Eff. 1/1/17.

Mont. Admin. R. 42.20.503 Determination of Current Year Phase-in Value for Class Ten Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2007 MAR p. 119, Eff. 12/22/06; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; REP, 2016 MAR p. 2065, Eff. 1/1/17.

Mont. Admin. R. 42.20.504 New Construction Determination

(1) The following criteria will be used to identify new construction and destruction:

(a) all residential or commercial structures, out-buildings, and mobile homes that were built, remodeled, or destroyed in the preceding year;

(b) properties with new, attached garages built in the preceding year;

(d) properties with out-buildings built in the preceding year; or

(e) properties with a physical change to the improvements.

(2) The following will not be considered new construction or destruction:

(a) properties with square footage changes due to correction of measurements or sketch vectoring, or due to coding corrections for story heights, such as story with full finished attic to 1.5 stories;

(b) properties with improvement grade changes;

(d) properties with changes in heat or air conditioning; or

(e) properties with changes in effective year.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2065, Eff. 11/11/16.

Mont. Admin. R. 42.20.505 Classification and Appraisal Notices and Valuation Reviews for Forest Land Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-102, 15-7-111, MCA, and Sec. 11, Ch. 463, L. 1997
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2016 MAR p. 2065, Eff. 11/11/16; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.506 Certified Mill Levy Determination

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-6-134, 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 1999 MAR p. 2905, Eff. 12/17/99; REP, 2002 MAR p. 3424, Eff. 12/13/02.

Mont. Admin. R. 42.20.507 Property Tax Assistance and Tax Relief Programs

(1) All valuation reductions allowed for under the property tax assistance program or other property tax relief programs will be applied against the current year taxable market value.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 1999 MAR p. 2905, Eff. 12/17/99.

Mont. Admin. R. 42.20.508 Definitions - Industrial Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; REP, 1999 MAR p. 2905, Eff. 12/17/99.

Mont. Admin. R. 42.20.509 Determination of Value Before Reappraisal (vbr) for Industrial Properties (class Four)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2014 MAR p. 2994, Eff. 12/12/14; REP, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.510 Basic Determination of Phase-in Value for Class Four Industrial Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; REP, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.511 Valuation of Class Five Real Property for Qualifying Air and Water Pollution Control Property, Gasohol Facilities, Qualifying Research and Development Firms, and Electrolytic Reduction Facilities

(1) Qualifying air and water pollution control property, gasohol facilities, qualifying research and development firms, and electrolytic reduction facilities real property included in class five will be revalued annually. The department will apply an annual appraisal trending factor to the qualifying property to arrive at the market value. An annual appraisal trend factor will be calculated, using the January cost indices from the Marshall & Swift Valuation Service Guide (Marshall & Swift Guide), for the current tax year. If the Marshall & Swift Guide is not available, other accepted cost manuals or indices may be used.

(2) The annual appraisal trend factor will be applied to the previous year's market value to arrive at the current year's market value.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.20.512 Valuation of Class Five Locally Assessed Electric and Telephone Cooperatives and Telecommunications Companies

(1) The department shall annually appraise locally assessed electric and telephone cooperatives' and locally assessed telecommunications companies' property using the methods described in ARM Title 42, chapter 22. The methods described are used in appraising other property with similar characteristics.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-6-135, 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2002 MAR p. 3424, Eff. 12/13/02.

Mont. Admin. R. 42.20.513 Valuation of Class Seven Property

(1) The department shall annually appraise class seven property using the methods described in ARM Title 42, chapter 22. The methods described are used in appraising other property with similar characteristics.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: TEMP, NEW, 1997 MAR p. 1593, Eff. 9/9/97.

Mont. Admin. R. 42.20.514 Determination of Total Taxable Value of Eliminated Property

(1) The total taxable value of eliminated property is determined by compiling the actual total value of properties that have been eliminated from a particular taxing jurisdiction. In cases where the actual values have not been compiled, the department will use a statewide average rate of 0.12% (.0012) to multiply by the previous year total taxable value in the taxing jurisdiction, to calculate an estimated value of eliminated property.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-10-420, MCA
History: NEW, 1999 MAR p. 2905, Eff. 12/17/99.

Mont. Admin. R. 42.20.515 Determination of Total Taxable Value of Newly Taxable Property

(1) The department will calculate the value attributable to newly taxable property that is classified as class four, five, seven, eight, nine, twelve, thirteen, fourteen, fifteen, and sixteen for each taxing jurisdiction annually.

(2) For the 2014 tax year and subsequent years, the department will calculate the taxable value attributable to newly taxable property in each of the classes of property listed in (1) for each taxing jurisdiction as follows:

(a) The value attributable to newly taxable property will be calculated by subtracting the prior year adjusted taxable value from the current year adjusted taxable value to determine the total value of newly taxable property in a jurisdiction by tax class.

(b) The current and prior year adjusted taxable values will be calculated by adjusting the current and prior year taxable values by an effective rate. The effective rate will be calculated from the current year taxable value and the current year market value, with the exception of class four, which will use the current year taxable value and the current year phase-in value to reduce the impact that a change in phase-in value has on the effective rate.

(c) The current year adjusted taxable value will be calculated by multiplying the current year market value by the effective rate determined in (b).

(d) The prior year adjusted taxable value will be calculated by multiplying the prior year market value by the effective rate determined in (b).

(3) The total taxable value attributable to all of the newly taxable property in a taxing jurisdiction will be calculated by summing the taxable value attributable to newly taxable property in all classes of property listed in (1).

(4) If the newly taxable value, as calculated according to (2) and (3), for any class of property in any taxing jurisdiction is less than zero, then the newly taxable value for that class of property in that taxing jurisdiction is zero.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-10-420, MCA
History: NEW, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2003 MAR p. 315, Eff. 2/28/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2009 MAR p. 1263, Eff. 7/31/09; AMD, 2014 MAR p. 2994, Eff. 12/12/14.

Mont. Admin. R. 42.20.516 Application of Phase-in Provisions for Class Ten Properties That Decrease in Value Due to Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-7-111, MCA
History: NEW, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2002 MAR p. 3424, Eff. 12/13/02; AMD, 2015 MAR p. 2350, Eff. 1/1/16; REP, 2016 MAR p. 2065, Eff. 1/1/17.

Mont. Admin. R. 42.20.517 Application of Homestead or Comstead Exemption to Mixed Use Properties

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-7-111, MCA
History: NEW, 1999 MAR p. 2905, Eff. 12/17/99; AMD, 2006 MAR p. 3103, Eff. 12/22/06; REP, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.518 Land Cap Eligibility and Application

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1999 MAR p. 2905, Eff. 12/17/99; REP, 2002 MAR p. 3424, Eff. 12/13/02.

Mont. Admin. R. 42.20.519 Applications for Property Tax Abatement for Gray Water Systems

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-24-3201, 15-24-3202, 15-24-3203, 15-24-3204, 75-5-305, 75-5-325, 75-5-326, 75-5-327, MCA
History: NEW, 2012 MAR p. 1001, Eff. 5/11/12; REP, 2023 MAR p. 1565, Eff. 11/4/23.

Subchapter 42.20.6 Agricultural Land

Mont. Admin. R. 42.20.601 Definitions

The following definitions apply to this subchapter:

(1) "Agricultural products produced by the land" means crops or forage raised directly in the land's soil and used to support livestock. Agricultural products produced by the land does not mean land that is used as a platform for agricultural use such as the feeding of livestock from external sources that allow stocking rates to exceed the carrying capacity.

(2) "Ancillary improvements," as provided in 15-1-101, MCA, means improvements necessary for the production and storage of raw agricultural commodities. These improvements do not include improvements that are used to process, treat, or package raw agricultural commodities into a value-added product, or improvements designed to accommodate and serve the public.

(3) "Animal unit" means a cow/calf pair, including a mature cow of approximately 1,200 pounds and a calf as old as 6 months, or their equivalent.

(4) "Animal unit month" means one animal unit grazing for one month. One animal unit month represents the amount of forage needed to properly nourish one animal unit for one month without injurious effect to vegetation on the land.

(5) "Biological control insect" means an insect that is used to reduce or eliminate noxious weeds by interference with the weed's ecology.

(6) "Bona fide agricultural operation" means an enterprise in which the land actually produces agricultural products provided under the term, agricultural, defined in 15-1-101, MCA, that directly contribute agricultural income.

(7) "Carrying capacity" means the amount of grazing that a pasture will sustain without injurious effect to vegetative growth due to the quality of the soil and the environment where it occurs.

(8) "Conservation reserve program (CRP)" means a federal farm program administered by the Farm Service Agency (FSA) that pays agricultural landowners to remove land from crop production on highly erodible soils for a specified period of time.

(9) "Contiguous parcels of land" means separately described parcels of land under one ownership that physically touch one another or would have touched one another were the acreages not separated by:

(a) deeded roads and highways;

(b) rivers and streams;

(d) federal or state land that is leased from the federal or state government by the owner whose land is physically touching the federal or state land.

(10) "Denied access or DA land" is a term used by the United States Department of Agriculture Natural Resource Conservation Service (NRCS) to describe lands where they were prohibited from conducting a soil survey by the owner of the land.

(11) "Domestic grazing land" means all lands devoted to the production of forage from introduced plants that are not part of the original flora of an area that are harvested directly by grazing animals.

(12) "Income from agricultural production" means the gross amount of income received from the sale of food, feed, fiber commodities, livestock, poultry, bees, biological control insects, fruits, vegetables, and also includes sod, ornamental, nursery, and horticultural crops that are raised, grown, or produced for commercial purposes, income from farm rental, the sale of draft, breeding, dairy, or sporting livestock, the share of partnership or family corporation gross income received from a farming or ranching business entity, or the taxpayer's share of distributable income from an estate or trust involved in an agricultural business. When the income from agricultural production is used to qualify land for agricultural land classification, it must be reportable income for income tax purposes. Wages received as a farm employee or received from a farm corporation are not gross income from farming.

(13) "Land use" means the utilization of land which directly relates to its classification, in accordance with 15-7-103, MCA.

(14) "Lease" means an agreement transferring certain rights to a lessee (tenant), including possession, while still allowing the lessor (landlord) to retain fee ownership.

(15) "Livestock" means the same as it is defined in 15-1-101, MCA.

(16) "Native grazing land" means all lands devoted to the production of forage from native or naturalized plants that are harvested directly by grazing animals.

(17) "Nonqualified agricultural land" means parcels of land of 20 acres or more but less than 160 acres under one ownership that are not eligible for classification as agricultural land under 15-7-202(1), MCA.

(18) "Not completed or NOTCOM land" is a term used by the Natural Resource Conservation Service to describe lands where they have not completed a soil survey or have completed the soil survey but the results have not been published for public use.

(19) "Parcel" means a tract or plot of land distinguishable by ownership boundaries.

(20) "Pertinent" means scientific, verifiable information relating directly to a specific geographical area that could affect the productive capacity of the land.

(21) "Poultry" means the same as it is defined in 15-1-101, MCA.

(22) "Productivity" means the ability of a soil to produce crops or forage at the location, and under the environment and a specified system of management. Productivity can change over time due to changes in soil fertility or more efficient farming practices and equipment.

(23) "Productivity value" means the per-acre value of the agricultural land based on its productivity. The productivity value is determined using the formula provided in 15-7-201, MCA, and described in the subchapter.

(24) "Residence" means all conventionally constructed homes, as well as all mobile homes and manufactured housing, that may serve as living quarters for one or more individuals or a family, regardless of actual occupancy.

(25) "Residential" means land used for the purpose of family housing.

(26) "Residential use only" means land that allows buildings for the purpose of family housing and restricts commercial or industrial buildings.

(27) "Site-specific" means data associated within a defined geographic area, usually composed of similarly situated parcels of land characterized by reoccurring patterns of soils, geology, climate, water resources, and land use. Site-specific data may refer to one continuous area or several separate nearby areas. Site-specific data rarely references an individual ownership or an individual parcel of land.

(28) "Sole proprietorship" for the purposes of qualifying land for agricultural land classification under the provisions of 15-6-133 and 15-7-202, MCA, and ARM 42.20.682, means an ownership of agricultural land in the name of one or more individuals which can be any of the following: grandparent(s), parent(s), spouse, sibling(s), children, stepchildren, aunt(s), uncle(s), and first generation cousin(s).

(29) "Under one ownership" means when two or more parcels of land are deeded under an owner's identical name or when an owner has obtained department recognition of parcels under one ownership through the affidavit process described in ARM 42.20.620.

History

Authorizing statute(s): 15-7-111, MCA
Implementing statute(s): 15-1-101, 15-6-133, 15-7-201, 15-7-202, MCA
History: NEW, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2004 MAR p. 3160, Eff. 12/17/04; AMD, 2007 MAR p. 119, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2065, Eff. 1/1/17; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.602 Steps in Determining the Classification of Agricultural Land

(1) Steps in the agricultural classification process may include the use of:

(a) department land use maps;

(b) internal desktop land use classification, using the criteria for each agricultural land use;

(d) a Geographic Information System (GIS) to digitally identify each producer's agricultural land use.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-208, MCA
History: NEW, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.603 Valuation of Agricultural Land That Does Not Have a Published Soil Survey

(1) Denied access (DA) lands and not completed (NOTCOM) lands do not currently have any agricultural use productivity information associated with them from a published soil survey.

(2) When DA and NOTCOM lands are encountered in the department's efforts to assign a productivity to an agricultural use, the department will use Geographic Information System (GIS) technology to determine the average level of productivity in the same agricultural use from the surrounding soils within one mile of the DA or NOTCOM land and will assign the average level of productivity to the DA lands.

(3) Where an inadequate number of acres within the same use class with productivity information are not identified in the one-mile buffer routine, the buffer routine is expanded to include all acres with the same use and productivity information within five miles of the property. On occasion the buffer routine is expanded to 20 miles to ensure that an adequate number of acres with soils productivity information and in the same use are identified.

History

Authorizing statute(s): 15-7-111, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-208, MCA
History: NEW, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14.

Mont. Admin. R. 42.20.604 Steps in Determining the Productivity of Agricultural Land

(1) Productivity is determined using the Natural Resource Conservation Service (NRCS) soil surveys. The productivity determination is specific to the agricultural land use classification under typical management practices.

(2) Productivity is adjusted to reflect, as near as possible, typical management practices for an area using the following procedures:

(a) for lands whose productivity is based on bushels of spring wheat per acre, the soil survey productivity in the following counties is adjusted on a regional basis by multiplying the soil survey productivity by the regional adjustment. The county designations and regional adjustments are as follows:

(i) Region 1: Beaverhead, Broadwater, Deer Lodge, Flathead, Gallatin, Granite, Jefferson, Lake, Lewis and Clark, Lincoln, Madison, Mineral, Missoula, Powell, Ravalli, Sanders, and Silver Bow is 0.86;

(ii) Region 2: Big Horn, Blaine, Carbon, Carter, Cascade, Chouteau, Custer, Fallon, Fergus, Garfield, Glacier, Golden Valley, Hill, Judith Basin, Liberty, Meagher, Musselshell, Park, Petroleum, Phillips, Pondera, Powder River, Prairie, Rosebud, Stillwater, Sweet Grass, Teton, Toole, Treasure, Wheatland, and Yellowstone is 0.77; and

(iii) Region 3: Dawson, Daniels, McCone, Richland, Roosevelt, Sheridan, Valley, and Wibaux is 0.70;

(b) for irrigated lands, the soil survey productivity for tons of irrigated alfalfa hay per acre is adjusted on a county-by-county basis;

(c) for grazing land, the production for the amount of air-dry herbage grown in "unfavorable" condition years is used to determine the land's productivity in animal unit months based on the requirements to sustain a 1,200-pound animal unit;

(d) the department will use the following formula to calculate the carrying capacity for nonirrigated native grazing land:

(i) per-acre per-year dry herbage production multiplied by 0.25 equals the per-acre per-year dry herbage production consumed by livestock;

(ii) per-acre per-year dry herbage production consumed by livestock divided by 1,098 pounds of dry herbage production consumed per-month per-animal unit equals the animal unit months per acre (AUMs/acre); and

(iii) livestock acres grazed multiplied by AUMs/acre equals the total AUMs; and

(e) for nonirrigated hay land, the midpoint production of the amount of air-dry herbage grown between "unfavorable" condition years and "normal' condition years divided by 2,000 pounds is used to determine the land's productivity in tons per acre.

History

Authorizing statute(s): 15-7-111, MCA
Implementing statute(s): 15-7-201, 15-7-202, MCA
History: NEW, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2065, Eff. 11/11/16.

Mont. Admin. R. 42.20.605 Agricultural Lands

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-103, MCA
History: Eff. 12/31/72; AMD, Eff. 2/3/77; AMD, 1985 MAR p. 2023, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; TRANS from ARM 42.20.141 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; REP, 2014 MAR p. 2994, Eff. 12/12/14.

Mont. Admin. R. 42.20.606 Exceptions to Agricultural Land Assessment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-6-134, 15-7-201, 15-7-202, 15-44-101, 15-44-102, 15-44-103, MCA
History: NEW, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; REP, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.607 Correction of Value Before Reappraisal (vbr) for 2009 Agricultural Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, 15-7-201, MCA
History: NEW, 2010 MAR p. 1408, Eff. 6/11/10; REP, 2014 MAR p. 2994, Eff. 12/12/14.

Mont. Admin. R. 42.20.610 Classification of Easements on Agricultural Land

(1) Road, irrigation ditch, or power line easements that do not transfer title to such rights-of-way are taxable and will be classified as adjoining agricultural land.

(2) A deeded right-of-way that is conveyed through a deed or other instrument, from a private owner to a government agency or other tax-exempt entity is not taxable and the acreage is deducted from the ownership. If the deeded right-of-way splits two or more ownerships, such as along a deeded county road, the department will deduct proportional amounts of acreage from each ownership. A record of the conveyance must be available in the local county clerk and recorder's office.

History

Authorizing statute(s): 15-7-111, MCA
Implementing statute(s): 15-7-103, 15-7-201, 15-7-206, MCA
History: NEW, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.615 Application for Agricultural Classification of Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-202, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1996 MAR p. 1172, Eff. 4/26/96; TRANS from ARM 42.20.139 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2015 MAR p. 2350, Eff. 1/1/16; REP, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.620 Application and Classification Requirements for Agricultural Land Totaling Less Than 160 Acres

(1) Multiple parcels of land totaling less than 160 acres, both contiguous and noncontiguous, under one ownership, actively devoted to agricultural use and part of a bona fide agricultural operation may be classified as agricultural land for the current tax year if the property owner submits an Agricultural Land Classification Application (application) to the department by March 1 and the land meets all of the production and income requirements provided in this rule, ARM 42.20.682, and ARM 42.20.683 for agricultural land classification. The department's application review process may include a field evaluation, additional information requests, and will conclude with the approval or denial of an application.

(2) A person who owns contiguous parcels of land deeded in non-identical names may file an affidavit with the department attesting that the names are one and the same person, for the department's determination of under one ownership.

(3) Noncontiguous parcels of land that are an integral part of the agricultural operation may combine agricultural production income and livestock carrying capacity of the parcels of land to meet agricultural land classification requirements. Each noncontiguous parcel of land that is not part of a larger agricultural operation, must individually meet the agricultural land classification requirements set forth in this rule.

(4) The land must produce an agricultural product provided under the term "agricultural" found in 15-1-101, MCA.

(5) The property owner must submit documentation to verify $1,500 annual gross income or more in sales of agricultural products, other than livestock, marketed by the property owner, the property owner's family members, or the property owner's agent, employee, or lessee. Acceptable income documentation includes:

(a) sales receipts, cancelled checks, copies of income tax statements, or other written evidence of sales transactions;

(b) annual rental or lease payments of at least $1,500, if the land is in an agricultural use and capable of sustaining that agricultural use; or

(6) For parcels of land under 20 acres, (5)(b) and (c) are not considered eligible agricultural income sources.

(7) Land used to raise livestock must have the capacity to produce forage based on the United States Department of Agriculture, Natural Resources and Conservation Service (NRCS), soil survey to support a minimum carrying capacity expressed in animal unit months, as provided in 15-7-201, MCA, and ARM 42.20.681. The department calculates the carrying capacity for:

(a) non-irrigated native grazing land from the NRCS soil survey information;

(b) non-irrigated domestic grazing land by increasing the estimated non-irrigated native grazing land carrying capacity in (a) by 50 percent; and

(8) For land other than grazing land used to raise crops for consumption by livestock, poultry, or other animals in the agricultural operation rather than for market, the property owner must prove that the land produced the annual equivalent of $1,500 in gross agricultural income from these crops. Income documentation must include a written record of the weight or quantity of agricultural crop produced and the current commodity price. The crop value is determined by multiplying the quantity by the commodity price. Receipts from the sales of agricultural products from livestock, domestic animals, and wildlife, provided in 15-1-101, MCA, are not eligible for meeting the $1,500 annual gross income requirement but may be submitted to prove a commercial purpose of operation.

(9) Non-irrigated summer fallow farmland must meet the income requirements in (5) and (6) in the year it is cropped.

(10) Annual gross income documentation from the prior year may be submitted if:

(a) the land experienced a production failure in the current year that was beyond the control of the property owner from drought, fire, hail, insect infestation, frost, flood, or excessive rain. The department does not allow the results of overgrazing and other management practices as sources of production failure;

(b) the property owner; the property owner's family members; or the property owner's agent, employee, or lessee delayed marketing agricultural products they grew, raised, or produced from the land, to take advantage of future economic conditions. The marketing delay must not exceed 12 months from the initial date of application for agricultural land classification.

(11) Land previously classified as agricultural land or nonqualified agricultural land in a prior year which is now reduced to less than 20 acres as the result of eminent domain, authorized under 70-30-102, MCA, maintains its classification unless the land has been further divided or is devoted to a residential, commercial, or industrial use, as provided in 15-7-202, MCA. The property owner must notify the department of the land's eligibility to maintain its agricultural land classification by submitting a Request for Informal Classification and Appraisal Review, Form AB-26.

(12) For land less than 20 acres under one ownership with a portion of the land classified as forest land, the remainder of the acres are classified as agricultural land if the land meets the requirements of agricultural land classification.

(13) The department may change an agricultural land classification if the:

(a) property changes ownership;

(b) property is subdivided; or

(14) Land classified as agricultural land will remain classified as agricultural land until the department determines the land use has changed.

(15) If the property owner disagrees with the department's reclassification action, the owner must submit an Agricultural Land Classification Application, within 30 days of the date on their reclassification notification.

(16) If a property owner owns personal property related to the bona fide agricultural operation, and the market value of the personal property is above the threshold provided in 15-6-138, MCA, then the property owner must submit to the department each year a completed personal property reporting form in accordance with the requirements provided in 15-8-301, MCA, and ARM 42.21.158.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-102, 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; AMD, 1991 MAR p. 2042, Eff. 11/1/91; AMD, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1996 MAR p. 1172, Eff. 4/26/96; AMD, 1997 MAR p. 1827, Eff. 10/7/97; AMD and TRANS, from ARM 42.20.147, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2004 MAR p. 2106, Eff. 9/3/04; AMD, 2004 MAR p. 3160, Eff. 12/17/04; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2008 MAR p. 1822, Eff. 8/29/08; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2017 MAR p. 2198, Eff. 11/25/17; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.621 2015 Calculation of Value Before Reappraisal (vbr) for Agricultural Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-101, 15-7-103, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 2014 MAR p. 3097, Eff. 12/25/14; REP, 2015 MAR p. 2350, Eff. 1/1/16.

Mont. Admin. R. 42.20.625 Criteria for Agricultural Land Valuation for Land Totaling 20 to 160 Acres in Size

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-6-134, 15-7-201, 15-7-202, MCA
History: NEW, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1996 MAR p. 1172, Eff. 4/26/96; AMD and TRANS, from ARM 42.20.150, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2004 MAR p. 2106, Eff. 9/3/04; AMD, 2004 MAR p. 3160, Eff. 12/17/04; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2008 MAR p. 1822, Eff. 8/29/08; AMD, 2010 MAR p. 549, Eff. 2/26/10; REP, 2014 MAR p. 2994, Eff. 12/12/14.

Mont. Admin. R. 42.20.630 Production Failures

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; AMD, 1997 MAR p. 1827, Eff. 10/7/97; AMD and TRANS, from ARM 42.20.148, 2003 MAR p. 1888, Eff. 8/29/03; REP, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.635 Marketing Delay for Economic Advantage

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; AMD, 1997 MAR p. 1827, Eff. 10/7/97; AMD and TRANS, from ARM 42.20.149, 2003 MAR p. 1888, Eff. 8/29/03; REP, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.640 Classification of Land 160 Acres or Larger in Size

(1) In accordance with the provisions of 15-7-202, MCA, contiguous parcels of land with 160 acres or more and under one ownership as defined in ARM 42.20.601 shall be classified as agricultural land, provided that no portion of the land meets the requirements for forest land classification and other restrictions described in ARM 42.20.156.

(2) Land under the CRP, the Integrated Farm Management (IFM) program, or any similar program shall remain classified as it was prior to enrollment in the program.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-201, 15-7-202, MCA
History: NEW, 1993 MAR p. 3048, Eff. 12/24/93; AMD and TRANS, from ARM 42.20.153, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.645 Classification and Assessment of Those Portions of Any Agricultural, Nonqualified Agricultural, or Forest Land Parcels That Are Residential, Commercial, or Industrial Sites

(1) Any portion of any parcel of land that is used as a residential, commercial, or industrial site (except for the one-acre area beneath the residence on agricultural land, which is valued as agricultural land according to 15-7-206 , MCA) , shall not be classified as agricultural land, nonqualified agricultural land, or forest land.

(2) Land in contiguous ownerships less than 160 acres in size that do not meet agricultural, nonqualified agricultural land, or forest land eligibility requirements will be valued as class 4 property.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 1985 MAR p. 2025, Eff. 1/1/86; AMD, 1997 MAR p. 1827, Eff. 10/7/97; AMD and TRANS, from ARM 42.20.159, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06.

Mont. Admin. R. 42.20.650 Valuation of Nonqualified Agricultural Land from 20 to 160 Acres

(1) Parcels of land that meet the criteria as nonqualified agricultural land under ARM 42.20.601 are valued at the statewide average productivity value of grazing land.

(2) Parcels of land not qualifying for forest land under ARM 42.20.705 and that qualify as nonqualified agricultural land under ARM 42.20.601 are valued at the statewide average productivity value of grazing land.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-201, 15-7-202, MCA
History: NEW, 1993 MAR p. 3048, Eff. 12/24/93; AMD and TRANS, from ARM 42.20.152, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10.

Mont. Admin. R. 42.20.655 Classification and Valuation of One-Acre of Land Beneath Residences Located on Agricultural Land and Nonqualified Agricultural Land

(1) Each one-acre of land beneath any residences located on agricultural land is classified as agricultural land and valued according to the highest productivity value of agricultural land, in accordance with 15-7-206, MCA.

(2) Each one-acre of land beneath any residences located on nonqualified agricultural land is classified as class four land and valued according to the market value of comparable land.

(a) If the one acre of land is located on a nonqualified agricultural parcel of land that is many miles from a suburban area, the market value assigned to the land will be consistent with the market value of comparable land. In no case will the market value be lower than the lowest market value assigned to improved tracts within the county.

(b) If the one acre of land is located on a nonqualified agricultural parcel of land that is near a suburban area, the market value assigned to the land will be consistent with the market value of surrounding suburban land.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-7-103, 15-7-201, 15-7-202, 15-8-111, MCA
History: NEW, 1985 MAR p. 2025, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1996 MAR p. 1172, Eff. 4/26/96; TRANS from ARM 42.20.134 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.660 Nonirrigated Summer Fallow Farm Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-7-201, MCA
History: Eff. 12/31/72; AMD, Eff. 2/3/77; AMD, 1993 MAR p. 3048, Eff. 12/24/93; TRANS from ARM 42.20.144 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2341, Eff. 1/1/17; REP, 2020 MAR p. 188, Eff. 2/1/20.

Mont. Admin. R. 42.20.665 Nonirrigated, Continuously Cropped Farm Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-7-201, MCA
History: Eff. 12/31/72; AMD, Eff. 2/3/77; AMD, 1993 MAR p. 3048, Eff. 12/24/93; TRANS from ARM 42.20.145 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2341, Eff. 1/1/17; REP, 2020 MAR p. 188, Eff. 2/1/20.

Mont. Admin. R. 42.20.670 Nonirrigated Continuously Cropped Hay Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-7-201, MCA
History: Eff. 12/31/72; AMD, Eff. 2/3/77; AMD, 1985 MAR p. 2023, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; TRANS from ARM 42.20.143 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2341, Eff. 1/1/17; REP, 2020 MAR p. 188, Eff. 2/1/20.

Mont. Admin. R. 42.20.675 Irrigated Agricultural Farm Land Valuation

(1) The department calculates productivity per acre values for irrigated farm land using the formula provided in 15-7-201, MCA. However, the department applies the formula per industry standard as I/R=V.

(2) The department calculates net income per acre (I) by:

(a) multiplying the land's soil productivity by the average commodity price provided in ARM 42.20.681 to determine the gross income per acre;

(b) multiplying the gross income per acre by the land owner's typical crop share percentage for irrigated farm land which is 25%; and

(3) The department calculates the minimum value of irrigated farm land by determining net income per acre (I) by:

(a) multiplying a productivity of 21 bushels of spring wheat per acre by the commodity price provided in ARM 42.20.681 to determine gross income per acre; and

(b) multiplying the gross income per acre by the land owner's typical crop share percentage for non-irrigated continuously cropped farm land which is 25%.

(4) Pursuant to 15-7-201, MCA, the department assigns the irrigated farm land the higher per acre value as calculated in (2) and (3).

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-7-201, MCA
History: Eff. 12/31/72; AMD, Eff. 2/3/77; AMD, 1985 MAR p. 2023, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; AMD, 1996 MAR p. 1172, Eff. 4/26/96; TRANS from ARM 42.20.146 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2341, Eff. 1/1/17; AMD, 2020 MAR p. 188, Eff. 2/1/20; AMD, 2020 MAR p. 1881, Eff. 10/24/20; AMD, Notice No. 2025-21, Eff. 3/29/25.

Mont. Admin. R. 42.20.676 Non-Irrigated Agricultural Land Valuation

(1) The department calculates productivity per acre values for non-irrigated agricultural land subclasses described in (3) and (4) using the statutory formula provided in 15-7-201, MCA. However, the department applies the formula per industry standard as I/R = V.

(2) The department calculates net income per acre (I) for the land subclasses in (3) by:

(a) multiplying the land's soil productivity by the average commodity price provided in ARM 42.20.681 to determine the gross income per acre; and

(b) multiplying the gross income per acre by the land owner's typical crop share percentage.

(3) The land owner's typical crop share percentage for non-irrigated summer fallow farm land is 12.5% and for non-irrigated continuously cropped farm land and non-irrigated continuously cropped hay land is 25%.

(4) For grazing land, the department determines net income per acre by deducting the land owner's expenses of 25% from the gross income per acre value.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-7-201, MCA
History: NEW, 2020 MAR p. 188, Eff. 2/1/20.

Mont. Admin. R. 42.20.680 Grazing Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-103, 15-7-201, MCA
History: Eff. 12/31/72; AMD, Eff. 2/3/77; AMD, 1985 MAR p. 2023, Eff. 12/27/85; AMD, 1993 MAR p. 3048, Eff. 12/24/93; TRANS from ARM 42.20.142 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2008 MAR p. 1822, Eff. 8/29/08; AMD, 2010 MAR p. 549, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2341, Eff. 1/1/17; REP, 2020 MAR p. 188, Eff. 2/1/20.

Mont. Admin. R. 42.20.681 Agricultural Commodity Prices and Values

(1) Commodity prices for the 2025-2026 appraisal cycle used for the determination of income are calculated using a 10-year Olympic average of prices from Montana Agricultural Statistics for the years 2014-2023. The department's Olympic average removes the highest price and the lowest price and averages the remaining eight prices. The commodity prices used for valuing agricultural land for the 2025-2026 appraisal cycle are as follows:

(a) Spring wheat price used in the valuation of non-irrigated summer fallow and non-irrigated continuous cropped farm lands is $6.11 per bushel.

(b) Alfalfa hay price, reduced by 20 percent as required by 15-7-201, MCA, used in the valuation of irrigated and non-irrigated hay lands is $124.20 per ton.

(2) The minimum value of irrigated land as determined by the methodology detailed in ARM 42.20.675 is $501.21 per acre.

(3) The statewide grazing productivity average is .21 AUMs per acre, and is used in calculating the values of:

(a) nonqualified agricultural lands; and

(b) nonproductive patented mining claims.

(4) For the 2025-2026 appraisal cycle the capitalization rate for Class 3 agricultural land, which is used to convert an ongoing income stream into an estimate of value is 6.4 percent.

(5) For the 2025-2026 appraisal cycle the highest productivity of non-irrigated continuously cropped farmland is 60 bushels per acre, and is used in calculating the values of specialty crop land.

(6) For the 2025-2026 appraisal cycle, the value of the one acre beneath a residence on agricultural land is $2,326.

(7) For the 2025-2026 appraisal cycle, the minimum carrying capacity for grazing land to be eligible for agricultural classification is 22 AUMs as determined by the Montana State University - Bozeman, College of Agriculture, in accordance with ARM 42.20.620.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-133, 15-7-201, 15-7-202, 15-7-206, 15-7-210, MCA
History: NEW, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2341, Eff. 1/1/17; AMD, 2018 MAR p. 2546, Eff. 1/1/19; AMD, 2020 MAR p. 1881, Eff. 10/24/20; AMD, 2022 MAR p. 2366, Eff. 12/24/22; AMD, 2024 MAR p. 2553, Eff. 1/1/25.

Mont. Admin. R. 42.20.682 Family Farm Requirements for Agricultural Land Classification

(1) Parcels of land between 20 acres and 160 acres that do not meet the agricultural land classification income requirements outlined in 15-7-202, MCA, and ARM 42.20.620 but are used for farming or ranching, or as a part of a family farm or ranch business as described in 15-7-202, MCA, may be valued as agricultural land if the following requirements are met:

(a) the property must be located within 15 air miles of the family-operated farm or ranch;

(b) the property owner must submit proof that 51 percent or more of the owner's Montana annual gross income is derived from agricultural production;

(c) the property taxes on the subject property are paid by the family-operated farm or ranch business, which may be a family corporation, family partnership, sole proprietorship, or a family trust; and

(d) the property owner of the property must submit documentation proving that at least 51 percent of the farm or ranch entity's Montana annual gross income is derived from agricultural production.

(2) If the requirements of (1) are satisfied, the land is eligible for agricultural land classification.

(3) The department will accept a copy of a cancelled check as documentation that property taxes were paid by the family-operated business entity. Other acceptable documentation will be considered on a case-by-case basis.

(4) If the property owner is a shareholder, partner, owner, or member of the family-operated farming or ranching entity involved in Montana agricultural production, they may qualify the property as agricultural land if the following documentation submitted details the legal relationship between the owner and the family-operated farming or ranching business entity:

(a) documentation that establishes a legal relationship with the family-operated farming or ranching business entity, such as documents on file with the Montana Secretary of State; and

(b) documentation that indicates at least 51 percent of the property owner's or family-operated farming or ranching business entity's Montana annual gross income comes from agricultural production.

(5) If the requirements of this rule are satisfied, the land is eligible for classification as agricultural land according to its use.

(6) For all agricultural land classification applications received under this rule, acceptable income documentation will be the most recent year's Montana individual and/or corporate tax return, whichever is appropriate. All state and federal income tax forms submitted must detail the amount of income received from agricultural production as well as the amount of Montana gross income.

(7) If a property owner owns personal property related to the family farm or ranch business, and the market value of the personal property is above the threshold provided in 15-6-138, MCA, then the property owner must submit to the department each year a completed personal property reporting form in accordance with the requirements provided in 15-8-301, MCA, and ARM 42.21.158.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2020 MAR p. 1881, Eff. 10/24/20.

Mont. Admin. R. 42.20.683 Specialty and Unique Crops; Additional Requirements for Agricultural Land Classification

(1) For the purpose of this rule, the term "specialty and unique crops" includes, but is not limited to, the agricultural products provided in (3)(a) through (g).

(2) A landowner may apply for agricultural land classification for specialty and unique crops. To receive this agricultural land classification, the landowner must prove that:

(a) the agricultural products they grow, raise, or produce meet the definition of agricultural in 15-1-101, MCA;

(b) the agricultural products are grown, raised, or produced by the land referenced in the agricultural land classification application; and

(c) the marketing of agricultural products, other than livestock grown, raised, or produced by the land results in at least $1,500 annual gross income, as described in ARM 42.20.620.

(3) In addition to the agricultural land classification criteria provided in ARM 42.20.620 and (1), agricultural products grown, raised, or produced by the land must also meet applicable specialty and unique crops requirements.

(a) poultry or game birds must be raised in an unconfined area and receive their general dietary requirements from the land. For poultry and game birds raised in a building, cage, or enclosed area, the land is not eligible for consideration for agricultural land classification.

(b) the sale of honey and other products from bees is considered agricultural income if the landowner or the landowner's business is registered with the Montana Department of Agriculture as an apiary.

(c) the sale of biological control insects is considered agricultural income if the insects are supported solely from vegetation grown on the land.

(d) a garden or produce farm if the plants and nursery stock are grown in and nourished by the land, and are managed using industry standard management practices, including weed and grass maintenance, fencing, and a watering system. Examples of ineligible plants include trees grown in self-contained pots or burlap bags placed in or on the ground and plants grown in flats.

(e) a Christmas trees farm if the landowner provides proof that all trees are cultivated under industry-standard management practices and sheared on a regular basis.

(f) a fruit tree orchard if the landowner provides proof that the orchard is maintained using industry-standard management practices including pest and disease control, wildlife control fencing, weed and grass maintenance, and a watering system.

(g) a vineyard if the landowner provides proof that the vineyard is maintained using industry-standard management practices, including vine pruning, weed and grass maintenance, pest and disease control, and trellising and staking.

(4) As provided in 15-7-202, MCA, land used to grow, raise, or produce the agricultural products in (3)(e), (f), and (g) is eligible for a five-year provisional agricultural land classification. A landowner must submit an application for provisional agricultural land classification on a form provided by the department.

(5) Land used to grow, raise, or produce agricultural products provided in (3)(a) through (g) that qualifies for agricultural land classification is valued at the highest productivity level of non-irrigated continuously cropped farm land, as provided in ARM 42.20.681.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-201, 15-7-202, 15-7-203, 15-7-206, 15-7-207, 15-7-208, 15-7-209, 15-7-210, 15-7-212, MCA
History: NEW, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2065, Eff. 1/1/17; AMD, 2020 MAR p. 107, Eff. 1/18/20.

Subchapter 42.20.7 Forest Land

Mont. Admin. R. 42.20.701 Definitions

The following definitions apply to this subchapter:

(1) "Board foot" means a measurement of wood equivalent to one inch thick by 12 inches long by 12 inches wide.

(2) "Contiguous parcels of land" means separately described parcels of land under one ownership that physically touch one another or would have touched one another were the acreages not separated by:

(a) deeded roads and highways;

(b) rivers and streams;

(d) federal or state land that is leased from the federal or state government by an owner whose land is physically touching the federal or state land.

(3) "Cubic foot" means a measurement of wood equivalent to 12 inches thick by 12 inches long by 12 inches wide. In the forest land productivity model developed by the University of Montana – College of Forestry and Conservation, authorized under 15-44-103, MCA, the conversion factor is one cubic foot will equal four board feet.

(4) "Diameter at breast height (DBH)" means the average trunk diameter, measured outside of the bark, at a point 4.5 feet above the ground on the uphill side of the tree.

(5) "Hardwood species" means broadleaf trees. Examples of hardwood species native to Montana are alder, Rocky Mountain maple, birch, aspen, and cottonwood.

(6) "Land use" means the utilization of the land which directly relates to its classification, in accordance with 15-7-103, MCA.

(7) "Mean annual increment (MAI)" is a measurement of the average annual increase in growth produced in a tree or a natural stand of trees. MAI can be calculated by dividing total tree or natural stand growth by the total age.

(8) "Natural stands" means fully stocked, even-aged groups of softwood stands of trees which naturally regenerate. Further, "fully stocked" means the highest degree in which a natural stand of trees could fully utilize the site's capacity to grow trees.

(9) "Noncommercial forest land" means forest land stocked with trees that are not economical to harvest due to quality and quantity of the wood.

(10) "Nonforest land" means land at least 120 feet in width and at least five acres in size, which does not meet the requirements of ARM 42.20.705. Nonforest land can include rivers and streams, roads, highways, power lines easements, railroads, and noncommercial tree species. Nonforest land is classified as agricultural land, nonqualified agricultural land, residential land, commercial land, or industrial land.

(11) "Nonproductive forest land" means forest land that produces less than 100 board feet per acre annually.

(12) "Ornamental trees" means trees grown commercially to ornament and decorate or for use as shade trees or windbreaks.

(13) "Parcel" means a tract or plot of land distinguishable by ownership boundaries.

(14) "Producing timber" means growing trees, including trees removed through harvest, clear-cut, or by natural disaster.

(15) "Residence" means all conventionally constructed homes, as well as all mobile homes and manufactured housing, that may serve as living quarters for one or more individuals or a family, regardless of actual occupancy.

(16) "Scribner Log Rule" means a forest industry recognized mathematical formula that estimates the net board foot lumber volume that can be sawn from a log that is scaled to a specific diameter and log length. Volumetric yields are based on softwood trees at least 8.0 inches in diameter at breast height (outside bark). Tree volume is measured from a one-foot stump to a six-inch inside bark minimum top. Board foot estimates using the Scribner Log Rule are based on 16-foot nominal log lengths with five percent hidden defect.

(17) "Softwood species" means conifer species that can be economically processed into lumber. Some examples of softwood species that are native to Montana are ponderosa pine, Douglas-fir, larch, lodgepole pine, spruce, and alpine fir.

(18) "Site" means at least 15 contiguous acres with the capacity to grow timber.

(19) "Stocked or stocking" means a measurement of the crown coverage or degree to which an area is effectively covered with living trees.

(20) "Timber" means softwood species that can be economically processed into lumber. Whitebark pine, limber pine, and Rocky Mountain juniper are generally considered to be noneconomical to process into lumber products in Montana and are not classified as commercial softwood species for the purpose of these rules.

(21) "Under one ownership" means when two or more parcels of land are deeded under an owner's identical name or when an owner has obtained department recognition of parcels under one ownership through the affidavit process described in ARM 42.20.705.

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-1-101, 15-44-101, 15-44-102, 15-44-103, 15-44-106, MCA
History: NEW, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2006 MAR p. 3103, Eff. 12/22/06; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2017 MAR p. 2198, Eff. 11/25/17; AMD, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.705 Forest Land Classification

(1) The department classifies contiguous forest land of 15 acres or more, under one ownership which is capable of producing timber that can be harvested in commercial quantity with:

(a) an annual productive capacity of 100 board feet or more of lumber per acre in live softwood trees, measured using the Scribner Log Rule, at the culmination of the MAI for fully stocked natural stands;

(b) softwood timber stocked at 10 percent or greater on an area of at least 120 feet in width; or

(2) Land that does not meet the stocking requirements in (1)(b) or (1)(c) because of timber harvest, clear-cuts, or by natural disaster, but will have trees regenerated within ten years, is classified as forest land.

(3) Land that was classified as forest land in a prior year and is now reduced to less than 15 acres as the result of a land acquisition through eminent domain, as set forth in 70-30-102, MCA, maintains its forest land classification unless the forest land has been further divided or is devoted to a residential, commercial, or industrial use as provided in 15-6-143, MCA.

(4) Forest land classification is not available for nonforest land, nonproductive forest land, noncommercial forest land, or land:

(a) incapable of yielding wood products due to adverse site conditions;

(b) withdrawn from timber use by statute, ordinance, covenant, court order, or administrative order;

(d) producing fruit trees or ornamental trees, including trees used as shade trees and windbreaks.

(5) A person who owns two or more contiguous parcels of land deeded in non-identical names may file an affidavit with the department attesting to the parcels as being under one ownership.

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-6-143, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA
History: NEW, 1992 MAR p. 2650, Eff. 12/11/92; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.160 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.710 Exceptions to Forest Land Assessment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, 15-44-103, MCA
History: NEW, 1992 MAR p. 2650, Eff. 12/11/92; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.162 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.715 Forest Site Productivity

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, MCA
History: NEW, 1992 MAR p. 2650, Eff. 12/11/92; AMD, 1993 MAR p. 2970, Eff. 12/10/93; TRANS from ARM 42.20.164 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.720 Forest Land Valuation Zones

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA
History: NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1997 MAR p. 507, Eff. 3/11/97; TRANS from ARM 42.20.166 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.725 Forest Land Valuation

(1) The department determines productivity value of forest land by dividing the state into four regional forest valuation zones (zone) designed to recognize unique marketing areas, timber types, growth rates, access, and other pertinent factors affecting value. The counties contained within each zone are:

(a) Zone 1 - Northwest: Flathead, Lake, Lincoln, and Sanders counties;

(b) Zone 2 - Southwest: Deer Lodge, Granite, Mineral, Missoula, Powell, Ravalli, and Silver Bow counties;

(c) Zone 3 - Central: Beaverhead, Broadwater, Cascade, Chouteau, Fergus, Gallatin, Glacier, Golden Valley, Hill, Jefferson, Judith Basin, Lewis and Clark, Liberty, Madison, Meagher, Park, Pondera, Sweet Grass, Teton, Toole, and Wheatland counties; and

(d) Zone 4 - Eastern: Big Horn, Blaine, Carbon, Carter, Custer, Daniels, Dawson, Fallon, Garfield, McCone, Musselshell, Petroleum, Phillips, Powder River, Prairie, Richland, Roosevelt, Rosebud, Sheridan, Stillwater, Treasure, Valley, Wibaux, and Yellowstone counties.

(2) The valuation of forest land is provided in 15-44-101 through 15-44-105, MCA. Each zone's productivity value is calculated using the statutory formula provided in 15-44-103, MCA. However, the department applies the formula per industry standard as I/R=V. The department calculates each forest valuation zone's net income per acre (I) by:

(a) multiplying the potential forest productivity, expressed in board feet per acre, by the average per acre stumpage value for the specific forest zone; and

(b) adding the zone-specific per acre agricultural net income provided in (3); and

(3) The department calculates the agricultural-related net income of a zone by:

(a) multiplying the average per acre grazing fee on private land by the

zone-specific average grazing productivity of forest land expressed in animal unit months (AUM) per acre; and

(b) deducting the landowner's grazing expenses of 25 percent from the gross income per acre value.

(4) The department assigns a potential productivity which is a weighted mean of volume produced, expressed in board feet per acre, to each forest acre based on the culmination of MAI measured by the Scribner Log Rule.

(5) The department calculates the per unit cost of forest product produced over the base period provided in 15-44-103, MCA, and determined by:

(a) averaging the actual expenditures for reforestation, fire assessment, slash disposal, timber stand improvement, timber harvest, and forest practices of the Department of Natural Resources and Conservation (DNRC) in each zone over the base period;

(b) adding the average fire assessment fees charged by the DNRC over the base period; and

(6) The department uses the capitalization rate of eight percent as set in

15-44-103, MCA, to convert the net income to a forest land productive value.

(7) The department classifies one-acre of land beneath any residence located on forest land as a forest home-site. The value of the one-acre site will be determined using the sales comparison approach to value.

(8) Land under structures which are associated with forest land management are classified and valued as forest land.

(a) For the purpose of this rule, "associated with forest land management" means the primary use of a structure that supports the health, maintenance, growth, or harvest of the forest land on the property.

(b) If a residence and structures associated with forest land management share the same area, the department will value the one-acre site using the sales comparison approach to value.

History

Authorizing statute(s): 15-1-201, 15-44-105, MCA
Implementing statute(s): 15-6-134, 15-7-103, 15-8-111, 15-44-101, 15-44-102, 15-44-103, 15-44-104, 15-44-106, MCA
History: NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.167 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2015 MAR p. 2350, Eff. 1/1/16; AMD, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.730 Forest Costs

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA
History: NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.168 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2014 MAR p. 2994, Eff. 12/12/14; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.735 Forest Land Eligibility - Ownership

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-44-105, MCA
Implementing statute(s): 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA
History: NEW, 1993 MAR p. 2970, Eff. 12/10/93; AMD, 1998 MAR p. 2505, Eff. 9/11/98; TRANS from ARM 42.20.165 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2017 MAR p. 2198, Eff. 11/25/17; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Mont. Admin. R. 42.20.740 Forest Land Natural Disaster Reduction Property Tax Assistance

(1) Forest land, as defined in 15-44-102, MCA, which is destroyed by fire, disease, insect infestation, or other natural disaster is eligible for a 50 percent reduction in assessed value for 20 tax years beginning the first full tax year following the natural disaster in accordance with 15-44-104, MCA. The affected forest land must have been classified as forest land under 15-6-143, MCA, and had ten percent or greater stocking prior to the natural disaster, and less than ten percent stocking of live trees after the natural disaster.

(2) The property owner must submit a Natural Disaster Application (application) located at http://www.mtrevenue.gov.

(a) For an application that is submitted in the tax year the natural disaster occurred or during the first full tax year following the natural disaster, and the department approves the reduction, the property owner will receive the 50 percent reduction in assessed value for 20 tax years.

(b) For an application that is submitted in any subsequent year after the first full year following the natural disaster, and the department approves the reduction, the property owner will receive the 50 percent reduction for the year the application was submitted and the remaining years of the 20-tax year reduction period.

History

Authorizing statute(s): 15-1-201, 15-44-105, MCA
Implementing statute(s): 15-7-102, 15-44-101, 15-44-102, 15-44-103, 15-44-104, MCA
History: NEW, 1993 MAR p. 2970, Eff. 12/10/93; TRANS from ARM 42.20.169 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2017 MAR p. 2198, Eff. 11/25/17; AMD, 2020 MAR p. 1743, Eff. 9/26/20; AMD, 2024 MAR p. 2399, Eff. 10/5/24.

Mont. Admin. R. 42.20.745 Forest Land Value Change Process (repealed)

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-44-105, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1997 MAR p. 507, Eff. 3/11/97; TRANS from ARM 42.20.170 and AMD, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2010 MAR p. 540, Eff. 2/26/10; AMD, 2014 MAR p. 2994, Eff. 12/12/14; AMD, 2016 MAR p. 2065, Eff. 1/1/17; AMD, 2020 MAR p. 1743, Eff. 9/26/20; REP, 2024 MAR p. 2399, Eff. 10/5/24.

Mont. Admin. R. 42.20.750 Valuation of One Acre Beneath Improvements on Forest Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-44-105, MCA
Implementing statute(s): 15-6-134, 15-7-103, 15-7-201, 15-7-202, 15-8-111, MCA
History: NEW, 2003 MAR p. 1888, Eff. 8/29/03; AMD, 2017 MAR p. 2198, Eff. 11/25/17; REP, 2020 MAR p. 1743, Eff. 9/26/20.

Authorizing statute(s): 15-1-201, 15-30-105, 15-30-140, MCA
Implementing statute(s): Ch. 6 Sp. Laws May 2007, 15-1-201, 15-30-140, MCA
History: NEW, 2007 MAR p. 2156, Eff. 12/21/07; REP, 2011 MAR p. 1395, Eff. 7/29/11.

Subchapter 42.20.9 Privately Owned Sanitary Landfills

Mont. Admin. R. 42.20.901 Landfill Valuation Definitions

The following definitions apply to terms contained in this subchapter:

(1) "Appraisal period" means the reappraisal cycle provided for in 15-7-111, MCA.

(2) "Compaction ratio" refers to the ratio that expresses the relationship of the number of tons that will fill one cubic yard of capacity. For example, if the compaction ratio is .70, then 70% of one ton, 1,400 pounds of waste, can be deposited into one cubic yard of capacity. Compaction ratios for landfills are typically in the .50 to .70 range. Unless the landfill owner or its agent can provide by a preponderance of evidence to the contrary, the compaction ratio will be .70.

(3) "Cover materials" means at least six inches of dirt or a dirt-like substance that is applied to the exposed garbage each day and is not removed. It does not mean a tarp or tarp-like product.

(4) "Discount rate" is a rate expressed in a percentage that is used to discount the annual royalty payments over the projection period to a present value. The majority of the discount rates for landfills are in the 20% to 30% range. Unless the landfill owner or its agent can provide by a preponderance of evidence to the contrary, a discount rate of 20% will be used.

(5) "Improvements" means buildings, scales, and other structures permanently affixed to the ground necessary to operate a landfill.

(6) "Other property related income" means landfill income generated by the property, such as land/dirt farms and methane gas collection.

(7) "Reversionary value" means the market value of the landfill after it is closed.

(8) "Royalty rate" means a rate applied to the annual gross receipts that results in the estimated royalty payment for each year of the projection period. Unless the landfill owner or its agent or the department can provide by a preponderance of evidence to the contrary, the royalty rate will be 10%.

(9) "Royalty method" means a discounted cash flow analysis based on the premise that a landowner would lease land to a licensed landfill operator for a set percentage of the tipping fees received for dumping at the site. The present value of the annual royalty rate of payments must be estimated over the projected economic life of the licensed landfill, plus the present value of the landfill after it is closed.

(10) "Licensed Landfill" means an area of land or an excavation where wastes are placed for permanent disposal, and that is not a land application unit, surface impoundment, injection well, or waste pile. Licensed landfills are subject to federal regulations of the Environmental Protection Agency (EPA) and law as "permitted landfills" under Subtitle D of the Resource Conservation and Recovery Act of 1976 (RCRA) and state regulations through the Department of Environmental Quality (DEQ).

(11) "Tipping fees" are the dollar charge per ton for dumping municipal solid waste and other approved waste at the licensed landfill.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-6-134, 15-7-111, 15-8-111, MCA
History: NEW, 2009 MAR p. 751, Eff. 5/15/09.

Mont. Admin. R. 42.20.902 Method for Valuation of Licensed Landfills

(1) The market value of licensed landfills for each reappraisal cycle shall be determined through use of the royalty method. If during the course of a reappraisal cycle it becomes necessary, pursuant to 15-7-111, MCA, to adjust the market value of the licensed landfill to account for the addition, deletion, or retirement of property, the market value shall be determined through use of the same royalty method.

(2) The royalty method that will be used to determine the market value of licensed landfills will be applied using the following steps:

(a) The department shall estimate the amount of waste coming into the landfill for the appraisal period. The owner of the licensed landfill or its agent shall provide copies of its Department of Environmental Quality, Solid Waste Management System License Renewal Application for each of the immediate five years prior to the appraisal period. The amount of tonnage reported on the applications for the referenced five-year time period will be reviewed to estimate the annual increase of waste tonnage for the remaining economic life of the licensed landfill.

(i) The following calculation will be used to estimate annual incoming waste tonnage:

tons from the most recent year

x (1 + estimated annual increase)

= estimated first year tonnage.

(b) The department shall estimate the licensed landfill owner's annual tipping fees less any bulk discounts for the appraisal period. To accomplish this, the licensed landfill owner or its agent shall identify its annual tipping fees rate for compactor vehicles for the immediate five years prior to the appraisal period. The landfill owner shall identify its annual bulk discount rate by providing copies to the department of all of its annual disposal contracts. The discounted tipping fees for the immediate five years prior to the appraisal period will be reviewed to estimate the annual increase in the discounted tipping fees for the appraisal period. When calculating the discounted tipping fees, the department shall be aware of any potential aberrations identified by the licensed landfill owner or its agent that may exist in the documentation submitted by the landfill owner or its agent pursuant to this section. The department shall take those aberrations under consideration when calculating the discounted tipping fees.

(i) The discounted tipping fees will be calculated as follows:

most current year tipping fees

x (1- most current year bulk discount)

x (1 + estimated annual increase)

= discounted tipping fees for the projected remaining economic life of the licensed landfill.

(c) The department shall calculate the remaining capacity of the licensed landfill for each tax year. To accomplish this, the existing capacity at the beginning of the projection period will be taken from the estimate recorded on the landfill owner's most recent Solid Waste Management System License Renewal Application.

(i) To compute the remaining capacity for each tax year, the tonnage received during the year must be converted into cubic yards of landfill that would be filled. The compaction ratio is used to make the conversion.

(ii) The number of cubic yards used during each year is calculated as follows:

tons received

÷ compaction ratio

= cubic yards used.

(iii) The remaining capacity shall be calculated as follows:

total landfill capacity

- cubic yards used

= airspace capacity before accounting for cover materials.

(iv) If cover materials are used in the landfill, the remaining capacity shall be calculated by multiplying the airspace capacity above-computed by .85 to account for the industry standard of reduction of remaining airspace by 15% for cover materials, otherwise no adjustment for cover material will be made.

(d) The department will use a royalty rate to calculate the estimated royalty payment for each tax year.

(i) The first year's royalty payment is computed as follows:

tons received first year

x discounted tipping fees

x royalty rate

= royalty payment.

(3) The discount rate shall be applied to each year's royalty payment as determined in (2)(d).

(4) The department shall estimate the reversionary value of the closed landfill. To accomplish this, the landfill owner or its agent shall provide the department with a projected closure date. The reversionary value will be discounted to the present worth.

(5) Any other property related income not included in the above calculations shall be added to the overall property value. The department shall consider the cost approach, the sales comparison approach and the income approach to value and use the most defensible approach in estimating the value of the other property related income.

(6) The market value of any improvements to real property owned by the lessee, and not included in the royalty agreement between the lessee and the land owner, will be added to the overall property value.

(7) The department shall calculate the final valuation for each tax year in the appraisal period applying this rule.

(8) Any information required to be supplied by the licensed landfill owner shall be held as confidential by the department.

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-6-134, 15-7-111, 15-8-111, MCA
History: NEW, 2009 MAR p. 751, Eff. 5/15/09.

Chapter 42.21 Personal Property

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-138, MCA
History: NEW, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2003 MAR p. 2901, Eff. 12/25/03; REP, 2005 MAR p. 2262, Eff. 11/11/05.

Mont. Admin. R. 42.21.116 Exempt Intangible Personal Property Deduction for Commercial and Industrial Property

(1) The value of exempt intangible personal property will be for the amount stated in the taxpayer's accounting records subject to review and verification by the department.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-138, 15-6-218, MCA
History: NEW, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2013 MAR p. 2440, Eff. 12/27/13.

Mont. Admin. R. 42.21.120 Treatment of Agricultural Products

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-136, 15-6-207, MCA
History: NEW, 1982 MAR p. 295, Eff. 2/12/82; AMD, 1988 MAR p. 751, Eff. 4/15/88; REP, 1991 MAR p. 915, Eff. 6/14/91.

Mont. Admin. R. 42.21.121 Unprocessed Agricultural Products on the Farm or in Storage, Except Perishable Fruits, Vegetables, Livestock, and Poultry

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-136, MCA, Eff. 12/31/72
History: AMD, Eff. 1/5/74; AMD, 1979 MAR p. 993, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1988 MAR p. 751, Eff. 4/15/88.

Mont. Admin. R. 42.21.122 Livestock

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-136, 15-6-137, 15-6-138, 15-6-207, 15-24-921, 15-24-922, 15-24-925, MCA
History: Eff. 12/31/72; AMD, Eff. 1/5/74; AMD, 1979 MAR p. 802, Eff. 7/27/79; AMD, 1981 MAR p. 523, Eff. 5/29/81; AMD, 1988 MAR p. 751, Eff. 4/15/88; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; REP, 2002 MAR p. 3728, Eff. 12/27/02.

Mont. Admin. R. 42.21.123 Farm Machinery and Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-202, 15-6-207, 15-6-219, 15-8-111, MCA
History: Eff. 12/31/72; AMD, Eff. 1/5/74; AMD, Eff. 5/6/76; AMD, 1979 MAR p. 995, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; AMD, 1981 MAR p. 93, Eff. 1/30/81; AMD, 1982 MAR p. 102, Eff. 1/29/82; AMD, 1982 MAR p. 2153, Eff. 12/17/82; AMD, 1983 MAR p. 1266, Eff. 9/16/83; AMD, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1985 MAR p. 2032, Eff. 1/1/86; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.124 Per Capita Livestock Tax Reporting Procedure

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-207, 15-24-921, 15-24-922, 15-24-925, MCA
History: NEW, 1988 MAR p. 751, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2014 MAR p. 2991, Eff. 12/12/14; REP, 2015 MAR p. 2322, Eff. 1/1/16.

Mont. Admin. R. 42.21.125 Business Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-202, MCA
History: NEW, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2009 MAR p. 2497, Eff. 12/25/09; REP, 2021 MAR p. 1802, Eff. 1/1/22.

Mont. Admin. R. 42.21.131 Heavy Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201,15-23-108, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-202, 15-6-219, MCA
History: Eff. 12/31/72; AMD, Eff. 1/5/74; AMD, 1980 MAR p. 1727, Eff. 6/27/80; AMD, 1981 MAR p. 93, Eff. 1/30/81; AMD, 1982 MAR p. 102, Eff. 1/29/82; AMD, 1982 MAR p. 2153, Eff. 12/17/82; AMD, 1983 MAR p. 1266, Eff. 9/16/83; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.132 Mining Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, MCA
History: Eff. 12/31/72; AMD, 1980 MAR p. 1727, Eff. 6/27/80; AMD, 1981 MAR p. 316, Eff. 3/27/81; AMD, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2006 MAR p. 3108, Eff. 12/22/06; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.133 Oil Field Machinery and Supplies

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-140, MCA
History: Eff. 12/31/72; AMD, Eff. 1/5/74; AMD, Eff. 5/6/76; AMD, 1979 MAR p. 1000, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1984 MAR p. 2036, Eff. 12/28/84.

Mont. Admin. R. 42.21.134 Furniture and Fixtures Used in Commercial Establishments

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-137, 15-6-139, 15-6-140, MCA
History: NEW, Eff. 12/4/76; AMD, 1979 MAR p. 1394, Eff. 11/16/79; AMD, 1981 MAR p. 524, Eff. 5/29/81; REP, 1982 MAR p. 1052, Eff. 5/14/82.

Mont. Admin. R. 42.21.135 Stocks of Merchandise

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-136, 15-24-402, 15-24-403, MCA
History: Eff. 12/31/72; AMD, Eff. 3/7/76; REP, 1983 MAR p. 1266, Eff. 9/16/83.

Mont. Admin. R. 42.21.136 Billboards

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-139, MCA
History: Eff. 12/31/72; AMD, Eff. 1/5/74; AMD, 1979 MAR p. 989, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 1266, Eff. 9/16/83.

Mont. Admin. R. 42.21.137 Seismograph Units and Allied Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-219, MCA
History: NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.138 Oil and Gas Field Machinery and Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-213, 15-6-219, MCA
History: NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1985 MAR p. 2032, Eff. 12/27/85; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.139 Work-Over and Service Rigs

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-219, MCA
History: NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.140 Oil Drilling Rigs

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-219, MCA
History: NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3653, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2011 MAR p. 345, Eff. 3/11/11; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.151 Locally Assessed Cable Television Systems

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-219, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 1001, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; AMD, 1982 MAR p. 102, Eff. 1/29/82; AMD, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 1848, Eff. 9/27/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.152 Bowling Alleys

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-139, MCA
History: Eff. 12/31/72; AMD, Eff. 1/5/74; AMD, 1979 MAR p. 991, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; REP, 1983 MAR p. 1266, Eff. 9/16/83.

Mont. Admin. R. 42.21.153 Ski Lift Equipment

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-219, MCA
History: NEW, Eff. 12/4/76; AMD, 1979 MAR p. 1010, Eff. 8/31/79; AMD, 1979 MAR p. 1304, Eff. 10/26/79; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3316, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.154 Annual Valuation of Personal Property

(1) Except as provided in (5) and (7), personal property is valued annually using the cost approach to market value. The market value is determined by multiplying a trended depreciation percentage times the installed original cost of the property. The department has established specific categories of personal property which are provided in ARM 42.21.155.

(2) Taxable supplies, defined in ARM 42.21.160, are valued at 100% of their acquired cost.

(3) Leased or rental equipment that is not exempt under 15-6-202 or 15-6-219, MCA, is taxable and is valued in the same manner as similar non-leased equipment. Property brought into the state that meets the requirements under 15-6-202, MCA, is not taxable unless it is sold or otherwise disposed of in the state.

(4) Rental videos that are not exempt under 15-6-202 or 15-6-219, MCA, are taxable and have a trended percent good of 25% in year one, 15% in year two, and 10% each year thereafter.

(5) Locally assessed television cable system transmission line is valued at $2,000 per mile; service drops are valued at $25 each.

(6) All downhole equipment installed in oil and gas wells, such as sucker rods, tubing, casing, and submersible pumps are exempt from taxation. Downhole equipment not installed in an oil or gas well as of the January 1 assessment date is taxable.

(7) For farm machinery and equipment and heavy equipment, the department will apply the valuation methods in descending order beginning with the method in (a) and proceeding, where necessary, through the method in (c) until a market value can be determined for the equipment.

(a) The market value will be the "average wholesale" or a comparable category of value as shown in the online version of the national agricultural and implement valuation guide known as Equipment Watch (Equipment Watch), as of September-October of the year prior to the year of assessment. Equipment Watch is adopted and incorporated by reference in accordance with 15-8-111, MCA, and may be reviewed in a department field office or purchased through https://www.equipmentwatch.com.

(b) For all farm machinery and equipment, and heavy equipment that cannot be valued under (a), the department may determine a trended average wholesale value if an average wholesale value is available for the same make and model with a different year new. The trended average wholesale value will be determined by trending the average wholesale value as found in Equipment Watch, for the same make and model with a different year new.

(c) If the valuation methods in (a) and (b) cannot be used, the owner or applicant must certify to the department the year acquired and the acquired price. If the item was acquired through a means other than the open marketplace, the owner must provide a reasonable estimate of the item's value at the time of acquisition. The reported value will be trended and depreciated. If the owner fails to provide this required information or in the department's opinion the information provided does not accurately reflect the item's fair market value, the department may estimate the fair market value of the farm machinery and equipment, or heavy equipment item.

(8) Items of farm machinery and equipment valued below $100 are exempt from taxation.

History

Authorizing statute(s): 15-1-201, 15-23-108, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-202, 15-6-207, 15-6-213, 15-6-219, 15-8-111, MCA
History: NEW, 1982 MAR p. 1052, Eff. 5/14/82; AMD, 1985 MAR p. 2032, Eff. 12/27/85; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2019 MAR p. 209, Eff. 2/23/19; AMD, 2020 MAR p. 97, Eff. 1/18/20; AMD, 2021 MAR p. 1802, Eff. 1/1/22; AMD, 2025 MAR, Notice No. 2025-443, Eff. 1/1/26.

Mont. Admin. R. 42.21.155 Personal Property Categories and Trended Depreciation Methodologies

(1) The department has established eight categories of personal property for determination of trend factors and depreciation, and trended depreciation schedules of four, five, ten, fifteen, or twenty years have been assigned for each category based on its type and expected useful lifespan, as provided in (4). The equipment listings in (4) provide representative examples of property in a category and are not meant to be an exhaustive list.

(2) Each trended depreciation schedule contains a residual trended percent good, designated as "older" in the final row of each schedule, which is applied to an item of personal property that exceeds the typical lifespan because personal property remains taxable until its disposal. The department may assign a lower residual trended percent good to reflect functional obsolescence for certain categories of equipment. The purpose of trended depreciation is to bring the cost of equipment acquired in a previous year to an approximate current cost before depreciating it.

(3) Prior to January 1 of each year, the department will use cost index trends for equipment and depreciation percentages for furniture and fixtures from the previous July's edition of Marshall & Swift Valuation Service Guide (Marshall & Swift Guide) to calculate the trend factors and the trended percent good for the schedules in (4). The Marshall & Swift Guide is a widely recognized valuation authority which the department adopts and incorporates by reference. The Marshall & Swift Guide may be reviewed at the department's central office or purchased through Corelogic at https://www.cotality.com/products/marshall-swift.

(a) The trends from the Marshall & Swift Guide represent industry-wide national average changes in equipment costs - customarily increases - from the base year, 1926. Trends are typically greater than a value of one, but may be less than one.

(b) For trended depreciation schedules, the department calculates the year one trend for each schedule as the average trend of the first three quarters of the current year. The trend for each successive year is the final trend for that year.

(i) Using year one as the base year, the department calculates the changes in equipment costs - the trend factors - for each schedule in (4), as the quotient of the year one trend and any following year's trend.

(ii) The department then uses the depreciation percentages from the Marshall & Swift Guide to calculate the "percent good" over the period of years that is typical for each property category. Trended percent good is then calculated as the product of the percent good and the trend factor for each year represented in a schedule.

(4) The department shall post its trended depreciation schedules for the upcoming tax year for the categories of personal property described below on the department's website located at https://www.revenue.mt.gov. The department adopts and incorporates by reference its 2026 Personal Property Depreciation Schedules and Trend Tables publication (v. 2), effective June 6, 2026. The Depreciation Schedules and Trend Tables publication contains the detailed schedules and tables the department uses for valuing personal property and industrial machinery and equipment. The personal property categories and trended depreciation methodologies that apply to the Depreciation Schedules and Trend Tables publication are as follows:

(a) Computerized Equipment - a four-year depreciation and a residual percentage will be applied to computerized equipment such as computers, peripheral equipment that cannot function independently of a computer, computerized medical equipment, and gaming machines. The four-year depreciation schedule was developed and implemented after consultation with industry representatives; the trend factors are calculated from the office equipment category of the Marshall & Swift Guide.

(b) Office and Commercial Equipment - a five-year depreciation and a residual percentage will be applied to non-computerized equipment such as office equipment and furnishings, specialized medical equipment, janitorial equipment, coin-operated washers and dryers, beauty and barber shop equipment, tanning beds, furnishings for hotels, motels, rental apartments, rental homes, nursing home and other care facilities, and locally assessed cable tv dishes. The trend factors are calculated from the office equipment category of the Marshall & Swift Guide.

(c) Furniture, Fixtures, and Miscellaneous Equipment - a ten-year depreciation and a residual percentage will be applied to all other commercial furniture and fixtures such as handheld and non-handheld shop and construction tools and equipment, medical and dental chairs and tables, theater equipment, survey equipment, billboards and signage, garbage bins, coin-operated pool and other game tables, gas pumps, bar and restaurant equipment and furnishings, bowling alleys and equipment, excepting auto-scorers which have a four-year depreciation, photo and developing equipment, mortuary equipment, safes, security systems, port-a-potties, locally assessed cable tv towers, ski lift equipment including aerial lifts, surface lifts, portable lifts and tows including the towers, cables, ropes, sheave assemblies, the conveying devices, power units, and all accessories. The trend factors are calculated from the average-of-all category of the Marshall & Swift Guide.

(d) Seismograph Units and Allied Equipment - a five-year depreciation and a residual percentage will be applied to seismograph units and allied equipment. An 80 percent wholesale factor is used for wheeled seismograph units. The trend factors are calculated from the chemical industry category of the Marshall & Swift Guide.

(e) Oil Drilling, Workover, and Service Rigs - a ten-year depreciation and a residual percentage will be applied to all oil drilling, workover, and service rigs. An 80 percent wholesale factor is applied to self-propelled wheeled workover and service rigs. The trend factors are calculated from the chemical industry category of the Marshall & Swift Guide.

(f) Oil and Gas Field Machinery and Equipment - a fifteen-year depreciation and a residual percentage will be applied to oil and gas field machinery and equipment. The trend factors are calculated from the chemical industry category of the Marshall & Swift Guide.

(g) Farm Machinery and Equipment - a twenty-year depreciation and a residual percentage will be applied to farm machinery and equipment. A 50 percent wholesale factor is applied. The trend factors are calculated from the average-of-all category of the Marshall & Swift Guide.

(h) Heavy Equipment - a twenty-year depreciation and a residual percentage will be applied to heavy equipment. A 50 percent wholesale factor is applied. The trend factors are calculated from the contractor's equipment category of the Marshall & Swift Guide.

History

Authorizing statute(s): 15-1-201, 15-23-108, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-202, 15-6-207, 15-6-213, 15-6-219, 15-8-111, MCA
History: NEW, 1982 MAR p. 1052, Eff. 5/14/82; AMD, 1985 MAR p. 2032, Eff. 12/27/85; AMD, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1988 MAR p. 747, Eff. 4/15/88; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1999 MAR p. 154, Eff. 12/18/98; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; AMD, 2019 MAR p. 209, Eff. 2/23/19; AMD, 2020 MAR p. 97, Eff. 1/18/20; AMD, 2020 MAR p. 2276, Eff. 1/1/21; AMD, 2021 MAR p. 1802, Eff. 1/1/22; AMD, 2022 MAR p. 2368, Eff. 12/24/22; AMD, 2023 MAR p. 1896, Eff. 1/1/24; AMD, 2024 MAR p. 2642, Eff. 1/1/25; AMD, 2025 MAR, Notice No. 2025-443, Eff. 1/1/26; AMD, 2026 MAR, Notice No. 2026-82, Eff. 6/6/26.

Mont. Admin. R. 42.21.156 Categories

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-138, MCA
History: NEW, 1982 MAR p. 1054, Eff. 6/14/82; AMD, 1985 MAR p. 2032, Eff. 12/27/85; AMD, 1989 MAR p. 613, Eff. 5/12/89; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2010 MAR p. 3022, Eff. 12/24/10; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.157 Preparation of Trend Factor Schedules

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-138, MCA
History: NEW, 1982 MAR p. 1052, Eff. 5/14/82; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1992 MAR p. 2394, Eff. 10/30/92; AMD, 1999 MAR p. 309, Eff. 2/12/99; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2010 MAR p. 3022, Eff. 12/24/10; REP, 2019 MAR p. 209, Eff. 2/23/19.

Mont. Admin. R. 42.21.158 Personal Property Reporting Requirements

(1) A taxpayer having property in the state of Montana on January 1 of each tax year, must complete the statement as provided in 15-8-301, MCA, by submitting a completed personal property reporting form.

(2) The statement must provide pertinent information about each item of personal property, including the year acquired, acquired cost, and installation cost. For any items acquired through a means other than the open marketplace, the owner must provide a reasonable estimate of the item's open market value at the time of acquisition. Multiple smaller items acquired in the same year can be reported as a group rather than itemized, such as hand-held tools.

(3) Personal property that is expensed or fully depreciated for other tax or accounting purposes remains taxable for property tax purposes and must be reported.

(4) For the purposes of this rule, the statewide aggregate market value of a taxpayer's personal property includes all property owned, claimed, possessed, controlled, or managed by an individual or business entity, either directly or indirectly through an affiliated entity or family member, unless that property is specifically exempted by law.

(5) As used in this rule, "affiliated entity" means:

(a) a member of a combined group of unitary corporations filing a Montana corporation license tax return;

(b) a member of an affiliated group of corporations filing a U.S. Consolidated Income Tax Return;

(c) any corporation if the individual or business entity directly or indirectly owns more than 50 percent of the stock value or voting power;

(d) any partnership if the individual or business entity directly or indirectly owns more than 50 percent of the capital interest in, or the profits of, the partnership;

(e) a corporation and a partnership if the same persons own:

(i) more than 50 percent in value of the corporation's stock; and

(ii) more than 50 percent of the capital interest in, or the profits of, the partnership;

(f) an S corporation and another S corporation, if the same individuals own more than 50 percent in value of the outstanding stock of each corporation;

(g) an S corporation and a C corporation, if:

(i) the same individuals own more than 50 percent in value of the outstanding stock of each corporation; and

(ii) any trust, if the individual or business entity is the grantor or a beneficiary.

(6) For purposes of applying (4) and (5):

(a) stock owned, directly or indirectly, by or for a corporation, partnership, estate, or trust is considered as being owned proportionately by or for its shareholders, partners, or beneficiaries; and

(b) an individual is considered as owning the stock, directly or indirectly, by the individual's spouse or minor child.

(7) As determined by the department, if the statewide aggregate market value of an individual's or business entity's class eight property is less than or equal to the exemption provided in 15-6-138, MCA, the individual's or business entity's class eight property is exempt from taxation. If the aggregate market value of an individual's or business entity's class eight property is greater than the exemption provided in 15-6-138, MCA, the market value of an individual's or business entity's class eight property that is greater than the exemption is subject to taxation.

(8) The department will apply the exemption and the applicable tax rates identified in (a) and (b) to an individual's or business entity's class eight property by adding together the statewide market value of class eight property owned by the individual or business entity to determine the aggregate market value. If the aggregate market value of class eight property is:

(a) less than or equal to the exemption provided in 15-6-138, MCA, the taxable market value of the property is zero; or

(b) greater than the exemption provided in 15-6-138, MCA, the department will apply the exemption proportionally among each property owned, apply the 1.5 percent taxable rate to the first $6,000,000 in excess of the exemption, and apply the 3 percent taxable rate to the remaining taxable market value.

(9) When the department requires a personal property statement/reporting form as provided in 15-8-301, MCA, the statement/reporting form shall advise the taxpayer that they are subject to penalty under the provisions of 15-1-303 and 15-8-309, MCA, or any other applicable statute, for refusing or neglecting to respond to the department's request for information. The taxpayer's completed personal property statement/reporting form must be returned to the department by electronic submission or postmarked no later than February 15.

(10) A taxpayer's completed statement/reporting form with an electronic date stamp or postmarked after February 15 will be subject to the penalties referenced in (9) unless the taxpayer provides:

(a) evidence of their inability to comply with the timeframes due to hospitalization, physical illness, infirmity, or mental illness; and

(b) evidence that this/these condition(s), while not necessarily continuous, existed at sufficient levels in the period of January 1 to February 15 to prevent timely filing of the reporting form.

(11) Personal property owners whose aggregate class eight market value is less than or equal to the exemption provided in 15-6-138, MCA, as defined in (4), will have no further reporting obligation, except:

(a) if the property owner acquires new personal property, the value of which brings the aggregate market value of the personal property above the exemption provided in 15-6-138, MCA, the taxpayer must notify the department and complete a personal property statement/reporting form for the applicable tax year; or

(b) if the department requests the property owner to complete a personal property statement/reporting form as required by 15-8-301, MCA, or as a result of an audit and review of taxable value authorized by 15-8-104, MCA, and ARM 42.21.159.

(12) New businesses are not required to submit a personal property statement/reporting form if the entity's business equipment is valued at less than or equal to the exemption provided in 15-6-138, MCA, unless requested by the department in accordance with (11).

(13) Industrial and commercial property taxpayers shall provide documentation of the installed costs of intangible personal property included on the taxpayer's accounting records, or provide other alternative methodologies or information regarding market value for consideration by the department.

History

Authorizing statute(s): 15-1-201, 15-9-101, MCA
Implementing statute(s): 15-1-121, 15-1-123, 15-1-303, 15-6-138, 15-6-201,15-6-202, 15-6-203, 15-6-206, 15-6-213, 15-6-215, 15-6-217, 15-6-218, 15-6-219, 15-6-220, 15-6-225, 15-6-228, 15-8-104, 15-8-301, 15-8-303, 15-8-309, 15-9-101, MCA
History: NEW, 1984 MAR p. 2036, Eff. 12/28/84; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1996 MAR p. 1174, Eff. 4/26/96; AMD, 1996 MAR p. 3151, Eff. 12/6/96; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2006 MAR p. 1962, Eff. 8/11/06; AMD, 2007 MAR p. 122, Eff. 12/22/06; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2011 MAR p. 345, Eff. 3/11/11; AMD, 2011 MAR p. 2675, Eff. 12/9/11; AMD, 2012 MAR p. 410, Eff. 2/24/12; AMD, 2013 MAR p. 2440, Eff. 12/27/13; AMD, 2015 MAR p. 2322, Eff. 1/1/16; AMD, 2019 MAR p. 209, Eff. 2/23/19; AMD, 2020 MAR p. 97, Eff. 1/18/20; AMD, 2021 MAR p. 1802, Eff. 1/1/22; AMD, 2022 MAR p. 166, Eff. 1/29/22; AMD, 2025 MAR, Notice No. 2025-443, Eff. 1/1/26.

Mont. Admin. R. 42.21.159 Property Audits and Reviews

(1) The department may conduct audits and reviews of commercial property. These audits and reviews will be performed in order to implement 15-8-104, MCA.

(2) For purposes of audits and reviews, the department may utilize information supplied by the Secretary of State, Department of Livestock, Department of Revenue, Department of Agriculture, Department of Commerce, Federal Farm Services Agency, Federal Natural Resource Conservation Service, department developed models or comparative studies, and local government entities to determine the taxable value of the property subject to taxation.

(3) The purpose of property audits and reviews is to ensure that property owners are returning correct and accurate cost data on property returns, and that all taxable property has been reported for assessment purposes.

(4) The department will seek access to the following records for purposes of conducting the audits and reviews, pursuant to 15-8-304, MCA:

(a) personal property returns on file in the department's field offices;

(b) income statements, receipts of purchase, asset listings, asset registers, asset ledgers, purchase rental program agreements, and any information in the possession of the property owner or lessee which would reflect capital asset investment costs;

(c) any depreciation schedules, age/life programs, asset life schedules, or capital asset investment recovery records in the possession of the commercial personal property taxpayer or his representative; and

(d) any other information in the possession of the department and/or property owner or lessee which is necessary in order to conduct a thorough audit or review.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-104, MCA
History: NEW, 1986 MAR p. 2067, Eff. 12/27/86; AMD, 1994 MAR p. 3195, Eff. 12/23/94; AMD, 1995 MAR p. 489, Eff. 3/31/95; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2009 MAR p. 2497, Eff. 12/25/09.

Mont. Admin. R. 42.21.160 Definitions

For purposes of this chapter the following definitions apply:

(1) "Affiliated entity" has the meaning given the term in ARM 42.21.158.

(2) "Aggregate" means the total sum of all class eight assets owned, claimed, possessed, controlled, or managed directly or indirectly through an affiliated entity by a person within the state.

(3) "Business entity" means an organization engaged in the production, manufacture, distribution, purchasing, or sale of an article of commerce. Such organizations include but are not limited to:

(a) a limited liability company treated for tax purposes as a sole proprietorship;

(b) a corporation (foreign or domestic);

(d) a profit and not-for-profit unincorporated association;

(e) a business trust;

(f) limited liability company;

(g) limited liability partnership;

(h) a small business corporation; or

(i) a partnership.

(4) "Commercial personal property" means all property, other than real property and real property improvements, which is used for the production of income.

(5) "Dealer purchase incentive rental program" is a program operated by equipment dealerships where the equipment is owned by the dealer and held for sale. The dealer is allowed to rent the equipment to a single user on a short term basis as an incentive for sale of the equipment.

(6) "Dealer lease program" is a program operated by equipment dealerships where the equipment is owned by the dealer and is leased to a consumer.

(7) "Dealer rental program" is a program operated by equipment dealerships where equipment is owned by the dealer, held for rent to consumers and is depreciated as an asset.

(8) "Dealer sales program" is a typical sales program where equipment is owned by the dealer and held for sale.

(9) "Family member," as used in ARM 42.21.158, means spouse or minor child.

(10) "Individual" has the meaning given to the term "person" as found in ARM 42.2.304.

(11) "Levy district" means a geographically distinct area where the same mill levies apply to all of the properties.

(12) "Taxing jurisdiction" means a governmental subdivision with the authority to tax.

(13) "Taxable supplies" include all tangible materials used or consumed in a business except those tangible materials which are held by a taxpayer as his stock-in-trade for sale in the ordinary course of business. Taxable supplies do not include raw materials that are part of the final product. Examples of taxable supplies include, but are not limited to:

(a) fuel used in operations;

(b) parts held for repair of machinery; and

History

Authorizing statute(s): 15-1-201, 15-9-101, MCA
Implementing statute(s): 15-1-121, 15-6-137, 15-6-138, 15-8-104, MCA
History: NEW, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2011 MAR p. 2675, Eff. 12/9/11; AMD, 2017 MAR p. 1672, Eff. 9/23/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18.

Mont. Admin. R. 42.21.161 Personal Property Taxable Situs

(1) The taxable situs for personal property shall be the levy district in which it is located on January 1 of the year of assessment.

(a) If taxable personal property is moved from one county to another and the county in which it is located on January 1 fails to assess the property, the county to which the property moves may assess the property for the entire year.

(2) If property enters the state after January 1, the taxable situs of the property shall be the levy district wherein the property comes to rest and becomes a part of the general property of the levy district.

(a) If the property is required to be immediately licensed, the taxable situs shall be the levy district wherein licensure is required.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-402, 15-8-404, 15-8-408, 15-8-409, MCA
History: NEW, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1991 MAR p. 915, Eff. 6/14/91; AMD, 2000 MAR p. 3563, Eff. 12/22/00.

Mont. Admin. R. 42.21.162 Personal Property Taxation Dates

(1) In compliance with 15-8-201 and 15-8-301, MCA, all personal property subject to taxation shall be taxed to the owner or person in control or possession of the property as of midnight on January 1 of each tax year provided the personal property is not in an exempt status.

(2) In all cases in which an application for personal property tax is required by law, the application for exemption must be filed before March 1 of the year for which the exemption is sought. If the applicant acquires the personal property after January 1, they must submit an application for exemption:

(a) by March 1; or

(b) within 30 days of acquisition of a motor vehicle.

(3) If the property has taxable situs in Montana on January 1 and the taxpayer is being assessed for the first time for the property, the application for exemption is due upon the later of March 1 or 30 days after acquisition of the property.

(4) The deadline may be extended by the local department field office for good cause.

(5) For personal property situated within the state of Montana on January 1, the exempt and nonexempt status of personal property is as follows:

(a) If personal property is in an exempt status on January 1 of a specific tax year, and at any later date during that tax year loses its exempt status, the personal property will not be taxed until the following tax year.

(b) If the personal property is not in an exempt status on January 1 of a tax year, and at any later date during that tax year is assigned an exempt status, the personal property will be taxed for the entire tax year, unless the personal property is acquired by a governmental entity.

(6) Personal property acquired during the year by a governmental entity as defined in 15-6-201, MCA, is exempt on proof of ownership. This property remains exempt for the remainder of the year from the date of acquisition by the governmental entity.

(a) If the taxes are paid for the year, the owner, as of January 1, may apply for a refund of taxes for the portion of the year the property is in government ownership.

(b) If the taxes are not paid, the assessment and taxes will be prorated.

(c) Applications for refund must be submitted to the county commissioners office of the county in which the tax is paid. The application must comply with the requirements of 15-16-603, MCA.

(7) For personal property situated outside the state of Montana on January 1, the exempt and nonexempt status of personal property is as follows:

(a) If personal property is in an exempt status when it is brought into the state of Montana during a tax year, and if at any later date during that tax year the personal property loses its exempt status, the personal property will not be taxed until the following tax year.

(b) If personal property is not in an exempt status when it is brought into the state of Montana, the department will prorate the taxes on the personal property pursuant to 15-16-613, 15-24-301, and 15-24-303, MCA.

History

Authorizing statute(s): 15-1-201, 15-8-301, MCA
Implementing statute(s): 15-6-201, 15-6-202, 15-6-229, 15-6-230, 15-8-201, 15-8-301, 15-16-613, 15-24-301, 15-24-303, MCA
History: NEW, 1986 MAR p. 2068, Eff. 12/27/86; AMD, 1994 MAR p. 685, Eff. 4/1/94; AMD, 1999 MAR p. 2909, Eff. 12/17/99; AMD, 2000 MAR p. 3563, Eff. 12/22/00; AMD, 2006 MAR p. 3108, Eff. 12/22/06; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2013 MAR p. 2440, Eff. 12/27/13; AMD, 2015 MAR p. 2322, Eff. 1/1/16; AMD, 2022 MAR p. 166, Eff. 1/29/22.

Mont. Admin. R. 42.21.163 Personal Property Tax Refund

(1) A person removing personal property, except motor vehicles under Title 61, MCA, from the state before the end of the calendar year of assessment may apply for a refund of property tax paid. Application must be made with the county commissioners of the county where the property was assessed.

(2) The application must contain:

(a) the name and current mailing address of the applicant;

(b) a complete description of the personal property;

(d) the date the personal property was removed from the state;

(e) the location of the personal property upon removal from the state; and

(f) proof that a property tax was paid on the personal property in another state, such as a verified paid property tax receipt.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-16-613, MCA
History: NEW, 1991 MAR p. 2043, Eff. 11/1/91; AMD, 1993 MAR p. 2972, Eff. 12/10/93; AMD, 2001 MAR p. 2249, Eff. 11/9/01.

Mont. Admin. R. 42.21.164 Request for Review

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1991 MAR p. 2043, Eff. 11/1/91; REP, 1993 MAR p. 2972, Eff. 12/10/93.

Mont. Admin. R. 42.21.165 Livestock Reporting and Per Capita Fee Payment

(1) A livestock owner or the livestock owner's agent must submit a livestock reporting form, electronically or in writing, to the department no later than March 1 annually.

(2) The reporting form required in (1) must list the livestock type and count, by county, where livestock are located on February 1. For all poultry and honey bees, swine 3 months of age or older, and all other livestock 9 months of age or older, the livestock owner/producer shall report the number of animals within each of the following established categories:

(a) horses, mules, and asses (ponies, donkeys, burros);

(b) cattle (heifer and steer calves 9 months and older, yearlings, cows, and bulls);

(d) sheep;

(e) swine;

(f) goats;

(g) poultry (chickens, turkeys, geese, ducks, and other domestic birds raised as food or to produce feathers);

(h) honey bee hives;

(i) alternative livestock (privately owned caribou, mule deer, whitetail deer, elk, moose, antelope, mountain sheep, mountain goats indigenous to Montana);

(j) ostriches, emus, and rheas; and

(k) llamas and alpacas.

(3) Livestock owners that bring livestock into the state after February 1 of the current year are required to complete and submit a livestock reporting form to the department by March 1 of the following year.

(4) If a livestock owner fails to submit a completed livestock reporting form by the March 1 deadline, the department shall use the owner's reported or estimated livestock counts from the previous year to estimate the livestock type and count for the current year.

(5) Per capita livestock fee payments are due to the department by March 1 of the reporting year. Livestock owners may be entitled to a per capita fee refund from the Montana Department of Livestock (DOL), under the provisions of 15-24-922, MCA, for livestock located out of the state during the reported tax year.

(6) The department provides DOL with livestock reporting and billing/payment data for compliance purposes. If DOL determines that a livestock owner has not been reporting their livestock counts to the department as required, DOL may provide the department with estimated livestock type and counts and the department will use this information to bill the livestock owner for the per capita livestock fees.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-24-903, 15-24-905, 15-24-921, 15-24-922, 15-24-925, 87-4-406, MCA
History: NEW, 2011 MAR p. 345, Eff. 3/11/11; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2322, Eff. 1/1/16; AMD, 2017 MAR p. 1672, Eff. 9/23/17; AMD, 2019 MAR p. 2059, Eff. 11/9/19; AMD, 2024 MAR p. 477, Eff. 3/9/24.

Authorizing statute(s): Sec. 15-30-305, MCA
Implementing statute(s): Sec. 15-6-135, MCA
History: NEW, 1990 MAR p. 233, Eff. 1/26/90; REP, 1997 MAR p. 2297, Eff. 12/16/97.

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-6-202, MCA
History: Eff. 12/31/72; REP, 1983 MAR p. 1266, Eff. 9/16/83.

Chapter 42.22 Centrally Assessed Property

Subchapter 42.22.1 Centrally Assessed Companies

Mont. Admin. R. 42.22.101 Definitions

The following definitions apply to this chapter:

(1) "Airline" means a company engaged in scheduled air commerce.

(2) "Allocation" is the term used to describe the assignment of a part of the unit valuation to Montana.

(3) "Apportionment" is the term used to describe the assignment of an allocated valuation to the proper taxing jurisdiction in this state.

(4) "Beneficial use" as it relates to electric energy producers is defined as the use of tax exempt power transmission lines having a capacity of at least 500 kv. for bulk power transfers.

(5) "Book depreciation" shall be determined by the department by using information that most accurately reflects the depreciation cost of the Montana property being assessed. This information may be gathered from documentation such as regulatory filings, independently audited financial statements, or other reliable and recognized sources.

(6) "Bulk power transfers" means transfers made by taxable electrical energy producers.

(7) "Correlate" as used in the unit method of valuation, is the blending of the indicator(s) of value that are available to the appraiser into one unit value with no specific weight applied to any indicator.

(8) "Depreciation," when used in the unit method of valuation, shall represent a reduction in value of a property as a result of physical deterioration. In addition it may represent an increase or decrease in value resulting from economic conditions or changes in utility.

(9) "Equivalent car count" is equal to the total number of miles a railcar travels in Montana annually, divided by the product of Montana miles per day, multiplied by the number of days in a year.

(10) "Installed cost" is the original cost of operating property adjusted for any additions, changes, transfers, retirements, etc., excluding depreciation.

(11) "Market value" is the exchange value of a property in a competitive market.

(12) "Montana miles per day" equals the following for tax year 2004 and subsequent tax years:

(a) for flat, box, gondola, and coal gondola railcars, when reported by specific railcar type, 450 miles;

(b) for all other railcars, 250 miles; or

(13) "New aircraft" means aircraft manufactured in the preceding calendar year, or aircraft which have not been previously registered except by the manufacturer of the aircraft.

(14) "Nonoperating property" is all property owned or leased from others which is not a necessary part of a centrally assessed company's intercounty or interstate business.

(15) "Operating property" is all real and personal property, owned, leased, or used, which is reasonable and necessary to the maintenance and operation of a centrally assessed company's interstate or inter-county business.

(16) "Other associated property" includes appurtenant land and improvements and personal property that are normally operated together to produce electric power as defined in the code of federal regulations as published in Title 18, CFR, Ch. 1 (4-1-99), pt. 1.

(17) "Property leased from others" is property leased by a centrally assessed company and used in the interstate or inter-county business operations.

(18) "Property leased to others" is property owned by a centrally assessed company which is leased out.

(19) "Related services" for property tax purposes, means the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing or making available information via telecommunications through, but not limited to operator and information services, directory assistance, call waiting, call forwarding, caller ID, call rejection, last call return, priority call, speed calling, three-way calling, voice messaging, continuous redial, and line blocking.

(20) "Right-of-way" shall be the land beneath and adjacent to a continuous property which is needed for safe passage and maintenance of the property.

(21) "Rolling stock" includes but is not limited to all locomotives, passenger cars, dining cars, express cars, mail cars, baggage cars, grain cars, box cars, cattle cars, coal cars, flat cars, wrecking cars, special purpose cars, track repair, and construction cars, and all other cars used by a railroad or railroad car company.

(22) "Situs property for a centrally assessed company," other than a railroad, is operating property that is not part of a transmission or distribution system, rolling stock or airplanes, or by nature is immovable.

(a) Situs property includes but is not limited to:

(i) buildings;

(ii) dams;

(iii) powerhouses;

(iv) depots;

(v) stations;

(vi) shops;

(vii) furniture;

(viii) fixtures;

(ix) tools;

(x) substations;

(xi) electronic switching equipment;

(xii) machinery;

(xiii) meters;

(xiv) transformers; and

(xv) operating lands not in the right-of-way.

(b) Situs property does not include:

(i) automobiles;

(ii) trucks; and

(iii) special mobile equipment (as defined in 61-1-104, MCA) upon which property taxes or fees in lieu of property tax have been assessed and paid.

(23) "Situs property for a centrally assessed railroad" is all operating property used by the railroad that is by its nature located at a specific site, not part of the roadway, track structure, rails, roadbed or right-of-way, not rolling stock, and not signals or signal systems, such as computerized traffic control, and computerized traffic control (CTC) buildings.

(a) By way of illustration but not limitation, situs property of a railroad includes:

(i) all operating land located outside the right-of-way;

(ii) depots, stations, microwave and radio sites and towers;

(iii) telecommunications equipment not specifically excluded;

(iv) all shops and buildings not specifically identified elsewhere;

(v) permanent fixed improvements, such as parking lots and parking structures, and all associated costs of grading and improvements at the location;

(vi) construction work in progress associated with situs property; and

(vii) furniture and fixtures, materials and supplies, and machinery and equipment which are not moved or movable in the ordinary course of railroad operations.

(b) By way of illustration but not limitation, situs property of a railroad does not include:

(i) railroad signaling and switching structures, equipment, and devices;

(ii) ballast, grading, and construction work in progress associated with the track or roadbed;

(iii) machinery and equipment normally used to repair track; and

(iv) automobiles, trucks, and special mobile equipment (as defined in 61-1-104, MCA) upon which property taxes or fees in lieu of property tax have been assessed and paid.

(c) Situs property for a railroad normally consists of property in the following accounts in Schedules 330 and 200 of the Annual Report R1 to the surface transportation board:

(i) Schedule 330

Line No. Account No.

11 16 station and office buildings

12 17 roadway buildings

13 18 water station

14 19 fuel stations

15 20 shops and engine houses

16 22 storage warehouses

17 23 wharves and docks

18 24 coal and ore wharves

19 25 tofc/cofc terminals

22 29 power plants

24 35 miscellaneous structures

27 44 shop machinery

28 45 power plant machinery

38 59 comp. systems and word proc. equipment

(ii) Schedule 200

Line No. Account No.

12 712 materials and supplies

(d) Situs property for a railroad normally consists of a portion of the property in the following accounts in Schedule 330 of the Annual Report R1 to the surface transportation board:

(i) Schedule 330

Line No. Account No.

1 2 land for transportation purposes

2 3 grading

10 13 fences, snowsheds, and signs

20 26 communication systems

23 31 power-transmission systems

25 37 roadway machines

26 39 public improvements-construction

29 other

37 58 miscellaneous equipment

42 90 construction work in progress

(24) "Speed" means the Montana miles per day.

(25) "Speed study" means a statistically valid sampling of railcar movement in Montana designed to establish the average number of miles that a railcar company's railcars travel in Montana per day for tax year 2004 and subsequent tax years.

(26) "Taxable period" refers to the entire period of the immediate preceding calendar year. All operations of a centrally assessed company during a taxable period are assessed during the immediate following calendar year.

(27) "Taxing units" are counties, municipalities, school districts, and other special districts.

(28) "Telecommunications" means the transmission of information between or among points specified by the user.

(29) "Telecommunications service provider" means a telecommunication services company or a person providing retail telecommunication services as provided in 15-53-129, MCA.

(30) "Unit method of valuation" is a method for determining the market value of a centrally assessed company. This involves appraising, as a going concern and as a single entity, the entire unit, wherever located, then deducting the intangible personal property value and then ascertaining the part thereof in this state. The resulting value is referred to as the state allocated value.

(31) "Unit or system value" is the value of all tangible and intangible property that is reasonable and necessary to the maintenance and operation of a centrally assessed company's interstate or inter-county business.

(32) "Unit valuation or centrally assessed appraiser" means a person who has completed the necessary training and is certified to appraise centrally assessed properties in Montana.

(33) "Wire miles" means, but is not limited to, route miles or fiber miles.

History

Authorizing statute(s): 15-23-108, 15-53-155, MCA
Implementing statute(s): 15-6-135, 15-6-137, 15-6-141, 15-6-156, 15-6-157, 15-6-158, 15-6-159, 15-23-101, 15-23-211, 15-23-213, MCA
History: NEW, Eff. 12/4/76; AMD, 1980 MAR p. 1091, Eff. 3/28/80; AMD, 1983 MAR p. 1930, Eff. 12/30/83; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1988 MAR p. 752, Eff. 4/15/88; AMD, 1992 MAR p. 2787, Eff. 12/25/92; AMD, 1993 MAR p. 435, Eff. 3/26/93; AMD, 1993 MAR p. 3061, Eff. 12/24/93; AMD, 1996 MAR p. 3153, Eff. 12/6/96; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 565, Eff. 3/28/03; AMD, 2010 MAR p. 2221, Eff. 9/24/10; AMD, 2010 MAR p. 2993, Eff. 12/24/10; AMD, 2014 MAR p. 2175, Eff. 9/19/14; AMD, 2015 MAR p. 2149, Eff. 12/11/15.

Mont. Admin. R. 42.22.102 Centrally Assessed Property

(1) The department shall centrally assess the interstate and inter-county continuous properties of the following types of companies:

(a) railroad;

(b) railroad car;

(d) telecommunications;

(e) telephone cooperatives;

(f) gas;

(g) electric;

(h) electric cooperatives;

(i) ditch;

(j) canal;

(k) flume;

(l) natural gas pipeline;

(m) oil pipeline; and

(n) airline.

(2) The property of a centrally assessed company is separated into two categories: operating and nonoperating. All operating property will be apportioned to the taxing units as provided in ARM 42.22.121 and 42.22.122.

(3) The department will determine centrally assessed property based on the property's operating characteristics such as but not limited to property use, integration of operations, management, and corporate structure.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): Title 15, chapter 23, part 1, 15-23-211, MCA
History: NEW, Eff. 12/4/76; AMD, 1980 MAR p. 1091, Eff. 3/28/80; AMD, 1993 MAR p. 435, Eff. 3/26/93; AMD, 1993 MAR p. 3061, Eff. 12/24/93; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.103 Determination of Operating and Nonoperating Property

(1) To determine if a property is operating property, the department shall consider the use to which the property is put.

(2) Right-of-way or station grounds leased to others, except land leased to others for public grain elevator sites, cultivation, pasturage, public roads, parks, pole lines, pipelines, and microwave sites, will be considered nonoperating property and must be reported to the department by March 1 of each year.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): Title 15, chapter 23, part 1, MCA
History: NEW, Eff. 12/4/76; AMD, 1980 MAR p. 1091, Eff. 3/28/80; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.104 Treatment of Motor Vehicles and Special Mobile Equipment

(1) Special mobile equipment excluded from the definition of situs property as defined in ARM 42.22.101 is to be locally assessed.

(2) Motor vehicles with or without equipment attached are exempt and shall pay a fee in lieu of tax, 61-3-321 and 61-3-529, MCA.

(3) Each centrally assessed company having equipment defined in (1) shall provide the department with a statement showing a description and the total market value for each piece of equipment. The market value shall be the value shown on the special mobile equipment registration, or other tax payment receipt.

(4) Companies that license fleet vehicles with the Montana Motor Carrier Services (MCS) division will provide the net book value for each vehicle licensed by the MCS. This statement is to be filed at the same time the report required by ARM 42.22.105 is filed.

(5) Each centrally assessed company having equipment defined in (2), (3), or (4) shall provide the department with the net book value for each piece of equipment as of January 1 each year. Companies with prorated vehicles shall provide the department with the total number of miles traveled in and out of the state of Montana, a description and the net book value for each vehicle.

(6) The department may, at any time, ask for verification of the reported equipment's registration from the county, other agencies, other states or the company. This verification may be, but is not limited to, supplying the department with copies of each vehicle's Montana registration form. Omission of any requested information may result in loss of or a partial deduction for the equipment.

(7) The total net book value for equipment defined in (2), (3), and (4) shall be deducted on a market-to-cost basis from the state-allocated value, as defined in ARM 42.22.111. The market-to-book ratio shall be determined by dividing the system or unit market value by the system net book value.

(8) The total market value for equipment defined in (1) is deducted from the state allocated value, as defined in ARM 42.22.111, to determine the amount of the state allocated value to be allocated under the provisions of ARM 42.22.122.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 61-3-321, 61-3-529, MCA
History: NEW, 1980 MAR p. 1091, Eff. 3/28/80; AMD, 1991 MAR p. 2046, Eff. 11/1/91; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2002 MAR p. 99, Eff. 1/18/02; AMD, 2015 MAR p. 2149, Eff. 12/11/15.

Mont. Admin. R. 42.22.105 Reporting Requirements

(1) The valuation and reporting schedule for centrally assessed companies is as follows:

Annual appraisal | Odd-year appraisal | Even-year appraisal Railroad property | Telegraph, telephone, microwave | Electric power or transmission lines Net proceeds of mines (except bentonite) | Telecommunications services companies | Natural gas distribution lines Gross proceeds of coal mines | PSC or FERC-regulated natural gas transmission or oil transmission pipelines | Scheduled airlines Beneficial user of tax-exempt property | Common carrier pipelines | Centrally assessed property that is not otherwise included in 15-23-101(2)(a) or (2)(b), MCA | Gas gathering facilities identified in 15-6-138(5), MCA | | Dedicated communications infrastructure defined in 15-6-162(5), MCA |

(2) If a centrally assessed company owns assets that would otherwise require valuations in consecutive years, and the assets are components of a larger valuation unit, the appropriate reporting and valuation schedule will be based on the category that is most representative of the company's overall interstate or inter-county business. For example, if a centrally assessed company's valuation unit consists of electric utility assets (even-year) and microwave assets (odd-year), and that company's interstate business is electric power, those assets comprising its valuation unit will be valued in even-years.

(3) In the year a centrally assessed company is scheduled to be valued, the company must submit to the department a Centrally Assessed Property Report (Report) for the preceding year, as described in (8), and by the due date established for each company type in 15-23-103, MCA. All Reports must be submitted to the department's Centrally Assessed Property Unit only.

(4) In accordance with 15-23-103, MCA, and for good cause, the department may grant a centrally assessed company an extension of up to 30 days to submit a Report.

(a) Report due date extension requests must:

(i) be in writing;

(ii) establish the company's good cause for the delay in reporting. For purposes of this rule, "good cause" means the same as "reasonable cause" provided in ARM 42.2.512;

(iii) specify the amount of additional time requested up to 30 days; and

(iv) be submitted to the department no less than 30 days before a Report is due.

(5) The department will approve or deny a Report due date extension request within 15 days of receipt and will notify the company, in writing. If the department does not respond within 15 days, the extension request is deemed approved.

(6) If the department determines that a company meets the criteria for central assessment, that company must discontinue its prior filing of business property reporting and must comply with the requirements of (3).

(7) If a company believes that the department has improperly determined that it is subject to central assessment, the company must still file a Report until the central assessment determination is changed by the department, the Montana Tax Appeal Board, or the court.

(8) A Report must contain the following information and/or documents on the operating properties:

(a) a balance sheet for the unit;

(b) a statement of income for the unit;

(d) a statement of original cost and book depreciation for the unit’s property, including an estimate of current value of property leased from others;

(e) a statement of outstanding preferred stock, common stock, and debt, showing both book value and market value;

(f) a statement of actual revenue and expense for the Montana operation (if actual amounts are not available, a statement of allocated revenue and expense may be substituted);

(g) if nonoperating properties are included in (3)(a) through (e), a statement of their original cost, book depreciation, market value, and income;

(h) a statement of general description, original cost, and book depreciation of Montana properties, including description and location of property leased from others, together with name of lessor, current value or annual rental, and responsibility for the property tax (lessor or lessee);

(i) if rolling stock is allocated to Montana, a statement of the method used;

(j) pertinent statistical data on the company's operations within and without this state;

(k) a copy of the annual report to stockholders;

(l) a copy of the annual report to the federal regulatory agency if one is filed;

(m) a copy of the annual report to the Montana Public Service Commission if one is filed;

(n) in the case of centrally assessed railroads, all information required under ARM 42.22.106;

(o) in the case of centrally assessed electric utilities, all information required under ARM 42.22.107, if applicable;

(p) all other information requested by the department which will assist in valuing the properties; and

(q) a signed statement of correctness.

(9) In addition to submitting the required Report, each centrally assessed company must update situs and mileage statements and submit them with the Report. The information on the situs and mileage statements shall be reported by county and taxing units in which they are situated. The situs statements shall contain a general description and installed cost for operating situs property.

(10) A company's failure to file a Report or filing an incomplete Report may result in the department appraising the company using the best information available, and will subject the company to the penalties specified in 15-23-104, MCA.

History

Authorizing statute(s): 15-1-201, 15-23-108, MCA
Implementing statute(s): 15-23-103, 15-23-204, 15-23-212, 15-23-301, 15-23-402, MCA
History: NEW, Eff. 12/4/76; AMD, 1980 MAR p. 1011, Eff. 3/28/80; AMD, 1982 MAR p. 705, Eff. 4/16/82; AMD, 1983 MAR p. 1930, Eff. 12/30/83; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1989 MAR p. 760, Eff. 6/16/89; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 435, Eff. 3/26/93; AMD, 2000 MAR p. 872, Eff. 3/31/00; AMD, 2010 MAR p. 2993, Eff. 12/24/10; AMD, 2015 MAR p. 2149, Eff. 12/11/15; AMD, Notice No. 2025-5, Eff. 3/29/25.

Mont. Admin. R. 42.22.106 Additional Reporting Requirements for Centrally Assessed Railroads

(1) Each year all centrally assessed railroads shall submit by April 15 (except that information required under ARM 42.22.103) a report of operations for the preceding year containing, in addition to that information required by ARM 42.22.105, the following information and items:

(a) copies of all Montana valuation maps;

(b) copies of all Montana track charts;

(d) a statement of all agreements authorizing the longitudinal use of Montana right-of-way, including for each agreement the names of the parties to the agreement, a summary of its terms, the amounts paid thereunder, the longitudinal use contemplated, and the location and length of right-of-way covered;

(e) total miles traveled by each type of car for each railroad car company operating on track owned or used by the railroad in the state of Montana, and any additional information that may be required by the department for the valuation and allocation of the railroad car companies.

(2) Information which is of a static nature need not be resubmitted on an annual basis as specified in (1) . Each railroad shall have a continuing obligation to provide updated information whenever static information is changed, amended, revised, rescinded, or revoked.

(3) This rule shall be effective for all reporting years ending December 31, 1981, and thereafter.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-201, MCA
History: NEW, 1982 MAR p. 705, Eff. 4/16/82; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 435, Eff. 3/26/93; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.107 Additional Reporting Requirements for Beneficial Use of Government-Owned Transmission Lines

(1) Qualifying companies shall provide to the department information on any possession or beneficial use of government-owned transmission lines, as referenced in 15-23-101 and 15-24-1207, MCA, during the preceding calendar year. The company must provide the following:

(a) the name and address of the person, association, or corporation;

(b) the location of the (tax-exempt property) transmission lines;

(d) copies of all charges from the Bonneville Power Administration for bulk power transfers;

(e) copies of contracts with the Bonneville Power Administration for use of the line;

(f) any other information requested by the department which will assist in valuing the government owned electric transmission lines.

(2) If a centrally assessed company's possession or beneficial use of government-owned transmission lines is captured in the department's unit valuation of the company, this additional information must be submitted by March 31 of the year the unit is being valued.

History

Authorizing statute(s): 15-1-201, 15-24-1207, MCA
Implementing statute(s): 15-24-1207, MCA
History: NEW, 1983 MAR p. 1930, Eff. 12/30/83; AMD, 2015 MAR p. 2149, Eff. 12/11/15; AMD, Notice No. 2025-5, Eff. 3/29/25.

Mont. Admin. R. 42.22.108 Market Value of Air and Water Pollution Control and Carbon Capture Equipment

(1) The market value of approved class five air and water pollution control and carbon capture equipment shall be determined by multiplying the depreciated value of the approved class five pollution control equipment in Montana by a market-to-book ratio. The market-to-book ratio shall be determined by dividing the system or unit market value by the system net book value. This value shall then be deducted from the Montana value and certified to the counties as class five property.

(2) This methodology shall be effective for all reporting years ending December 31, 1988, and thereafter.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-6-135, MCA
History: NEW, 1989 MAR p. 760, Eff. 6/16/89; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2015 MAR p. 2149, Eff. 12/11/15.

Mont. Admin. R. 42.22.109 Adoption of Appraisal Methods and Appraisal Standards

(1) The department adopts the 2009 WSATA-CCAP (Western States Association of Tax Administrators - Committee on Centrally Assessed Properties) appraisal handbook, published in August 2009, available at wsata-ccap.org, as the reference and overall appraisal guide for conducting unit valuations of centrally assessed properties in Montana.

(2) The department adopts the NCUVS (National Conference of Unit Valuation States) standards, published in October 2005, available at www.NCUVS.org , link to "standards," as standards when conducting unit valuations of centrally assessed properties.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-101, 15-8-111, MCA
History: NEW, 2010 MAR p. 2993, Eff. 12/24/10; AMD, 2015 MAR p. 2149, Eff. 12/11/15.

Mont. Admin. R. 42.22.110 Deductions for Intangible Personal Property

(1) Cost, income, and market indicators can generally be expected to include the value of intangible personal property. To the extent that each unit valuation indicator includes the value of intangible personal property it shall not be relied upon unless such value of the intangible personal property is excluded or removed.

(2) The department recognizes that the following percentages may not necessarily provide a taxpayer-specific measurement of intangible personal property. However, accurately quantifying the value of intangible personal property is difficult and subject to controversy and litigation which would not clarify the issues for future appraisals. The percentages are a good faith effort to comply with the rulemaking requirements of 15-6-218, MCA, in a manner that is timely and efficient for both the taxpayers and the department.

(a) Subject to the provisions of (3), intangible personal property shall be removed from the cost indicator by using the following percentages:

(i) Airlines 10%

(ii) Pipelines 5%

(iii) Electric cooperatives 5%

(iv) Telephone cooperatives 5%

(v) Electric utilities 10%

(vi) Telecommunications 15%

(b) Subject to the provisions of (3), intangible personal property shall be removed from the income indicator by using the following percentages:

(i) Airlines 10%

(ii) Pipelines 5%

(iii) Electric cooperatives 5%

(iv) Telephone cooperatives 5%

(v) Electric utilities 10%

(vi) Telecommunications 15%

(c) Subject to the provisions of (3), intangible personal property shall be removed from the market indicator by using the following percentages:

(i) Airlines 10%

(ii) Pipelines 5%

(iii) Electric cooperatives 5%

(iv) Telephone cooperatives 5%

(v) Electric utilities 10%

(vi) Telecommunications 15%

(d) For railroads assessed according to the provisions of 15-23-205, MCA, exempt intangible personal property, which shall be deducted from the railroad system value, is equal to 5 percent of the system value. If a railroad is not assessed pursuant to 15-23-205, MCA, but assessed using cost, income and market indicators to value, 5 percent of the value determined by each indicator shall be removed to reflect the value of intangible personal property in each indicator subject to the provisions of (3).

(3) If any taxpayer believes that the value of its intangible personal property is greater than that allowed under (2), the taxpayer may propose alternative methodology or information at any time during the appraisal process and the department will give it full and fair consideration. If the department concludes that the value of intangible personal property is greater than that allowed in (2), the unit value will be decreased accordingly. In no event, however, will the value of intangible personal property be less than that allowed in (2).

(4) A taxpayer may, at any time, make recommendations to the department, regarding the percentages in (2)(a), (b), or (c).

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-6-218, 15-23-205, 15-23-303, MCA
History: NEW, 2000 MAR p. 872, Eff. 3/31/00; AMD, 2010 MAR p. 2993, Eff. 12/24/10; AMD, 2014 MAR p. 2175, Eff. 9/19/14.

Mont. Admin. R. 42.22.111 Valuation Method

(1) The unit method of valuation will be used to appraise centrally assessed companies whenever appropriate. When applying this method, the department will use commonly accepted methods and techniques of appraisal to determine market value. The application of the unit method may include a cost indicator, capitalized income indicator, and a market indicator of value when sufficient information is available. If the department determines that an individual indicator, the unit method of valuation or other method of valuation does not reflect a company's market value or that information is unavailable, it may adopt a different method or methods of valuation, including but not limited to net scrap, net salvage, corridor value in the case of railroads, comparative market sales, or any combination of methods of valuation which reflect the company's market value.

(2) When the unit method of valuation is used with multiple indices of value, they will be combined into one (system or unit) value. Combining of the indices shall require the department to review all available information including:

(a) reliability of the cost data;

(b) sufficiency of the depreciation allowed;

(d) quality of the income to be capitalized;

(e) level of income to be capitalized;

(f) accuracy of information used to set a capitalization rate;

(g) accounting principles used to report data from which the valuation is made;

(h) fluctuations in the stock market;

(i) methods used by other taxing authorities; and

(j) all other pertinent information.

(3) After examination of the above information the department shall correlate the indices into one system or unit value.

(4) Railroad transportation property in 15-6-145, MCA, are assessed based on the valuation formula described in 15-23-205, MCA.

(5) The valuation determined appropriate by the department shall be supported by a written explanation per 15-1-210, MCA.

(6) This rule shall be effective for all reporting years ending December 31, 1999, and thereafter.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-1-210, 15-8-111, MCA
History: NEW, Eff. 12/4/76; AMD, 1982 MAR p. 705, Eff. 4/16/82; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2015 MAR p. 2149, Eff. 12/11/15.

Mont. Admin. R. 42.22.112 Cost Indicator

(1) The cost indicator of value shall be derived from information contained in the company's report to the department, report to a regulatory agency, property descriptions submitted to the department, and any other reliable source of information. This includes properties both within and without the state.

(2) The type of cost used may be one of the following:

(a) replacement;

(b) replacement less depreciation;

(d) reproduction less depreciation;

(e) historical;

(f) historical less depreciation;

(g) original; and

(h) original less depreciation.

(3) The choice of cost shall depend upon which type best reflects market value of the property at the time of valuation. For taxable periods ending on or beginning after December 31, 1985, the cost indicator for railroads, airlines, and other federally protected taxpayers shall be treated consistent with federal law.

(4) Newly acquired aircraft which are purchased or acquired under a capitalized lease or operating lease by a scheduled airline company operating within this state, whose allocation of value within this state as determined by the procedures described in ARM 42.22.121 is 50 percent or more, and newly acquired equipment which is purchased by the airline for the direct and sole purpose of supporting these new aircraft shall be valued according to the following schedule.

Year of acquisition: 28% of full and true value

First year after acquisition: 36% of full and true value

Second year after acquisition: 44% of full and true value

Third year after acquisition: 52% of full and true value

Fourth year after acquisition: 60% of full and true value

Fifth year after acquisition: 68% of full and true value

Sixth year after acquisition: 76% of full and true value

Seventh year after acquisition: 84% of full and true value

Eighth year after acquisition: 92% of full and true value

All succeeding years: 100% of full and true value

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-403, MCA
History: NEW, Eff. 12/4/76; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1985 MAR p. 2034, Eff. 12/27/85; AMD, 1988 MAR p. 752, Eff. 4/15/88; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.113 Market Indicator

(1) A market, or stock and debt indicator, of value may be derived from the company's outstanding securities and liabilities. The department may also construct a market indicator using sales comparison data for similar properties, or any analysis, study, database, or methodology which contains or generates market values or estimates of market values for similar properties.

(2) The department shall consider the market value of the company's preferred and common stocks, and outstanding debt. The sum of these items represent an indicator of market value for all the company's property. When the sum includes nonoperating property, the department will deduct the market value of the nonoperating property.

(3) If a company's stock is not traded in the market place, the department may use a price earnings ratio from similar companies or other appropriate methods.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): Title 15, chapter 12, part 1, MCA
History: NEW, Eff. 12/4/76; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.114 Income Indicator

(1) The income indicator may be determined by consideration of one or more of the following methods depending on the department's analysis of the future earning capacity of the company:

(a) capitalization of the company's historic income or average of historic incomes;

(b) capitalization of a projected level of income;

(d) other accepted method.

(2) The capitalization rate utilized will be determined by the band of investment theory or other accepted methodology.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-101, MCA
History: NEW, Eff. 12/4/76; AMD, 1984 MAR p. 2041, Eff. 12/28/84.

Mont. Admin. R. 42.22.115 Notification

(1) On or before June 1 each year the department shall notify the centrally assessed companies of the appraisal report of their Montana properties.

(2) If additional time is needed for filing reports or preparing for hearings, the department must receive the request prior to the due date if the extension request is to be considered.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-102, 15-23-403, MCA
History: NEW, Eff. 12/4/76; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2002 MAR p. 3048, Eff. 11/1/02.

Mont. Admin. R. 42.22.116 Determination of Tax Rate for Class Twelve Property

(1) To implement the statutory direction to compute an annualized tax rate for class twelve property, the department will employ the procedure outlined in this rule.

(2) The department will obtain the market and taxable value for all commercial, industrial and centrally assessed property from the department's computer data bases or other sources as necessary. A copy of this information is available to taxpayers upon request.

(3) Upon obtaining the information referred to in (2) , the department will proceed to compute the tax rate reflected in 15-6-145, MCA. It will employ the mathematical formula reflected in the statute.

(4) In the event that the required information is not available to the department, the taxable value for all commercial, industrial or centrally assessed property will be estimated.

(a) The department will use the reported market and taxable value for all commercial, industrial and centrally assessed property for the previous tax year in estimating the total market value and apply the current taxable percentage to arrive at the current taxable value of all commercial, industrial and centrally assessed property for the present tax year.

(b) This estimation may be challenged by the taxpayer in the event of litigation or in the event of an assessment appeal.

(c) If the department should estimate the class twelve tax rate pursuant to (4) (a) , the department shall review the estimated tax rate by comparing it with the actual class twelve tax rate to be computed by the department no later than September 1 of the present year. If the actual tax rate varies from the estimated tax rate by more than 5%, the department shall issue revised assessments to the affected property taxpayers pursuant to 15-8-601, MCA.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-145, MCA
History: NEW, 1985 MAR p. 2034, Eff. 12/27/85; AMD, 1991 MAR p. 1953, Eff. 10/18/91; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1996 MAR p. 3153, Eff. 12/6/96; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.117 Methodology for Preparation of Sales Assessment Ratio Study

(1) In order to implement the statutory direction to prepare an annualized sales assessment ratio study of all commercial and industrial real property and improvements, each January 1, the department will employ the following methodology.

(2) The department will endeavor to follow the sales assessment ratio study principles set forth in a document en-titled Sales Assessment Ratio Study Preparation published by the international association of assessing officers. In the event that that publication is insufficient for purposes of the ratio study preparation, the department reserves the right to employ other statistically accepted methods for purposes of preparing the study.

(3) The department will rely upon the sales information which is reflected on realty transfer certificates filed pursuant to 15-7-302, MCA, for purposes of a sales assessment ratio study. The sales for all commercial and industrial property shall be identified in the department's computer system.

(a) The department shall rely upon the expertise and the judgment of its various appraisers in order to determine whether a particular sale is suitable for inclusion in the study. That judgment is exercised when the appraiser checks the appropriate block on the realty transfer certificate reflecting that the sale is a valid sale.

(b) The department will rely upon the sales confirmation process which is set forth in the document entitled Sales Assessment Ratio Study Preparation.

(c) For purposes of the sales assessment ratio study, the department shall rely upon all valid realty transfer certificate sales information for the preceding calendar year.

(4) The department may engage the services of various statisticians, experts, and other persons in order to facilitate the preparation of the sales assessment ratio study.

(5) When the department has prepared the annual sales assessment ratio study, it will be published. The final document will be available upon request to interested parties.

(6) When the department has determined the overall assessed to market value ratio for all commercial and industrial real property and improvements in Montana, it shall integrate that factor into the formula set forth in 15-6-145, MCA.

(7) The sales assessment ratio study will be conducted solely for the purpose of determining the tax rate applicable to class 12 properties.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-145, MCA
History: NEW, 1985 MAR p. 2034, Eff. 12/27/85; AMD, 1993 MAR p. 3061, Eff. 12/24/93; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.121 Allocation Procedure

(1) The department shall allot that portion of a unit valuation to Montana which represents the state's proper share of the market value of a centrally assessed company's operating property. The procedures used to assign Montana's portion of the unit value will vary depending upon the availability of information and the type of company.

(2) Except for railroad operating property, Title 15, MCA, does not provide procedures for the allocation of unit value. Therefore, the department will use ratios that are readily available, accurate, and arrived at by exercise of sound judgment which reflect the relationship between the unit value and the value of Montana property.

(3) For the purpose of allocating the unit value, quantity, use, and productivity ratios may be applied. Following are examples of possible ratios the department may apply to allocate unit value to Montana. The following examples shall not be construed to prohibit the use of other factors in the allocation process:

(a) for airlines:

(i) Western States Association of Tax Administrators formula which separates mobile and terminal property for the purpose of allocation;

(ii) originating and terminating tons;

(iii) equated ground hours;

(iv) equated flight hours;

(v) revenue ton miles;

(vi) arrivals and departures;

(b) for electric:

(i) cost;

(ii) revenue;

(iii) wire miles;

(iv) pole line miles;

(i) cost;

(ii) revenue;

(iii) pipe miles;

(iv) mcf miles;

(d) for pipelines:

(i) cost;

(ii) mcf miles;

(iii) pipe miles;

(iv) barrel miles;

(e) for telephone:

(i) cost;

(ii) revenue;

(iii) telephone;

(f) for microwave:

(i) cost;

(ii) revenue;

(g) for telecommunication:

(i) cost;

(ii) revenue;

(iii) number of customers;

(iv) billing addresses.

(4) As an alternative to the allocation formula provided in 15-23-213, MCA, the department will use an equivalent car count for each company as the sole factor for allocating railcar property in Montana.

(5) For tax year 2003, the department will utilize the following miles as the Montana miles per day:

(a) 475 miles for flat, box, gondola, and coal gondola railcars, when specifically reported by railcar type; and

(b) 265 miles for all other railcars.

(6) For tax year 2004 and subsequent tax years, and in the absence of a speed study supplied by a railcar company, the department will utilize the following default miles as the Montana miles per day:

(a) 450 miles for flat, box, gondola, and coal gondola railcars, when specifically reported by railcar type; and

(b) 250 miles for all other railcars.

(7) A railcar company must report by specific railcar type to qualify for the higher default figure. In the event that a railcar company does not report by specific railcar type, the lower default figure will be applied to all of the railcar company's railcars.

(8) Commencing with the 2004 tax year, if a railcar company believes that 250 or 450 miles per day does not accurately reflect the speed of its cars, it may submit a speed study to establish its Montana miles per day.

(9) A speed study must include a statistically valid sample of the cars that reside or travel in the state, and must include data from one month, the month to be determined by the department. The department shall identify to the railcar companies the month to be utilized in the speed study by February 1 of the prior tax year.

(10) For tax year 2004, the department shall identify to the railcar companies the month to be utilized in the speed study by May 1, 2003.

(11) The sample population for a speed study must include all railcars and railcar types that were present in the state at any time during the time period being analyzed for the speed study.

(12) Cars shall be selected randomly from the sample population.

(13) For each car selected for the speed study, the company will report the time required to travel from the nearest timing point before the car entered the state to the nearest timing point after the car left the state and the total miles between those points. The company will then total the mileage and time for all cars in the study, and compute a speed from those totals. Speed will be computed by dividing the total miles by the total time, multiplied by 24, to equal miles per day.

(14) If the department determines that a speed study is not representative of the movement of cars within the state, or that the data were incorrectly compiled, the speed study will not be utilized to determine Montana miles per day, and the department shall use the appropriate default number, pursuant to (6).

(15) A speed study will only be valid for three years. A new speed study must be resubmitted after three years, unless the department agrees in writing to accept a previously submitted speed study.

(16) A speed study must be submitted to the department no later than December 1 prior to the tax year for which the speed study is to be applied. The department will apply the default provision in (6) to railcar companies that fail to provide a speed study by the time specified in this section.

(17) When computing allocation factors for airline companies, the department shall find separate mobile and terminal factors. These factors will be combined to make a single allocation factor. The combination will be made according to the relationship of the mobile and terminal properties cost.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-1-101, 15-23-213, MCA
History: NEW, Eff. 12/4/76; AMD, 1980 MAR p. 1091, Eff. 3/28/80; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1993 MAR p. 435, Eff. 3/26/93; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 565, Eff. 3/28/03; AMD, 2015 MAR p. 2149, Eff. 12/11/15.

Mont. Admin. R. 42.22.122 Apportionment Procedure

(1) Except for railroad car companies, the department shall apportion the Montana allocated value of centrally assessed companies to the taxing units.

(2) To determine the amount of value available for distribution to the taxing units, the department shall deduct the Montana situs property value from the state allocated value.

(a) The difference is apportioned to the taxing units as provided in (3) .

(b) The Montana situs property value is apportioned to the taxing units as provided in (4) .

(i) MSPV =

Installed cost (Total unit value)

of Montana X Total installed cost of all

situs property operating property for the unit

(ii) MSPV =

Installed cost (MT unit value)

of Montana X Total installed cost of MT

situs property operating property for the unit

(iii) MSPV =

MT unit value X Total system situs costs

System total costs

(3) Apportionment under (2) (a) may be made by the following methods:

(a) airlines - arrivals and departures;

(b) electric - pole and wire mileage by capacity;

(d) microwave - situs of equipment;

(e) pipeline - pipe mileage by size;

(f) railroads - track mileage weighted at 100% for main line, 60% for branch line and 40% for side track.

(g) telecommunications - wire mileage and/or situs of equipment;

(h) telephone - wire mileage and situs of equipment.

(4) In addition to the methods in (3) the department may use other methods which properly apportion value among the taxing units.

(5) The Montana situs property value is apportioned to the taxing units in which the property is situated. To accomplish this the total installed cost of situs property in each taxing unit is multiplied by the percentage computed by dividing the MSPV developed in (2) (c) by the total installed cost of Montana situs property.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): Title 15, chapter 23, part 1, 15-23-201, MCA
History: NEW, Eff. 12/4/76; AMD, 1980 MAR p. 1091, Eff. 3/28/80; AMD, 1980 MAR p. 1543, Eff. 5/30/80; AMD, 1984 MAR p. 2041, Eff. 12/28/84; AMD, 1989 MAR p. 760, Eff. 6/16/89; AMD, 1992 MAR p. 2787, Eff. 12/25/92; AMD, 1993 MAR p. 435, Eff. 3/26/93; AMD, 1999 MAR p. 2914, Eff. 12/17/99.

Subchapter 42.22.2 Wholesale Energy Transaction Tax

Mont. Admin. R. 42.22.201 Definitions

The following definitions apply to this sub-chapter:

(1) "Electricity produced in the state for delivery outside of the state" as used in 15-72-104 , MCA, means electricity that is produced at an electrical generation facility in Montana, and delivered immediately and without interruption to entities beyond Montana borders via a transmission facility.

(2) "Electricity produced in the state for delivery within the state," means electricity that is not produced for delivery outside of the state.

History

Authorizing statute(s): Sec. 15-72-117, MCA
Implementing statute(s): Sec. 15-72-104, MCA
History: NEW, 1999 MAR p. 2914, Eff. 12/17/99.

Mont. Admin. R. 42.22.202 Wholesale Energy Transaction Tax - Assessment of the Tax

(1) A distribution services provider who purchases its electricity directly from an agency of the United States government will self-assess the tax on the kilowatt hours of electricity that it receives and will forward the tax to the department.

(2) In all other circumstances, the distribution services provider is the taxpayer and the transmission services provider shall collect the tax and forward it to the department.

History

Authorizing statute(s): Sec. 15-72-117, MCA
Implementing statute(s): Sec. 15-72-105 and 15-72-106, MCA
History: NEW, 1999 MAR p. 2914, Eff. 12/17/99.

Subchapter 42.22.13 Market Value of Industrial Property

Mont. Admin. R. 42.22.1301 Definitions

The following definitions apply to terms found in this subchapter:

(1) "Industrial appraiser" means a person who has completed the necessary training and is certified to appraise industrial property in Montana.

(2) "Industrial improvements" means all improvements upon the land, of a civil construction character, utilized to house the industrial process. All storage facilities shall be treated as improvements to land.

(3) "Industrial plant" means a combination of land, land improvements, improvements and machinery that have been organized into a functioning unit. The value of the several components will be placed in the proper tax classification according to the use of the property.

(4) "Industrial property" means property used in the extraction, production, distribution, and changing the form of raw materials or assembling components and parts, packing and warehousing, and shipping of the finished products.

(5) "Manufacturing machinery and equipment" means all property used in the manufacturing process, whether permanently or temporarily in place, used to transform raw or finished materials into something possessing a new nature or name and adopted to a new use.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 2005 MAR p. 667, Eff. 4/29/05.

Mont. Admin. R. 42.22.1302 Industrial Plant

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; REP, 2005 MAR p. 667, Eff. 4/29/05.

Mont. Admin. R. 42.22.1303 Classification of Industrial Buildings Improvements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; REP, 2005 MAR p. 667, Eff. 4/29/05.

Mont. Admin. R. 42.22.1304 Valuation of Industrial Improvements

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 1992 MAR p. 2078, Eff. 9/11/92; AMD, 1996 MAR p. 3153, Eff. 12/6/96; AMD, 2004 MAR p. 2106, Eff. 9/3/04; AMD, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2012 MAR p. 2641, Eff. 12/21/12; REP, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1305 Industrial Property Other Than Land

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1996 MAR p. 3153, Eff. 12/6/96; AMD, 2005 MAR p. 667, Eff. 4/29/05; REP, 2024 MAR p. 284, Eff. 2/10/24.

Mont. Admin. R. 42.22.1306 Valuation of Industrial Property Other Than Land

(1) All property other than land or industrial improvements to land shall be valued by trending the original installed cost to a current replacement cost, then depreciating on an age/life basis to compensate for ordinary physical deterioration and/or functional obsolescence.

(2) If adequate market data exist, the department may apply the approaches to valuation described in ARM 42.22.1309 .

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 2005 MAR p. 667, Eff. 4/29/05.

Mont. Admin. R. 42.22.1307 Trend Factors

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 2012 MAR p. 2496, Eff. 12/7/12; REP, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1308 Depreciation Schedules

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 2012 MAR p. 2496, Eff. 12/7/12; REP, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1309 Valuation Methods for Industrial Properties

(1) When determining the market value of industrial properties, department appraisers may consider, based on generally accepted appraisal principles, the cost approach, the income approach, and the market approach to value, if the necessary information is available.

(2) Extraordinary functional and/or economic obsolescence is treated on a case-by-case basis.

(3) Through the appraisal process, the department shall arrive at a valuation that most accurately estimates market value.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 2005 MAR p. 667, Eff. 4/29/05.

Mont. Admin. R. 42.22.1310 Issuance of Depreciation and Trending Schedules

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-8-111, MCA
History: NEW, 1982 MAR p. 1270, Eff. 7/1/82; AMD, 2005 MAR p. 667, Eff. 4/29/05; REP, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1311 Industrial Machinery and Equipment Trend Factors

(1) Prior to January 1 of each year, the department calculates trend factors to value industrial machinery and equipment for ad valorem tax purposes pursuant to ARM 42.22.1306. The department uses annual cost indexes from the Marshall & Swift Guide described in ARM 42.21.155. The current index is divided by the annual index for each year to arrive at a trending factor. Each major industry has its own trend factor table containing industry descriptions with the applicable trend table number and life expectancy. Where no index exists in the Marshall & Swift Guide for an industry, that industry is grouped with other industries using similar equipment. Industrial machinery and equipment remain taxable at the level of the final year of life expectancy until its disposal.

(2) The department shall post its trend factor tables for industrial machinery and equipment for the upcoming tax year on the department's website located at https://www.revenue.mt.gov. The department adopts and incorporates by reference its 2026 Personal Property Depreciation Schedules and Trend Tables publication (v. 2), effective June 6, 2026. The Depreciation Schedules and Trend Tables publication contains the detailed schedules and tables the department uses for valuing personal property and industrial machinery and equipment.

(3) Mining machinery and equipment is engaged in the extraction, excavation, burrowing, or otherwise freeing raw material from the earth. Mobile mining equipment moves under its own power or on its own wheels and chassis, including any attachments used with or attached to such equipment, but does not include equipment that requires a foundation for the performance of the function for which it was designed and built. Mobile mining equipment used for extraction is valued by using the procedures established for heavy equipment found in ARM 42.21.154 and 42.21.155.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-8-111, MCA
History: NEW, 1986 MAR p. 2074, Eff. 12/27/86; AMD, 1988 MAR p. 1981, Eff. 9/9/88; AMD, 1989 MAR p. 231, Eff. 1/27/89; AMD, 1990 MAR p. 1849, Eff. 9/28/90; AMD, 1991 MAR p. 130, Eff. 2/1/91; AMD, 1991 MAR p. 2048, Eff. 11/1/91; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 3062, Eff. 12/24/93; AMD, 1994 MAR p. 3197, Eff. 12/23/94; AMD, 1995 MAR p. 2508, Eff. 11/23/95; AMD, 1996 MAR p. 162, Eff. 1/12/96; AMD, 1996 MAR p. 3153, Eff. 12/6/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3318, Eff. 12/18/98; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2000 MAR p. 3565, Eff. 12/22/00; AMD, 2001 MAR p. 2249, Eff. 11/9/01; AMD, 2002 MAR p. 1094, Eff. 4/12/02; AMD, 2002 MAR p. 3728, Eff. 12/27/02; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2004 MAR p. 2603, Eff. 10/22/04; AMD, 2005 MAR p. 2262, Eff. 11/11/05; AMD, 2006 MAR p. 2979, Eff. 12/8/06; AMD, 2007 MAR p. 1826, Eff. 11/9/07; AMD, 2008 MAR p. 2561, Eff. 11/27/08; AMD, 2009 MAR p. 2497, Eff. 12/25/09; AMD, 2010 MAR p. 3022, Eff. 12/24/10; AMD, 2012 MAR p. 409, Eff. 2/24/12; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2013 MAR p. 2316, Eff. 12/13/13; AMD, 2014 MAR p. 2991, Eff. 12/12/14; AMD, 2015 MAR p. 2364, Eff. 12/25/15; AMD, 2016 MAR p. 736, Eff. 4/23/16; AMD, 2016 MAR p. 2340, Eff. 1/1/17; AMD, 2017 MAR p. 2341, Eff. 1/1/18; AMD, 2019 MAR p. 209, Eff. 2/23/19; AMD, 2020 MAR p. 97, Eff. 1/18/20; AMD, 2020 MAR p. 2276, Eff. 1/1/21; AMD, 2021 MAR p. 1802, Eff. 1/1/22; AMD, 2022 MAR p. 2368, Eff. 12/24/22; AMD, 2023 MAR p. 1896, Eff. 1/1/24; AMD, 2024 MAR p. 2642, Eff. 1/1/25; AMD, 2025 MAR, Notice No. 2025-443, Eff. 1/1/26; AMD, 2026 MAR, Notice No. 2026-82, Eff. 6/6/26.

Mont. Admin. R. 42.22.1312 Industrial Machinery and Equipment Depreciation Schedule

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-135, 15-6-138, 15-6-156, 15-6-157, 15-6-158, 15-8-111, MCA
History: NEW, 1986 MAR p. 2074, Eff. 12/27/86; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 1993 MAR p. 3062, Eff. 12/24/93; AMD, 1994 MAR p. 3197, Eff. 12/23/94; AMD, 1996 MAR p. 162, Eff. 1/12/96; AMD, 1997 MAR p. 2297, Eff. 12/16/97; AMD, 1998 MAR p. 3318, Eff. 12/18/98; AMD, 1999 MAR p. 2914, Eff. 12/17/99; AMD, 2003 MAR p. 2901, Eff. 12/25/03; AMD, 2012 MAR p. 2496, Eff. 12/7/12; AMD, 2015 MAR p. 2149, Eff. 12/11/15; REP, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1313 Assessment of Grain, Seed, and Fertilizer Storage Facilities

(1) Grain storage facilities, seed treating plants, and fertilizer storage plants are improvements to real property for which the use is bulk storage of unprocessed grain, seed cleaning and treating, and bulk storage of fertilizers awaiting sale or processing. Blending, cleaning, treating, packaging, conditioning, dust removal, and pollution control are not considered a manufacturing process.

(2) All product moving or handling property used in grain storage facilities, seed cleaning facilities, and bulk fertilizer facilities is considered part and parcel to the facility and is assessed under 15-6-134, MCA. Property under this rule shall not be considered manufacturing equipment.

(3) Bulk fertilizer facilities are defined as an improvement to land for storing, blending, and distributing dry fertilizers. Blending, cleaning, treating, packaging, conditioning, dust removal, and pollution control in these facilities are not considered a manufacturing process.

(4) Seed cleaning facilities are defined as an improvement to land if used either solely or in conjunction with a grain elevator for the cleaning and treating of seed grain. Blending, cleaning, treating, packaging, conditioning, dust removal, and pollution control in these facilities are not considered a manufacturing process.

(5) All property described in (1) and (2) shall be valued according to the reappraisal cycle established for other class four property in 15-7-103, MCA. The department will determine market value considering the cost approach, sales comparison approach, and income approach. When using the cost approach, a separate age/life schedule will be applied to the product handling portion of the facility to reflect physical depreciation and functional obsolescence. Economic obsolescence will be addressed on a case by case basis. Cost data used in developing the cost approach for property included in this rule is found in the Marshall & Swift Valuation Service Guide, adopted and incorporated by reference in ARM 42.21.155.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-134, 15-6-138, 15-7-103, 15-8-111, MCA
History: NEW, 1991 MAR p. 2639, Eff. 12/27/91; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 2000 MAR p. 3565, Eff. 12/22/00; AMD, 2015 MAR p. 2149, Eff. 12/11/15; AMD, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1314 2003 Industrial Property Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1993 MAR p. 2127, Eff. 9/17/93; AMD, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD and TRANS, from ARM 42.18.118, 2005 MAR p. 667, Eff. 4/29/05; REP, 2012 MAR p. 2641, Eff. 12/21/12.

Mont. Admin. R. 42.22.1315 2015 Industrial Property Reappraisal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, 15-7-111, MCA
Implementing statute(s): 15-7-111, MCA
History: NEW, 1996 MAR p. 3149, Eff. 12/6/96; TEMP, AMD, 1997 MAR p. 1593, Eff. 9/9/97; AMD, 2000 MAR p. 3562, Eff. 12/22/00; AMD, 2002 MAR p. 1099, Eff. 4/12/02; AMD, 2004 MAR p. 3156, Eff. 12/17/04; AMD and TRANS, from ARM 42.18.119, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2015 MAR p. 2149, Eff. 12/11/15; REP, 2020 MAR p. 2276, Eff. 1/1/21.

Mont. Admin. R. 42.22.1316 Industrial Property Certification Requirements

(1) The employee must hold a bachelor degree from an accredited college or have at least five years experience in the industrial or complex property valuation field.

(2) Training and testing criteria shall be as follows:

(a) The employee will be required to take the International Association of Assessing Officers (IAAO) Courses I and II or their equivalents. The employee will be required to take the Appraisal Institutes (AI) Courses 101, 102, 201, and 202 or their equivalents. The employee will be required to take the Uniform Standards of Professional Appraisal Practices (USPAP) course. A USPAP refresher will be required every five years thereafter. These courses will be made available annually if funding is available.

(b) The employee shall attend the first scheduled IAAO courses after accepting the industrial property responsibilities. Satisfactory completion of the IAAO training session(s) shall include successful completion of the written examination conducted at the conclusion of the IAAO training session(s). If the employee fails to successfully complete the first written examination, attendance at the next unit valuation training session(s) shall be required. Failure to successfully complete the second written examination(s) shall result in immediate termination of employment. Previous appraisal designations may be considered as substitutes for this course as determined by the unit manager. The appraiser shall attend the first scheduled AI Courses 101,102, 201, and 202. Satisfactory completion of the AI training session shall include successful completion of the written examination(s) conducted at the conclusion of the unit valuation training session(s). If the employee fails to successfully complete the first written examination(s), attendance at the next AI training session(s) shall be required. Failure to successfully complete the second written examination(s) shall result in immediate termination of employment. Previous appraisal courses may be considered as substitutes for these courses as determined by the unit manager.

(3) Upon commencement of employment with the department as an industrial property appraiser, the employee shall undertake a one-year period of on-the-job appraisal work during which time the employee will begin the process of meeting the requirements set forth in (1) and (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic six-month probation period set forth in department policy 3.1.4. The commencement of the year experience requirement will coincide with the employee's notification of being assigned industrial property appraisal responsibilities. All work will be supervised by the department. Failure to perform the appraisal work satisfactorily may result in immediate termination of employment.

(4) The department may waive the criteria set forth in (1) and (2) if sufficient proof is presented that the employee has previously fulfilled such criteria. For example, the employee may have completed a course of instruction from a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102, MCA. The course must be equal to or greater in complexity than that of courses required above. An employee who has attained a Certified General License through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry is also eligible for a waiver under this subsection.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-7-107, 15-7-111, MCA
History: NEW, 2003 MAR p. 804, Eff. 4/25/03; TRANS, from ARM 42.18.209, 2005 MAR p. 667, Eff. 4/29/05; AMD, 2010 MAR p. 2221, Eff. 9/24/10.

Mont. Admin. R. 42.22.1317 Unit Valuation or Centrally Assessed Property Appraiser Certification Requirements

(1) The employee must hold a bachelor degree from an accredited college or have at least five years experience in the business or centrally assessed property valuation field.

(2) Training and testing criteria shall be as follows:

(a) The employee will be required to take the International Association of Assessing Officers (IAAO) Courses I and II or their equivalents. The employee will be required to take the American Society of Appraisers (ASA) Courses BV201N, BV202N, and BV203N1 or their equivalents. The employee will be required to take the Uniform Standards of Professional Appraisal Practices (USPAP) course. An USPAP refresher will be required every five years thereafter. The employee will be required to attend the Western States Association of Tax Administrators, Committee on Centrally Assessed Properties (WSATA-CCAP) Courses 101, 102, and 103 or their equivalents. These courses will be made available annually if funding is available.

(b) The employee shall attend the first scheduled WSATA-CCAP course after accepting the unit valuation or centrally assessed appraiser responsibilities. Satisfactory completion of the unit valuation training session shall include successful completion of the written examination conducted at the conclusion of the unit valuation training session. If the employee fails to successfully complete the first written examination, attendance at the next unit valuation training session shall be required. Failure to successfully complete the second written examination shall result in immediate termination of employment. Previous appraisal designations may be considered as substitutes for this course as determined by the Unit Manager. The appraiser shall attend either the first scheduled IAAO Courses I and II, or ASA Courses BV201N, BV202N, and BV203N. Satisfactory completion of the IAAO or ASA training session shall include successful completion of the written examination conducted at the conclusion of the unit valuation training session. If the employee fails to successfully complete the first written examination, attendance at the next IAAO or ASA training session shall be required. Failure to successfully complete the second written examination shall result in immediate termination of employment. Previous appraisal courses may be considered as substitutes for these courses as determined by the Unit Manager.

(3) Upon commencement of employment with the department as a unit valuation or centrally assessed appraiser, the employee shall undertake a one-year period of on-the-job appraisal work during which time the employee will begin the process of meeting the requirements set forth in (1) and (2). For employees new to state government, this one-year period will run concurrently with and in addition to the automatic six-month probation period set forth in department policy 3.1.4. The commencement of the year experience requirement will coincide with the employee's notification of being assigned unit or centrally assessed appraisal responsibilities. All work will be supervised by the department. Failure to perform the appraisal work satisfactorily shall result in immediate termination.

(4) The department may waive the criteria set forth in (1) and (2) if sufficient proof is presented that the employee has previously fulfilled such criteria. For example, the employee may have completed a course of instruction from a professional appraisal and real estate related organization, provided that the organization is a member of The Appraisal Foundation as defined in 37-54-102(3), MCA. The course must be equal to or greater in complexity than that of courses required above. An employee who has attained a Certified General License through the Board of Real Estate Appraisers of the Business and Occupational Licensing Bureau of the Montana Department of Labor and Industry is also eligible for a waiver under this subsection.

History

Authorizing statute(s): 15-23-108, 15-53-155, 15-72-117, MCA
Implementing statute(s): 15-23-101, 15-23-104, 15-23-211, 15-23-213, 15-53-145, 15-53-147, 15-72-104, MCA
History: NEW, 2010 MAR p. 2221, Eff. 9/24/10.

Mont. Admin. R. 42.22.1318 Energy Production or Development - Property Tax Abatement Eligibility for New Investment in the Conversion, Transport, Manufacture, Research, and Development of Renewable Energy, Clean Coal Energy, and Carbon Dioxide Equipment and Facilities

(1) The property owner of record, the property's owner's agent, or the operator of the qualifying property must apply to the Department of Environmental Quality (DEQ) for a certification of eligibility for equipment or facilities for which the abatement is sought. Upon review of the application, the DEQ shall provide the Department of Revenue (department) with a certification of eligibility for qualifying equipment or facilities.

(2) The department shall classify the property in the appropriate class of property and shall assess the qualifying facilities for which the certification is granted at 50% of its taxable value for the qualifying period which includes the construction period and the first 15 years after the facility commences operation or the clean advanced coal research and development equipment or renewable energy research and development equipment is purchased. The total time of the qualifying period may not exceed 19 years.

(3) For centrally assessed property, the department shall determine the market value of the property or equipment by multiplying the depreciated value of the approved class fourteen, fifteen, or sixteen qualifying equipment of facilities by a market to book ratio then multiplying by 0.50. The market to book ratio shall be determined by dividing the system or unit value after deduction of the exempt intangible personal property by the system net book value after deduction of the exempt intangible personal property. This value shall then be deducted from the Montana value and certified to the counties as class fourteen, fifteen, or sixteen property.

(4) For industrially assessed property, the department shall determine the market value of the qualifying industrially assessed property in accordance with ARM 42.22.1309 and then multiply the qualifying property or equipment by 0.50.

(5) Upon revocation of a certification by the DEQ, the department will, if necessary, reclassify the property and assess the property at 100% of its taxable value beginning January 1 of the year or years for which the certification is revoked.

(6) If the department finds that a certification for a transmission line which was previously granted was based on an application that the applicant knew was false or fraudulent or subsequently revoked, the department must reclassify property as class nine under 15-6-141, MCA. In addition, the department may assess the applicant for additional taxes, penalty, and interest from the time the certification was in effect.

History

Authorizing statute(s): 15-24-3116, MCA
Implementing statute(s): 15-6-141, 15-6-157, 15-6-158, 15-6-159, 15-24-3101, 15-24-3102, 15-24-3111, 15-24-3112, 15-24-3116, MCA
History: NEW, 2008 MAR p. 811, Eff. 4/25/08; AMD, 2010 MAR p. 1407, Eff. 6/11/10; TRANS, from 42.4.4114, 2024 MAR p. 2162, Eff. 9/7/24.

Subchapter 42.22.14 Class Four Property

Mont. Admin. R. 42.22.1401 Tax Benefits for Class Four Nonproductive Property

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-6-101, 15-6-150, 15-6-155, 15-8-111, MCA
History: NEW, 1988 MAR p. 742, Eff. 4/15/88; AMD, 1992 MAR p. 2560, Eff. 11/26/92; AMD, 2000 MAR p. 3565, Eff. 12/22/00; REP, 2004 MAR p. 2106, Eff. 9/3/04.

Chapter 42.23 Corporate Income Tax - General

Subchapter 42.23.1 General Provisions

Mont. Admin. R. 42.23.101 Extent of Tax Liability

(1) Every corporation engaged in business in Montana must annually pay the statutory percentage of its total net income received from all sources within the state during the preceding year. The tax may not be less than the specified minimum, which must be paid even though a net loss was sustained during the reporting period. However, no tax is assessable against a corporation which was not engaged in business within the state during the reporting period.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-101 and 15-31-121, MCA
History: Eff. 12/31/72.

Mont. Admin. R. 42.23.102 Doing or Engaging in Business

(1) A corporation is "doing business" or "engaging in business" in Montana when it actively engages therein in any profit seeking activity. The fact that its activity may result in a loss is not material.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-101, MCA
History: Eff. 12/31/72.

Mont. Admin. R. 42.23.103 Exemptions

(1) A corporation is not exempt from this tax merely because it is not organized and operated for profit. A corporation seeking the benefits of exemption must prove strict compliance with all statutory conditions authorizing the classification claimed.

(2) In order to establish its exemption and thus be relieved of the duty of filing returns and paying the tax, each organization claiming exemption must file with the department an affidavit showing:

(a) the character of the organization;

(b) the purpose for which it was organized;

(d) the sources and the disposition of its income;

(e) whether or not any of its income may inure to the benefit of any private shareholder or individual;

(f) a copy of the articles of incorporation;

(g) a copy of the by-laws; and

(h) copies of the latest financial statements showing the assets, liabilities, receipts, and disbursements must be submitted with the affidavit.

(3) In addition, if the IRS has granted the organization exemption from the federal income tax, a certified copy of the exemption certificate or letter shall also be filed.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-101 and 15-31-102, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.104 Gross Income

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-113, MCA
History: Eff. 12/31/72; AMD, 1979 MAR p. 1553, Eff. 12/14/79; REP, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.105 Disclosure of Information

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-507, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; REP, 2011 MAR p. 2053, Eff. 9/23/11.

Mont. Admin. R. 42.23.106 Treatment of Gains from Certain Liquidation

(1) Gains resulting from a liquidation pursuant to IRC 331 through 337 are taxable to the liquidating corporation to the extent these gains are attributable to corporate or individual share holders not subject to tax. In the event the liquidating corporation has some shareholders subject to tax in Montana and some who are not, the portion of the gain on liquidation taxable to the liquidating corporation will be determined based on the ratio common stock owned by nontaxable shareholders bears to total common stock issued and outstanding. This applies to all tax years beginning after December 31, 1980.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-113, MCA
History: NEW, 1982 MAR p. 104, Eff. 1/29/82.

Mont. Admin. R. 42.23.107 Definitions

The following definitions apply to rules found in this chapter:

(1) "Small business investment company" means only those companies approved and licensed to operate as small business investment companies by the federal small business administration.

History

Authorizing statute(s): 15-33-105, MCA
Implementing statute(s): 15-33-103, MCA
History: NEW, 1982 MAR, p. 1488, Eff. 7/30/82; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2011 MAR p. 2053, Eff. 9/23/11.

Mont. Admin. R. 42.23.108 Conditions for Exemption for Dividends

(1) Dividends and capital gains received by a corporation from an investment in a small business investment company are exempt from tax and the provisions of Title 15, chapter 31, MCA, provided all the following conditions are met:

(a) The small business investment company is organized for the purpose of diversifying and strengthening employment opportunities of companies within Montana.

(b) Within one year of licensing by the federal small business administration, 75 percent of the small business investment company's investments are in manufacturing companies as defined in (i) or timber product companies, or agricultural companies as defined in (ii), and such companies' processing plants are located within Montana. The companies must have at least 50 percent of their employees working in Montana.

(i) Manufacturing, for the purposes of this rule, is defined as engaging in the mechanical or chemical transformation of materials or substances into new products. The manufacturing facilities are usually described as plants, factories, or mills and characteristically use power driven machines and material handling equipment. Businesses engaged in assembling component parts of manufactured products are all considered to be manufacturing if the product is neither a structure affixed to real estate nor a fixed improvement. Manufacturing facilities shall not include facilities engaged in whole or part in the extraction of any mineral or nonrenewable energy resource.

(ii) Agricultural refers to the raising or processing of livestock, swine, poultry, field crops, fruit and other animal, and vegetable matter.

(c) It is substantiated that the taxpayer has invested in the small business investment company and that the small business investment company has invested in companies located within Montana. The small business investment company must provide a report as part of the annual filing of the Montana corporate income tax return.

History

Authorizing statute(s): 15-33-105, MCA
Implementing statute(s): 15-33-102, 15-33-106, MCA
History: NEW, 1982 MAR p. 1488, Eff. 7/30/82; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.109 Reporting Requirements

(1) The small business investment company shall report as part of the corporate income tax return the following information on a form provided for that purpose:

(a) the names of all investors in the small business investment company;

(b) the amount of investment of each of the investors; and

(i) the name and location of the companies; and

(ii) the amount invested in the company.

(2) If any of the information required to be reported in (1) shall change after the return is made, such changes must be reported to the department by the last day of the month the change occurred.

History

Authorizing statute(s): 15-33-105, MCA
Implementing statute(s): 15-33-104, MCA
History: NEW, 1982 MAR p. 1488, Eff. 7/30/82; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.110 Determination of Qualified Investments

(1) In instances where it is difficult to determine if a business in which a small business investment company has invested qualifies as a manufacturing, timber product processing, or agricultural company with at least 50% of its employees working in Montana, a description of the activities of the business and the location of its jobs shall be submitted to the department for a determination. The description of the activities of the business and the location of its jobs may be submitted either on the initiative of the small business investment company or at the request of the department.

History

Authorizing statute(s): Sec. 15-33-105, MCA
Implementing statute(s): Sec. 15-33-102, MCA
History: NEW, 1982 MAR p. 1488, Eff. 7/30/82.

Mont. Admin. R. 42.23.111 Federal Obligation Interest

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Re-pealed.)

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-113, 15-31-114, and 15-31-116, MCA
History: NEW, 1985 MAR p. 375, Eff. 4/26/85; REP, 1996 MAR p. 1177, Eff. 4/26/96.

Mont. Admin. R. 42.23.112 Research and Development - Application and Eligibility

(1) The department will certify the eligibility of firms for both the five-year corporation tax exemption and the class five research and development property classification.

(2) A firm may apply for either or both the corporation tax or property tax benefit. Claiming one of the benefits is not a prerequisite to claiming the other.

(3) To qualify for the class five property classification, a firm must apply annually to the department on or before January 1 of the year for which the classification is desired.

(4) To obtain the corporate income tax exemption, the firm must file an annual application with the department before the end of the first calendar quarter during which the firm does business in Montana. The initial application must be filed before the end of the first complete calendar quarter during which the corporation is engaged in business in Montana. For example, if a corporation began operating in Montana on September 15, that corporation would have until December 31 of that year to file for the exemption.

(5) Taxpayers will be required to submit information determined to be necessary by the department for evaluating the eligibility of firms for the research and development tax benefits.

History

Authorizing statute(s): 15-1-201, 15-31-501, MCA
Implementing statute(s): 15-6-135, 15-31-103, MCA
History: NEW, 1987 MAR p. 1802, Eff. 10/16/87; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.113 Research and Development Firm - Exemption Period

(1) An entity that qualifies as a research and development firm as defined in 15-1-101, MCA, and is incorporated or qualified to do business in Montana on or after July 1, 1987, is exempt from the corporate income tax on the net income earned from research and development activities for its first five tax periods.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-103, MCA
History: NEW, 1987 MAR p. 1802, Eff. 10/16/87; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.114 Reorganizations

(1) A corporation which is created through the reorganization of a corporation currently operating in Montana, is not eligible for the research and development tax benefits if the newly created research and development subsidiary is essentially continuing current and past activities of the parent in Montana. If the newly created corporation is carrying on new research and development activities separate and distinct from the operations of the parent, the corporation will be eligible for tax benefits.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-103, MCA
History: NEW, 1987 MAR p. 1802, Eff. 10/16/87.

Mont. Admin. R. 42.23.115 Principal Purpose Defined

(1) In order for a firm to qualify as a research and development firm, over 50% of the real and tangible personal property located in Montana and 50% of its Montana payroll must be directly related to research and development activities.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-1-101, MCA
History: NEW, 1987 MAR p. 1802, Eff. 10/16/87.

Mont. Admin. R. 42.23.116 Unrelated Income

(1) Income earned by a research and development firm which is unrelated to research and development activities is not eligible for the five-year exemption from the Montana corporate income tax. In making the determination of whether income earned is related to research and development activities, the department will review the facts presented in each case. However, the following examples demonstrate how the department would decide under certain situations.

(a) If a research and development firm derives income from a contract to perform research and development activities only, all of that income will be eligible for the exemption.

(b) If a research and development firm develops a patent from which it either sells or receives royalties, such income shall be deemed to be research and development income eligible for the exemption.

(c) If a research and development firm is in two distinct businesses, only the income related to the research and development activity shall be exempt.

(d) If a research and development firm develops a product which it then begins to manufacture and sell, a portion of the income from selling the product shall be deemed to be related to the research and development activities. The portion of the total Montana net income deemed to be research and development income activities shall be based upon the average percentage of Montana real and tangible personal property and Montana payroll related to the research and development activities as presented below:

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-103, MCA
History: NEW, 1987 MAR p. 1802, Eff. 10/16/87; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.117 Surtax

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-121, MCA
History: NEW, 1988 MAR p. 277, Eff. 2/12/88; AMD, 1990 MAR p. 234, Eff. 1/26/90; REP, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.118 Nature of Property Being Sold

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-31-313 and 15-31-501, MCA
Implementing statute(s): Sec. 15-31-301 and 15-31-303, MCA
History: NEW, 1988 MAR p. 1814, Eff. 8/12/88; REP, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.119 Solicitation of Orders

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-31-313 and 15-31-501, MCA
Implementing statute(s): Sec. 15-31-301 and 15-31-303, MCA
History: NEW, 1988 MAR p. 1814, Eff. 8/12/88; REP, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.120 Independent Contractors

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-31-313 and 15-31-501, MCA
Implementing statute(s): Sec. 15-31-301 and 15-31-303, MCA
History: NEW, 1988 MAR p. 1814, Eff. 8/12/88; REP, 2001 MAR p. 2046, Eff. 10/12/01.

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-112, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; REP, 1996 MAR p. 1177, Eff. 4/26/96.

Mont. Admin. R. 42.23.211 Use of Separate Accounting Method

(1) In applying the separate accounting method, each item of income is segregated and directly allocated according to its source. Any expense or other deductible items, including a reasonable allowance for general overhead expenses, attributable to the earning of such income are likewise segregated and deducted from such income. Items of nonapportionable income are to be allocated as provided for under 15-31-304, MCA.

History

Authorizing statute(s): 15-31-313, 15-31-501, MCA
Implementing statute(s): Title 15, chapter 31, part 3, MCA
History: Eff. 12/31/72; AMD, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 2020 MAR p. 395, Eff. 2/29/20.

Mont. Admin. R. 42.23.212 Basis for Disposition of Property

(1) The basis for determining gain or loss from the sale or other disposition of property shall be the basis prescribed by the IRC and regulations in effect during the reporting period, except such provisions therein as are inconsistent with the express provisions of these regulations or 15-31-113, MCA.

History

Authorizing statute(s): 15-31-313, 15-31-501, MCA
Implementing statute(s): 15-31-113, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Subchapter 42.23.3 Returns

Mont. Admin. R. 42.23.301 Period Covered by Return

(1) The return must be prepared and net income computed on the basis of an annual accounting period. A return may not be prepared for a period of more than 12 months.

(2) A return for a fractional part of a year is required in the following cases:

(a) when a foreign corporation qualifies or a domestic corporation organizes on a day other than the first day of the reporting period it intends to establish;

(b) when a foreign corporation withdraws or when a domestic corporation dissolves on a day other than the last day of its established reporting period; or

(3) In cases shown in (2) , a return must be filed for the short period beginning with the day following the close of the old period and ending with the day preceding the first day of the new period.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-111, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.302 Extension of Filing Time

(1) For years be-ginning on or after January 1, 1995, if a corporation cannot file its return within the prescribed time an automatic extension of up to six months following the statutory due date shall be granted. No form needs to be filed to receive this extension. This automatic extension has no effect on the requirements for the payment of quarterly estimated tax or on the due dates for those payments. Payment of any remaining tax after the deduction of any quarterly estimated payments, plus accrued interest, must accompany the return when filed. If the tax payment does not accompany the return, the tax is considered delinquent, and the taxpayer is subject to the imposition of a penalty.

(2) The department may grant additional time for filing a return whenever in its judgment good cause exists.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-111, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1995 MAR p. 2852, Eff. 12/22/95.

Mont. Admin. R. 42.23.303 Change in Federal Tax or Return

(1) Taxpayers are required to report to the department adjustments or corrections to their taxable income made by the IRS or other competent authority by filing an amended Montana corporate income tax return within 180 days of the final determination date. If the adjustments or corrections result in an overpayment of tax, the refund claim must be made within the statute of limitation set forth in 15-31-509, MCA.

(a) If the taxpayer files an amended Montana corporate income tax return or a federal adjustment report more than 180 days after the final determination date and has not by written agreement suspended the federal statute of limitations, the period within which a deficiency in tax may be assessed extends for three years from the date the changes or corrections in the taxpayer's federal taxable income become final and are filed with the department or three years from the date the amended federal return was filed.

(b) If the taxpayer fails to file an amended Montana corporate income tax return or a federal adjustments report, the department may at any time assess tax or begin a proceeding in court for the collection of the tax without assessment pursuant to 15-31-544, MCA.

(2) If a taxpayer files an amended federal income tax return for any year changing or correcting its taxable income, the taxpayer is required to file a corresponding amended Montana corporate income tax return within 180 days after filing the amended federal return. If the adjustments or corrections result in an overpayment of tax, the refund claim must be made within the statute of limitations set forth in 15-31-509, MCA.

(a) If the taxpayer files an amended Montana corporate income tax return or a federal adjustments report more than 180 days after filing the amended federal return and has not by written agreement suspended the federal statute of limitations, the period within which a deficiency in tax may be assessed extends for three years from the date the amended Montana return is filed.

(3) Changes or corrections by a taxpayer to federal taxable income, including changes that increase or decrease a net operating loss must be reported to the department through the filing of an amended Montana corporate income tax return within the time prescribed in 15-31-509, MCA, regardless of whether or not an amended federal income tax return was filed.

(4) No de minimis standard applies to the requirements for reporting changes or corrections to federal taxable income. Taxpayers are required to report all such changes and corrections to the department.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-30-3401, 15-31-506, 15-31-509, 15-31-544, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16; AMD, 2022 MAR p. 1763, Eff. 9/10/22.

Mont. Admin. R. 42.23.311 Filing Requirements Upon Merger or Consolidation

(1) In case of either a merger or a consolidation of corporations, the absorbed corporations must file final returns covering the period between the close of the preceding reporting period and the date of merger or consolidation. For taxable years beginning after December 31, 1990, the final return filed on a separate company basis for the period prior to the consolidation is due on the fifteenth day of the fifth month following the close of the first taxable period for which a return is filed on a consolidated basis. A merger will have no effect on the reporting period of the continuing corporation, and it will file its next return on the basis of its regularly established period. However, in the case of a consolidation of corporations, the consolidated company is treated as a new corporate entity and files its first return for the period commencing with the date of the consolidation.

(2) Any corporation which acquires another corporation, by any available method, shall be required to report that income and shall be liable for the corporate tax due on their combined entire net income for the year ensuing.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-141, MCA
History: Eff. 12/31/72; AMD, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.312 Filing Requirements for Inactive Corporations

(1) Both foreign and domestic corporations which have either qualified to do business in Montana or are registered to do business in Montana and not engaged in business in Montana during the reporting period are required to file either an annual return or an annual affidavit provided by the department for such purposes. No tax is assessable against a corporation which was not engaged in business during the reporting period.

(a) If a return is filed, the return must bear the name and address of the corporation, the signature of an officer, contact information, and a statement on the face of the return or attached to the return to the effect that the corporation was not engaged in business in Montana during the reporting period.

(b) If an affidavit is filed, the corporation must use the affidavit provided by the department. It must be completed and signed by an officer of the corporation.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-101, 15-31-111, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.313 Filing Requirements Upon Dissolution, Withdrawal, or Cessation of Business

(1) When a domestic corporation seeks to dissolve, or when a foreign corporation seeks to withdraw or ceases business in Montana, the following requirements must be met for the purpose of obtaining a Dissolution/Withdrawal Certificate:

(a) a completed and signed Application for Tax Certificate (Form CR-T) must be submitted to the department;

(b) all required tax returns must be filed;

(d) an assumption of Montana tax liabilities must be filed with the department on a Form ATL if the corporation is:

(i) party to a merger or consolidation; or

(ii) included in the combined filing of another corporation subject to tax under 15-31-101, MCA, and a final return is not filed.

(2) When a domestic corporation has completed its dissolution or when a foreign corporation has completed its withdrawal and seeks a Tax Clearance Certificate, the following requirements must be met:

(a) a completed and signed Form CR-T must be submitted to the department;

(b) a return clearly marked "Final Return" must be filed for the short period commencing with the closing date of the last period for which a return was filed and extending to the date of dissolution, withdrawal, or cessation of business in this state;

(c) a schedule must be attached to the final return showing the disposition made of the corporate assets. If the corporation sold its assets, any gain or loss from the disposition thereof must be included in the determination of net income, unless the corporation is not required to report gain pursuant to 15-31-113, MCA; and

(d) all taxes, interest, and penalties must be paid.

(3) If a corporation subject to (2) is party to a merger or consolidation, or is included in the combined filing of another corporation subject to tax under 15-31-101, MCA, and a final return is not filed, a Tax Clearance Certificate will not be issued.

(4) Corporations not engaged in business in Montana during the reporting period may file an annual affidavit in lieu of returns as provided for in ARM 42.23.312.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-143, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Subchapter 42.23.4 Deductions

Mont. Admin. R. 42.23.401 Business Expenses

(1) To be deductible as an "ordinary and necessary expense" within the meaning of 15-31-114 , MCA, a payment must have a direct relation to the business of the corporation and it must be shown that it is necessary to the taxpayer's business, that it is ordinary with reference to the relation of the expense to the business, and that it is made with the expectation of a financial return or its equivalent commensurate with the amount of payment.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.402 Deduction for Certain Interest Income

Publisher status: INEFFECTIVE (not currently effective).

(Is Here-by Repealed.)

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: Eff. 12/31/72; REP, 1982 MAR p. 104, Eff. 1/29/82.

Mont. Admin. R. 42.23.403 Treatment of Other Taxes Paid

(1) Taxes paid within the year, with the exception of the following taxes specifically excluded as deductions by statute are:

(a) Montana corporate income tax;

(b) taxes assessed against local benefits of a kind tending to increase the value of the property assessed;

(c) taxes on or according to or measured by net income or profits, imposed by authority of the government of the United States; or

(d) taxes imposed by any other state or country upon or measured by net income or profits. These taxes are not allowable as deductions irrespective of how characterized by regulations adopted by the IRS for purposes of foreign tax credit calculations. (i.e., 26 CFR 1.901 through 1.903.)

(i) A tax based on or measured by net income is a tax which is based on the residual of gross revenues less expenses.

(ii) To the extent any portion of the tax paid to foreign governments is imposed upon or measured by the difference between the posted price and the market price for a barrel of oil, then the tax attributable to this increment is not a tax based upon or measured by net income or profits and is therefore deductible.

(2) With the exception of the contractor's gross receipts tax, taxes may be claimed only as deductions in determining net income and cannot be converted into a credit against the corporate income tax. See ARM 42.4.3103 for details concerning the credit allowed with respect to the contractor's gross receipts tax.

History

Authorizing statute(s): 15-31-313, 15-31-501, MCA
Implementing statute(s): 15-31-114, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1988 MAR p. 2038, Eff. 9/23/88; AMD, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.404 Depreciation and Obsolescence

(1) A reasonable

(2) The basis upon which depreciation is to be computed shall be the same basis as used for federal income tax purposes.

(3) The method of depreciation used and the amount of the depreciation must be the same as that reported for federal income tax purposes.

allowance for the exhaustion, wear and tear, and obsolescence of property arising out of its use or employment in the trade or business is allowed as a depreciation deduction.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1988 MAR p. 1982, Eff. 9/8/88.

Mont. Admin. R. 42.23.405 Depletion Allowance

(1) In the case of mines, other natural deposits, oil and gas wells, and timber, a reasonable allowance for depletion may be claimed. With the exception of property with respect to which an election to claim percentage depletion has been exercised, the capital sum recoverable through depletion allowances is the adjusted basis for determining gain on a sale or other disposition as specified in ARM 42.23.212.

(2) The allowance for depletion shall be determined according to the provisions of the IRC relating to the reporting period.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.406 Contributions to Pension and Profit Sharing Plans

(1) Reasonable contributions made by an employer to a pension, annuity, stock bonus, or profit sharing plan will be considered deductible to the extent they constitute ordinary, necessary, and reasonable business expenses. The amount deductible for federal income tax purposes will be so considered in the absence of evidence to the contrary.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: Eff. 12/31/72.

Mont. Admin. R. 42.23.407 Limitation on Charitable Contribution Deduction

(1) The charitable contribution deduction provided for in 15-31-114 , MCA, cannot exceed 10% of the Montana taxable income or 10% of the income subject to apportionment for multistate corporations calculated without regard to the charitable contribution deduction or any net operating loss carryback to that year.

(2) This limitation can create a difference in the amount of the deduction claimed for Montana and federal income tax purposes. When a difference exists, the taxpayer is required to include a reconciliation between the Montana deduction and the federal deduction. If the federal deduction includes any carryover of contributions previously made, a schedule must be included showing the amount and the year of such contributions. The Montana deduction must be adjusted accordingly for any contributions previously deducted for state purposes and not deducted in prior years on the federal return.

History

Authorizing statute(s): Sec. 15-31-501 MCA
Implementing statute(s): Sec. 15-31-114 MCA
History: NEW, 1988 MAR p. 1538, Eff. 7/15/88; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.411 Losses Not Compensated for

(1) A capital loss, which may be subject to carryover provisions for federal purposes, must be deducted in the year incurred and not carried over for state purposes. A loss must have been sustained within the year in the sense that the full measure of the loss was ascertained within the year. The determination of the year in which a loss is sustained must be made on the basis of the facts as they exist at the close of the reporting period.

(2) No deduction is allowed for a loss which is not bona fide, for anticipated or contingent losses, or for any additions to reserves for such losses.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: Eff. 12/31/72; AMD, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.416 Adjustment of Allowable Deductions

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-116, MCA
History: NEW, 1983 MAR p. 1547, Eff. 10/28/83; AMD, 1985 MAR p. 375, Eff. 4/26/85; REP, 1996 MAR p. 1177, Eff. 4/26/96.

Mont. Admin. R. 42.23.417 Computation of Adjustment

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-116, MCA
History: NEW, 1983 MAR p. 1547, Eff. 10/28/83; AMD, 1985 MAR p. 375, Eff. 4/26/85; REP, 1996 MAR p. 1177, Eff. 4/26/96.

Mont. Admin. R. 42.23.418 Deductions for Corporate Donations of Computer Equipment to Schools

(1) A taxpayer claiming a deduction for gifts of computer equipment as provided for in 15-31-114 , MCA, must attach the following information to the tax return claiming the deduction:

(a) a complete description of all items donated;

(b) a statement of the fair market value of each item donated;

(d) the date the software was developed; and

(2) For the purposes of the deduction allowed by 15-31-114 , MCA, apparatus intended for use with the computer shall include, but not be limited to, software provided that the software was not developed more than five years prior to the date of its donation to a school.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-114, MCA
History: NEW, 1983 MAR p. 1744, Eff. 11/26/83; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.420 Standard Components and Passive Solar Systems

(1) Energy generating systems or their components that are standard components of conventional buildings do not qualify for the alternative energy system credit. The department is authorized to adopt rules defining standard components of conventional buildings and to establish other necessary elements of passive solar systems.

(2) Passive solar energy systems, or the components of those systems that have been determined to be acceptable include:

(a) solar greenhouses, sun porches, and like structures that are properly situated, constructed, and ducted to the building for which they provide energy to be reasonably considered a complete or supplementary energy source for that building;

(b) components of a building that have been altered for energy collection, storage, or distribution to benefit the rest of the building, such as the addition of triple glazed windows to enclosed porches;

(d) thermal collection masses such as brick, stonework, and other types that were not present in the original structure and were not installed for a purpose other than energy storage; and

(e) the components of an envelope house necessary for energy generation and distribution in the "envelope house," such as the "envelope" area devoted solely to energy collection, storage, and distribution.

History

Authorizing statute(s): 15-1-201, 15-32-105, 15-32-203, MCA
Implementing statute(s): 15-6-201, 15-32-102, 15-32-105, 15-32-201, 15-32-202, MCA
History: NEW, 1986 MAR p. 2011, Eff. 12/12/86; AMD, 2000 MAR p. 3560, Eff. 12/22/00; AMD, 2004 MAR p. 1965, Eff. 8/20/04; AMD, 2010 MAR p. 1407, Eff. 6/11/10; TRANS, from 42.4.105, 2024 MAR p. 2162, Eff. 9/7/24.

Mont. Admin. R. 42.23.421 Deduction for Investment for Energy Conservation

(1) A deduction is allowed for a portion of expenditures made for the purpose of conserving energy in buildings, both residential and nonresidential, used in the taxpayer's business.

(2) This deduction must be claimed on the form provided by the department. The complete form must be attached to the taxpayer's corporate income tax return for the year in which the deduction is claimed.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-32-103, MCA
History: NEW, 1977 MAR p. 968, Eff. 11/26/77; AMD, 1995 MAR p. 2852, Eff. 12/22/95; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.422 Determination of Capital Investment for Energy Conservation

(1) In new construction no deduction is allowed for that portion of capital expense incurred in meeting established standards. In new buildings only the cost for that portion of a capital expenditure that is in excess of established standards will be entitled to a deduction in computing taxable income. The standards utilized by the department in determining allowances will be taken from the currently recognized energy building code in Montana. If Montana does not have an applicable energy building code, then national standards meeting the demands of this geographical area will be followed. The energy code or standard relied upon by the department is to be updated on an annual basis.

(2) In the improvement of existing structures a deduction will be given for capital investments that are recognized to substantially reduce the waste or dissipation of energy or reduce the amount of energy required for proper utilization of the building.

(3) Deductions will not be allowed for capital investments that are directly used in a production or manufacturing processor rendering a service to customers.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-32-103, MCA
History: NEW, 1977 MAR p. 968, Eff. 11/26/77; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.423 Types of Appropriate Investments for Energy Con - Servation Purposes

(1) The department has determined that the following capital investments are among those that can result in the conservation of energy:

(a) insulation in existing buildings of floors, walls, ceilings, and roofs;

(b) insulation in new buildings of floors, walls, ceilings, and roofs insofar as it produces an insulating factor in excess of established standards;

(d) special insulating siding with a certified insulating factor substantially in excess of that of normal siding;

(e) storm or triple glazed windows;

(f) storm doors;

(g) insulated exterior doors;

(h) caulking and weather stripping;

(i) devices which limit the flow of hot water from shower heads and lavatories;

(j) waste heat recovery devices;

(k) glass fireplace doors;

(l) exhaust fans used to reduce air conditioning requirements;

(m) replacement of incandescent light fixtures with light fixtures of a more efficient type;

(n) lighting controls with cutoff switches to permit selective use of lights;

(o) clock regulated thermostats.

(2) This is not to be considered an exhaustive list of qualifying capital investments. The department will consider other investments that substantially reduce the waste or dissipation of energy or reduce the amount of energy required for the heating, cooling, or lighting of buildings.

History

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-32-103, MCA
History: NEW, 1977 MAR p. 969, Eff. 11/26/77; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Mont. Admin. R. 42.23.424 Sale of Land to a Beginning Farmer - Corporate Income Tax Deduction

(1) A deduction from Montana net income is allowed for each sale of 80 acres or more to a beginning farmer as provided in 80-12-211, MCA, provided the sale is approved by the agricultural loan authority. The deduction is the amount that would have to be included in net income resulting from the sale, up to a maximum deduction of $50,000. The deduction will be taken each year a payment is received until the loan is paid or the deductions for all years equal $50,000.

(2) To the extent that a net operating loss is created as a result of the deduction, such loss is not available for carryover or carryback provisions.

(3) The taxpayer may claim more than one deduction as a result of sales to beginning farmers provided each sale is approved by the agricultural loan authority.

(4) For tax deduction purposes, a copy of the approval of the transaction by the agricultural loan authority must be attached to the return claiming the deduction. The department may also require additional documentation on request to establish the eligibility of the transaction for a tax deduction.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 80-12-211, MCA
History: NEW, 1984 MAR p. 392, Eff. 3/1/84; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Ch. 501, sec. 7, L. 1981
History: NEW, 1982 MAR p. 295, Eff. 2/12/82; REP, 1992 MAR p. 1764, Eff. 8/14/92.

Subchapter 42.23.6 Payment of Taxes

Mont. Admin. R. 42.23.601 Refunds and Credits

(1) For tax periods beginning after March 13, 1997, no refund or credit may be allowed or paid with respect to the year for which a return is filed, unless, within three years from the last day prescribed for filing the return or after one year from the date of the overpayment (whichever period expires later), the taxpayer files a claim for refund thereof or the department has determined the existence of the overpayment and has approved refunding or crediting thereof. The three-year period is determined without regard to any extension that may have been granted.

(2) A refund claim made after the expiration of the limitation period set forth in (1) and in 15-31-509, MCA, is limited to payments received after that date.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-509, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.602 Overdue Taxes

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-501, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; REP, 1996 MAR p. 1177, Eff. 4/26/96.

Mont. Admin. R. 42.23.603 Jeopardy Assessments

(1) Section 15-31-522 , MCA, shall be applicable to those situations where the department finds that a taxpayer designs quickly to depart from the state or the United States, to remove its property therefrom, to cancel itself or its property therein, or to do any act tending to prejudice or to render wholly or partly ineffectual proceedings to collect the tax due under Title 15, chapter 31, MCA.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-522, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82.

Mont. Admin. R. 42.23.604 Interest on Deficiencies

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-1-222, 15-31-503, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1992 MAR p. 1764, Eff. 8/14/92; REP, 1996 MAR p. 1177, Eff. 4/26/96.

Mont. Admin. R. 42.23.605 Penalty and Interest

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-1-216, 15-1-222, 15-31-502, 15-31-503, 15-31-510, MCA
History: NEW, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2002 MAR p. 1096, Eff. 4/12/02; AMD, 2006 MAR p. 85, Eff. 1/13/06; AMD, 2011 MAR p. 2053, Eff. 9/23/11; REP, 2016 MAR p. 2073, Eff. 11/11/16.

Mont. Admin. R. 42.23.606 Quarterly Estimated Tax Payments

(1) Effective for tax years beginning after December 31, 1993, every corporation must make estimated tax payments if its annual tax is $5,000 or more.

(2) The $5,000 threshold includes any applicable surtax.

(3) If the $5,000 threshold is met, the taxpayer has the option of submitting 80% of the current year's tax liability in estimated payments or 100% of last year's liability provided that the preceding taxable year was a period of 12 months and a return was filed for the preceding taxable year. By submitting four equal quarterly payments totaling 100% of last year's tax liability, a taxpayer can ensure that no underpayment interest penalty will accrue, regardless of the current year's tax liability. Corporations that file the preceding year's return as an inactive corporation, or as a Subchapter S corporation, must submit 80% of the current year's tax liability in estimated payments if the $5,000 threshold is met.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-502, MCA
History: NEW, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 1994 MAR p. 2353, Eff. 8/12/94.

Mont. Admin. R. 42.23.607 Computation of Quarterly Estimated Tax Under-Payment Interest

(1) Except as provided in (2), a taxpayer is presumed to have earned income evenly throughout the year. Accordingly, if the tax liability is $5,000 or more at the end of the year, the taxpayer is required to make estimated tax payments as described in 15-31-502, MCA. If the payments are not made in accordance with 15-31-502, MCA, the taxpayer must compute the quarterly estimated tax underpayment interest on a form provided by the department.

(2) The provisions of (1) will not apply if the taxpayer can establish that it did not earn income evenly throughout the year. To do so, the taxpayer must show on the form provided by the department when the income was earned. Approval of the calculations shown on the form rests with the department. The department may request additional information to support the calculations.

(3) If estimated payments are required and those payments are insufficient, not submitted, or are not submitted timely, the underpayment interest provided in 15-1-216, MCA, will be computed on the lessor of 80% of the current year's liability or 100% of last year's liability, provided that the last year was a period of 12 months and the corporation filed a return.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-1-216, 15-31-510, MCA
History: NEW, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 1994 MAR p. 2353, Eff. 8/12/94; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2002 MAR p. 1096, Eff. 4/12/02; AMD, 2020 MAR p. 395, Eff. 2/29/20.

Mont. Admin. R. 42.23.608 Basis for Not Waiving the Quarterly Estimated Tax Underpayment Interest

(1) A taxpayer is not immune from the quarterly estimated payment requirement if the previous year's tax liability did not equal or exceed $5,000.

(2) A taxpayer is not immune from the quarterly estimated payment requirement simply because it did not know its tax liability until the end of the year.

(3) Lack of knowledge about the estimated payment requirement is not a basis for having the underpayment interest waived.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-502, 5-31-510, MCA
History: NEW, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 1994 MAR p. 2353, Eff. 8/12/94; AMD, 2002 MAR p. 1096, Eff. 4/12/02.

Mont. Admin. R. 42.23.609 Short Period Returns

(1) Payments of estimated tax with respect to short taxable years are to be made at the times and in the amounts required for regular tax years as listed in 15-31-502 , MCA, except that any installment that is not paid before the 15th day of the last month of the short taxable year must be paid on that date. For example:

(a) Corporation X, a calendar year corporation, changes to a fiscal year starting September 1. Corporation X was required to make estimated payments for the short tax year covering the periods from January 1 through August 31. Corporation X was required to make two 25% installments of estimated tax, the first on or before April 15, and the second on or before June 15, and had to pay 50% of the estimated tax on or before August 15 (the 15th day of the last month of the short tax year) , as the last installment.

(2) If the tax period was three months or less, there would be no quarterly estimated payment requirement.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-502, MCA
History: NEW, 1992 MAR p. 1764, Eff. 8/14/92; AMD, 1994 MAR p. 2353, Eff. 8/12/94; AMD, 2001 MAR p. 2046, Eff. 10/12/01.

Subchapter 42.23.7 Limited Liability Companies

Mont. Admin. R. 42.23.701 Recognition of a Limited Liability Company

(1) The Montana Limited Liability Company Act as codified in Title 35, chapter 8, MCA, is effective for tax periods beginning on or after October 1, 1993. The taxpayer must register as a limited liability company with the Montana secretary of state before being recognized as a limited liability company by the department.

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Title 35, chapter 8, MCA
History: NEW, 1994 MAR p. 1721, Eff. 6/24/94.

Mont. Admin. R. 42.23.702 Taxation of a Limited Liability Company

(1) The taxation of a limited liability company in Montana depends upon its federal classification as a corporation or a partnership as determined by the IRS, regardless of whether an entity is recognized as a limited liability company under the Montana Limited Liability Company Act. For example, a limited liability company may be formed in Montana with one member; however, in order to be taxed as a partnership for federal purposes, and consequently for Montana purposes, the limited liability company must have at least two members. If the limited liability company is taxed as a "C" or "S" corporation for federal tax purposes, then it must file the corresponding Montana corporate income tax return with the department as provided for under Title 15, chapter 31, MCA. If a limited liability company is treated as a partnership for federal tax purposes, then it must file a partnership return reflecting each member's share of the income/loss, and also, the members must file Montana individual income tax returns reflecting their share of the income/loss of the limited liability company. These returns are to be filed with the department as provided for under Title 15, chapter 30, MCA.

(2) A copy of the limited liability company's federal return must be attached with the tax return required for Montana purposes.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-31-101, 15-30-2620, 15-31-501, MCA
History: NEW, 1994 MAR p. 1721, Eff. 6/24/94; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2016 MAR p. 2198, Eff. 11/26/16; AMD, 2020 MAR p. 395, Eff. 2/29/20.

Subchapter 42.23.8 Net Operating Losses

Mont. Admin. R. 42.23.801 Net Operating Losses

(1) The net operating loss deduction is allowed as provided in the rules contained in this subchapter.

(2)

(a) The term "net operating loss deduction" means the aggregate of the net operating loss carryovers plus the net operating loss carrybacks applicable to the taxable period.

(b) The term "net operating loss" means the excess of deductions over the gross income for a particular taxable period with the following modifications:

(i) No deduction is allowed for any net operating loss carryover or carryback from another year.

(ii) Any excess of percentage depletion over cost depletion must be added back to net income.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-114, MCA
History: Eff. 12/31/72; AMD, 2001 MAR p. 2046, Eff. 10/12/01; TRANS, from ARM 42.23.412, 2011 MAR p. 2053, Eff. 9/23/11; AMD, 2011 MAR p. 2700, Eff. 12/9/11; AMD, 2020 MAR p. 395, Eff. 2/29/20.

Mont. Admin. R. 42.23.802 Carryovers of Net Operating Losses

(1) For taxable periods beginning before January 1, 2018, a net operating loss is carried back to the third preceding taxable period from which it was incurred. Any balance remaining must be carried to the second preceding taxable period, then to the first preceding taxable period, and then forward to the next seven succeeding taxable periods in the order of their occurrence.

(2) For taxable periods beginning after December 31, 2017, a net operating loss is carried back to the third preceding taxable period from which it was incurred. Any balance remaining must be carried to the second preceding taxable period, then to the first preceding taxable period, and then forward to the next ten succeeding taxable periods in the order of their occurrence. A net operating loss carryback provided in this subsection may not exceed $500,000 per taxable period. If a combined report that is filed includes more than one entity with Montana activity, the total net operating loss carryback for all entities cannot exceed $500,000 per taxable period.

(3) When a net operating loss exceeds the net income of the year to which it is carried, the net income for such year must be adjusted by making the following modifications to determine the unused portion of the net operating loss to be carried forward:

(a) No deduction is allowed for any net operating loss carryover or carryback from another year.

(b) Any excess of percentage depletion over cost depletion must be eliminated.

(4) The taxable income as modified by the adjustments shown in (3) shall not be considered to be less than zero. The amount of the net operating loss which may be carried forward is the excess of the loss over the modified net income.

(5) A taxpayer may elect to forgo the entire carryback period. Montana corporate income tax Form CIT provides an area to perfect this election. When Form CIT is filed with the department, the election must be clearly marked in the area provided on that form. If no indication is made in the area provided on Form CIT, the net operating loss will be carried back and applied as provided in (1) and (2). For state purposes, an election to forgo a federal net operating loss carryback provision will not be accepted as a valid election.

(6) If a taxpayer files an amended Montana return under 15-31-506, MCA, and reports a net operating loss, the time to perfect the election in (5) may be extended. If the taxpayer failed to make the election on its originally filed return, and the original return reported net income, an election may be made by filing an amended return if it is clearly marked in the area provided on the return. If more than one amended return is filed for a taxable period, the election must be made on the first return reporting a net operating loss.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-119, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 1990 MAR p. 645, Eff. 3/30/90; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, 2002 MAR p. 207, Eff. 12/21/01; TRANS, from ARM 42.23.413, 2011 MAR p. 2053, Eff. 9/23/11; AMD, 2016 MAR p. 2198, Eff. 11/26/16; AMD, 2017 MAR p. 2327, Eff. 1/1/18; AMD, 2020 MAR p. 395, Eff. 2/29/20.

Mont. Admin. R. 42.23.803 Filings in Connection with Net Operating Losses

(1) Every corporation claiming a net operating loss deduction for any taxable period must file with its return for such period a schedule showing in detail the computation of the net operating loss deduction claimed.

(2) Corporations that are members of a unitary group filing a single return must use intrastate apportionment to calculate the net operating loss and net operating loss deduction for each member of the unitary group that is engaged in business in the state. A net operating loss for one member of a unitary group cannot be carried back or carried over to offset the income of another member included in the unitary group.

(a) Each member of a unitary group engaged in business in this state must calculate its individual share of the unitary group's net operating loss by applying its individual apportionment factor to the net operating loss of the unitary group.

(b) For purposes of calculating the net operating loss deduction, each member of a unitary group engaged in business in this state must calculate its individual share of the unitary group's net income by applying its individual apportionment factor to the net income of the unitary group, then applying its individual net operating loss available as calculated in (a).

(3) If a corporation has a net operating loss which when carried back to a prior taxable period results in an overpayment of tax for such taxable period, a refund may be obtained by filing an amended return for that period claiming the net accordingly. Interest does not accrue on overpayments of tax resulting from a net operating loss carryback or carryover.

(a) For tax periods beginning after March 13, 1997, claims for refund of tax resulting from a net operating loss carryback must be filed in accordance with 15-31-509, MCA.

(4) Any net operating loss carried over to any taxable years beginning after December 31, 1978, must be calculated under the provisions of 15-31-114, MCA, and the rules promulgated thereunder that are effective for the taxable year for which the return claiming the net operating loss carryover is filed.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-119, 15-31-509, MCA
History: Eff. 12/31/72; AMD, 1982 MAR p. 104, Eff. 1/29/82; AMD, 2001 MAR p. 2046, Eff. 10/12/01; AMD, and TRANS, from ARM 42.23.414, 2011 MAR p. 2053, Eff. 9/23/11; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.804 Treatment of Mergers, Consolidations, and Reorganizations

(1) In the case of a merger of corporations, the surviving corporation may not claim a net operating loss deduction for net operating losses incurred by any of the merged corporations prior to the date of merger.

(2) Similarly, in the case of a consolidation of corporations, the new corporate entity may not claim a net operating loss deduction for net operating losses incurred by the dissolved corporations prior to the date of consolidation.

(3) In the case of a corporate entity that has converted to a disregarded entity, no net operating loss deduction may be claimed for net operating losses incurred by the corporate entity prior to the date of conversion.

History

Authorizing statute(s): 15-31-501, MCA
Implementing statute(s): 15-31-114, MCA
History: Eff. 12/31/72; TRANS, from ARM 42.23.415, 2011 MAR p. 2053, Eff. 9/23/11; AMD, 2016 MAR p. 2198, Eff. 11/26/16.

Mont. Admin. R. 42.23.805 Treatment of Net Operating Losses Spanning a Change in Reporting Methods

(1) For purposes of this rule:

(a) "combined year" means a taxable period in which a corporation filed a unitary combined report as set forth in ARM 42.26.204;

(b) "water's-edge year" means a taxable period in which a corporation filed a valid water's-edge combined report as set forth in ARM 42.26.301; and

(c) "separate company year" means a taxable period in which a corporation filed as a separate and distinct entity, not as part of a unitary group.

(2) A corporation that makes a valid water's-edge election or does not renew a prior election is agreeing that unused net operating loss carryover from a water's-edge year may only be carried to a water's-edge year, and unused net operating loss carryover from a non-water's-edge year may only be carried to a non-water's-edge year. When applying the three-year carry-back, and seven-year or ten-year carry-forward limitations, provided for in 15-31-119, MCA, all taxable periods are included, even though the loss can only be deducted in those periods in which the filing method is the same.

(3) Except as provided in (2), if a corporation incurs a net operating loss and carries that loss to a year that was filed under a different filing method, the net operating loss deduction may be limited. Both the tax period in which the net operating loss is being deducted and the net operating loss must be recalculated using the correct filing method before the deduction is allowed. For example:

(a) if a corporation incurs a net operating loss in a prior separate company year, and wishes to carry that loss forward or back to a combined year and a combined return is the taxpayer's proper filing method for each period, the loss must be recalculated as if it were filed on a combined, unitary basis before being carried to the combined year; or

(b) if a corporation incurs a net operating loss in a combined year filed correctly on a unitary basis, and wishes to carry back that loss to a prior, incorrectly filed, separate company year (or other incorrect filing method), the separate company year must be recalculated as if it were filed on a combined, unitary basis before the deduction is allowed.

(4) For purposes of applying a net operating loss deduction, a taxpayer or the department may undertake the necessary corrections described in (3) even if the affected tax year has already closed via the expiration of the statute of limitations. By correcting the filing method (or net operating loss), neither the taxpayer nor the department is reopening a closed year, but rather is deriving the correct figure to use for an open-year claim.

History

Authorizing statute(s): 15-31-313, 15-31-501, MCA
Implementing statute(s): 15-31-119, MCA
History: NEW, 2011 MAR p. 2053, Eff. 9/23/11; AMD, 2016 MAR p. 2198, Eff. 11/26/16; AMD, 2017 MAR p. 2327, Eff. 1/1/18.

Chapter 42.24 Corporation License Tax - Special

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-202, MCA
History: Eff. 12/31/72; AMD, Eff. 1/2/77; AMD, 1992 MAR p. 2395, Eff. 10/30/92; REP, 2002 MAR p. 3708, Eff. 12/27/02.

Authorizing statute(s): Sec. 15-31-501, MCA
Implementing statute(s): Sec. 15-31-702, MCA
History: NEW, 1979 MAR p. 1553, Eff. 12/14/79; REP, 2004 MAR p. 1035, Eff. 4/23/04.

Chapter 42.25 Natural Resources Taxes

Subchapter 42.25.1 Metalliferous Mines Tax

Mont. Admin. R. 42.25.101 Reporting Requirements

(1) Each person mining or extracting gold, silver, copper, lead, or other metals from any mine or mining property located within this state shall assay each shipment of ore, concentrate or slimes prior to its leaving the state. These assays shall be provided to the state upon request, and records of all assays taken in conjunction with this rule shall be maintained by the taxpayer for a period of 5 years following the year in which the assays were conducted.

History

Authorizing statute(s): Sec. 15-1-201 MCA
Implementing statute(s): Sec. 15-37-104 MCA
History: NEW, 1982 MAR p. 2027, Eff. 11/11/82.

Mont. Admin. R. 42.25.102 Average Price Quotations

(1) The average price during the calendar quarter referred to in 15-37-102 MCA, is a weighted average as opposed to an arithmetic average of daily prices for each day of the quarter. The quarterly gross value will be determined by multiplying the quantity of each metal produced in each lot by the prevailing price per unit on the day the quantity is determined. In most instances this computation is reflected on the smelter returns.

History

Authorizing statute(s): Sec. 15-1-201 MCA
Implementing statute(s): Sec. 15-37-102 MCA
History: NEW, 1988 MAR p. 1815, Eff. 8/12/88.

Mont. Admin. R. 42.25.103 Market Value

(1) The market value for metals produced shall be the price quoted by an established authority or market report at the time the quantity of metals is determinable. No deductions from this price will be allowed. Market value for purposes of this tax is not dependent on the amount of actual cash payment received by the producer.

History

Authorizing statute(s): Sec. 15-1-201 MCA
Implementing statute(s): Sec. 15-37-102 and 15-37-104 MCA
History: NEW, 1988 MAR p. 2506, Eff. 10/14/88.

Mont. Admin. R. 42.25.104 Taxable Quantity

(1) For purposes of the metalliferous mines license tax all merchantable metals produced during the calendar quarter are reportable and subject to tax. The taxable quantities will normally be determined by the settlement assay agreed to by both the producer and the purchaser. Whenever title to the end product from the smelter or refinery remains with the producer, the reportable quantity will be the actual amounts recovered. No deductions will be allowed from the gross quantity produced. The taxable quantity does not depend on whether the producer receives direct payment for the entire quantity of metals contained in the ore or concentrate or whether a portion of the production is exchanged for smelting and refining services.

(2) Whenever the information needed to determine taxable quantities is not available when the tax return is due, the quantities reported must be based on the best information available on the reporting date. An adjustment must be shown on the next quarterly report correcting any errors in the estimate.

History

Authorizing statute(s): Sec. 15-1-201 MCA
Implementing statute(s): Sec. 15-37-102 and 15-37-104 MCA
History: NEW, 1988 MAR p. 2506, Eff. 10/14/88.

Subchapter 42.25.2 Metal Mines Tax

Mont. Admin. R. 42.25.201 Reporting Requirements

History

Authorizing statute(s): Sec. 15-1-201 MCA
Implementing statute(s): Sec. 15-23-802 MCA
History: NEW, 1982 MAR p. 2027, Eff. 11/11/82.

Subchapter 42.25.5 Gross Proceeds Tax on Coal Production

Mont. Admin. R. 42.25.501 Definitions

The following definitions apply to this subchapter:

(1) "Arm's-length transaction" means a contract, negotiation, or agreement between or among parties where the parties have independent interests and are not related.

(2) "Contract revenue" means the total receipts or accruals from all sales of coal during the reporting period.

(3) "FOB mine price" means contract revenue less reasonable and actual costs incurred to transport the taxable coal from the mine to a sales point remote from the mine after the coal is prepared for shipment.

(4) "Impute" means to assign a market value to coal by inference under circumstances set forth in 15-35-107, MCA.

(5) "Market value" means the value at which coal would change hands between a willing buyer and a willing seller under market and economic conditions at the time of sale, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. Agreements that are not arm's-length transactions will not be considered market value for purposes of filing the Montana coal production taxes.

(6) "Related parties" means any relationship that has the ability to influence whether each party has independent interests and could influence a party's independence in negotiating a transaction; or

(a) when any of the following circumstances exist:

(i) Affiliation. The parties are members, affiliates, subsidiaries, or any other affiliations under the same ownership of a parent entity.

(ii) Common control. The parties are, directly or indirectly, under common or joint control.

(iii) Family member. A party is a close family member of a person who is part of key management personnel or who controls another party to a transaction. A close family member is an individual's domestic partner and children, children of the domestic partner, and dependents of the individual or the individual's domestic partner.

(iv) Individual control. A party is controlled or significantly influenced by a member of key management personnel or by a person who controls another party to the transaction.

(v) Joint venture. The parties are members of a joint venture.

(vi) Key management. The parties share key management personnel.

(7) "Related-party transaction" is a contract, negotiation, or agreement between or among related parties, as defined in (6).

(a) Related-party transactions are not considered an arm's-length transaction as that term is defined in (1).

(b) If at any time the parties to an arm's-length transaction become related parties, that agreement shall be considered to be a related-party transaction from that point forward.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-701, 15-23-702, 15-23-703, MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2101, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 2009 MAR p. 2495, Eff. 12/25/09; AMD, 2013 MAR p. 180, Eff. 2/1/13; AMD, 2017 MAR p. 2204, Eff. 11/25/17.

Mont. Admin. R. 42.25.502 Filing Requirements

(1) Each year on or before March 31, all persons engaged in mining coal in this state are required to compute and file the current Department of Revenue form reflecting the preceding calendar year production. All information requested on this form must be furnished and the form must be signed by an officer of the firm mining the coal.

(2) A person who sells coal under a contract which is not an arm's-length transaction must comply with (1) and must upon request of the department furnish a copy of their federal income tax return and copies of their current sales contracts.

(3) A person who is producing coal and who uses the production in their own manufacturing and/or energy conversion process must comply with (1) and (2).

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-701, MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2102, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 2017 MAR p. 2204, Eff. 11/25/17.

Mont. Admin. R. 42.25.503 Failure to File

(1) Any person producing coal in this state must, on or before March 31 each year, file with the department of revenue a coal gross proceeds tax return for coal produced in the preceding calendar year.

(2) Any person refusing or neglecting to file after receipt of demand by the department will have the value of his coal computed by the department for gross proceeds tax purposes according to ARM 42.25.512.

History

Authorizing statute(s): Sec. 15-23-108 MCA
Implementing statute(s): Sec. 15-23-701 MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2103, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 1988 MAR p. 1539, Eff. 7/15/88.

Mont. Admin. R. 42.25.511 Determination of Contract Sales Price

(1) The contract sales price of the coal is calculated immediately after the point the coal is prepared for shipment to the first arm's-length purchaser of the coal. "Prepared for shipment" and "purchaser" are defined in 15-35-102, MCA. Contract sales price will be the calculated FOB mine price. Transportation costs that reduce the contract sales price of the coal shall not reduce the contract sales price below zero. The contract sales price will be further adjusted by deducting from either the FOB mine price or a value imputed by the department:

(a) the allowance for federal, state, and Indian royalties; and

(b) the amounts charged to the purchaser to pay taxes on production.

(2) The formula in (1) should be applied to each contract individually.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-701, 15-23-702, MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2111, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 1988 MAR p. 2405, Eff. 11/11/88; AMD, 2009 MAR p. 2495, Eff. 12/25/09; AMD, 2017 MAR p. 2204, Eff. 11/25/17.

Mont. Admin. R. 42.25.512 Imputed Valuation

(1) When imputing value pursuant to 15-35-107, MCA, the department may use valuation methods which approximate the value of the coal, including but not limited to comparable actual arm's-length sales, comparable actual arm's-length sales adjusted to FOB mine price, or published coal sales indexes. Contract term, tonnage, quality, Btu rating, and any other appropriate comparability criteria will be considered.

(2) If using comparable sales in computing value, the department will maintain the confidentiality of all comparable contract data and will use contract data provided by the producer in question whenever possible.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-701, 15-23-702, 15-35-107, 15-38-109, MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2112, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 1988 MAR p. 1540, Eff. 7/15/88; AMD, 2009 MAR p. 2495, Eff. 12/25/09; AMD, 2013 MAR p. 180, Eff. 2/1/13; AMD, 2017 MAR p. 2204, Eff. 11/25/17.

Mont. Admin. R. 42.25.513 Taxable Valuation

(1) On or before July 1 each year the department will submit taxable valuations for each operating coal mine to the department's agent in the county where the coal was produced.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-702, 15-23-703, MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2113, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.514 Right to Audit

(1) The department may examine records of coal companies, including contracts for the sale of coal, to determine whether the price of coal as reported is the result of an agreement not at arm's length. The department will, if necessary, examine operator's records as they pertain to gross proceeds, make all adjustments required, and transmit the adjustments to the department's agent in the county and to the operator.

(2) The department also has the right to summon witnesses to appear and give evidence and to produce records, books, papers, and documents relating to any matter which the department shall have the authority to investigate and determine. Records obtained from the operator shall be considered confidential.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-701, 15-23-702, 15-23-703, 15-38-109, MCA
History: NEW, Eff. 3/7/76; AMD and TRANS, from ARM 42.22.2114, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 2013 MAR p. 180, Eff. 2/1/13; AMD, 2017 MAR p. 2204, Eff. 11/25/17.

Mont. Admin. R. 42.25.515 Imputed Valuation for Coal

Publisher status: INEFFECTIVE (not currently effective).

(REPEALED)

History

Authorizing statute(s): 15-35-122, MCA
Implementing statute(s): 15-35-107, MCA
History: NEW, 1983 MAR p. 1834, Eff. 12/16/83; AMD and TRANS, from ARM 42.22.2115, 1986 MAR p. 2079, Eff. 12/27/86; AMD, 1988 MAR p. 2406, Eff. 11/11/88; AMD, 2009 MAR p. 2495, Eff. 12/25/09; REP, 2017 MAR p. 2204, Eff. 11/25/17.

Authorizing statute(s): Sec. 15-1-201 and 15-23-614, MCA
Implementing statute(s): Sec. 15-23-601, 15-23-602, 15-23-603, 15-23-607, 15-23-612, and 15-36-101, MCA
History: NEW, 1994 MAR p. 2354, Eff. 8/12/94; REP, 1996 MAR p. 2001, Eff. 7/19/96.

Subchapter 42.25.11 Net Proceeds Tax on Miscellaneous Mines

Mont. Admin. R. 42.25.1101 Definitions

(1) The following definitions apply to terms used in this sub-chapter:

(1) "After crushing" refers to after all crushing but before grinding.

(2) "Improvements and repairs" are defined as buildings and improvements to the land located at the mine site.

(3) "Mine" or "mining claim" is the location at which a mineral is produced, extracted, or quarried. The mining claim may include one or more mines depending upon ownership (single) , location, integration of mining system, and single management.

(4) "Mineral" includes precious or semiprecious stones or gems, gold, silver, lead, coal, lime rock, granite, marble, travertine, talc, phosphate, and other minerals, rock, or stone extracted from underground mines, quarries, open pits, dumps, or tailings.

(5) "Reduction works" shall include mills, crushing, washing, or treatment plants that prepare the product mined to a point where it has marketable value.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-501, 15-23-502, and 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1101, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 1988 MAR p. 1893, Eff. 8/26/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1102 Net Proceeds Tax Return

(1) A return and statement for the assessment of net proceeds must be on the form prescribed by the department and must contain the following detailed information:

(a) name and address of the owner, lessee, or operator of the mining operation;

(b) name and address of the owner of the mine if other than that of the named operator;

(c) name and address of each royalty owner and the percentage of his royalty interest or the amount per ton, or other unit, which is to be paid under the royalty agreement and the actual amount paid to each royalty owner;

(d) county in which the mining operation is located, and if the mining operation extends across county lines, the percentage of the ore or mineral extracted from each county;

(e) legal description of the location of the mining operation by section, township and range, and the school district in which it is located, and if the mining operation extends into more than one school district, the percentage of ore of mineral extracted from each school district;

(f) the total tonnage must be reported (the value of the ore in components of monetary value for each mineral must be shown) :

EXAMPLE

Total tonnage mined

oz. gold @$ per oz. $

oz. silver @$ per oz. $

lb. lead @$ per lb. $

lb. copper @$ per lb. $

tons @$ per ton $

carats @$ per carat $

Total Value

(g) deductions taken as listed and explained in ARM 42.25.1111 through 42.25.1117, and 42.25.1119;

(h) cost of transporting the product of the mining operation to the mill, smelter, or reduction works (depending on the specific operation) ;

(i) costs of operating the reduction works;

(j) costs of repairing and replacing the reduction works;

(k) assessed value of the reduction works as shown on the county tax rolls;

(l) costs of transporting the marketable product to the point of actual sale;

(m) costs of marketing the product and converting it into money;

(n) costs of construction, repairs, and improvements to the mine.

(2) No miscellaneous items will be allowed as deductions. All deductions must be itemized.

(3) Incomplete returns will not be accepted as satisfying the filing requirements.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-502, MCA
History: NEW, Eff. 4/5/74; AMD, 1986 MAR p. 1080, Eff. 6/27/86; AMD and TRANS, from ARM 42.22.1102, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1103 Valuation

(1) The department shall calculate and compute from the returns the gross product yielded from the mine and its gross value for the year covered by the return. The department shall also calculate and compute the net proceeds yielded to the mine operator. The net proceeds shall be ascertained and determined by subtracting from the gross value the deductions that are allowed to the operator of the mine. Allowable deductions are set forth in ARM 42.25.1111 through 42.25.1117.

(2) Each operator shall be notified of the assessment for each mine. The taxpayer shall be notified of any changes made by the department when auditing the net proceeds return.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-102 and 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1103, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1104 Mining Versus Non-Mining Processes

(1) The gross value of minerals subject to tax will be determined at the point where mining processes end and manufacturing or non-mining processes begin. In general, mining includes overburden removal, blasting, loading, transportation between mining processes, sorting, reduction and drying. Processes which will be considered non-mining are fine grinding, burning or calcining, blending with other materials, and treatment effecting a chemical change and packaging.

(a) The points at which mining processes end for specific minerals are listed below:

Mineral Valuation Point

Bentonite after crushing and drying

Gypsum after crushing

Limestone after crushing

Talc after crushing and sorting

Vermiculite after screening

(b) No deductions will be allowed for processing costs incurred beyond the valuation point.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-502 and 15-23-503, MCA
History: NEW, 1988 MAR p. 1983, Eff. 9/9/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1105 Computation of Gross Value

(1) Gross value for purposes of the mines net proceeds will be determined at the point where mining processes end and manufacturing or non-mining processes begin as discussed in ARM 42.25.1104.

(2) Listed in the order in which they are to be considered, gross value at the point of valuation will be determined using one of the following methods:

(a) The producer's actual sales prices for mineral products sold at the point of valuation will be considered the best evidence of value provided the sales are arm's length and represent approximately 30% of total mineral production. Sales of less than 30% of total production may be acceptable indicators of value if the sales price per unit is corroborated with other representative market data for minerals of like kind and grade. Upon request, the producer must provide documentation for this method to the department.

(b) If the producer does not have the sales information discussed in (2) (a) above, a market survey of other producers' sales of like kind and grade mineral products may be done. If this method is used, the producer must obtain market data for three or more other producers. This data must represent the results of competitive transactions in markets with a substantial number of unrelated buyers and sellers. The producer must document that all values used are for minerals of comparable quality sold in quantities approximating the producer's level of production. It may also be necessary to consider the geographic area served by the markets used for comparison. Upon request, the producer must provide all information obtained that supports this method to the department.

(c) If the information required by (2) (a) and (b) above is not available, the proportionate profits method may be used to compute a value in the absence of adequate market data. The general formula for this computation is:

Direct costs through

valuation point

Taxable value/unit = x Sales price/unit

Total direct costs

(i) Direct costs through the valuation point will include overburden removal, drilling, blasting, loading, hauling, crushing, sorting, drying, mine reclamation, production taxes and royalties and any other direct costs incurred through the valuation point.

(ii) Total direct costs will include, in addition to those noted above, all direct costs applied to the mineral products up to the point of production of the first marketable product or group of products that have not been manufactured or fabricated. These costs will typically include grinding, burning or calcining, blending with other materials and treatment effecting a chemical change.

(iii) The sales price per unit will be the weighted average price of the first marketable product or group of substantially similar products sold in significant quantities by the producer.

(iv) Only direct costs may be used in computing the cost ratio for the formula. No costs that benefit the operation as a whole or are not directly related to a specific phrase of the mining or processing of the mineral product will be included in the ratio.

(d) If warranted by an unusual situation, the department may use an alternative valuation method.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-502 and 15-23-503, MCA
History: NEW, 1988 MAR p. 2507, Eff. 11/24/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1111 Treatment of Royalties

(1) All royalties (including those considered to be nontaxable) may be deducted in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103.

(2) Each royalty interest shall be assessed at its full cash value in the same manner as net proceeds regardless of the net proceeds of the operator or whether the operator deducted the royalty to arrive at the net proceeds.

(3) The department shall transmit royalty lists to the respective local department field office in the county where the mine is located.

(4) Each royalty owner shall be notified of the royalty assessment amount as reported by the mine operator.

(5) Certain royalties are considered nontaxable and shall not be assessed. With certain exceptions as defined below, all royalties are subject to taxation.

(a) Royalties paid to the United States government, state of Montana, county, city, school district, or other political subdivision of the state are considered nontaxable.

(b) Royalties paid to Indian tribes from production on tribal land are taxable, but royalties paid to the United States government from production on allotted Indian land are nontaxable.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-505 and 15-23-507, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1111, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1112 Expenses Related to Machinery

(1) All expen-ditures for machinery may be deducted in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103.

(2) Machinery shall include all that is used in:

(a) the construction;

(b) sinking, or running of shafts, tunnels, drifts; or

(3) In open pit and quarry mining operations, heavy equipment, including shovels, draglines, dozers, graders, loaders, trucks, railroad cars, locomotives, drilling, and pumping equipment used in the actual mining area (extracting ore to point of reduction) are to be considered as costs of machinery used in extracting and mining of the mineral.

(4) Expenditures for machinery or equipment rental used in the mining operations are deductible.

(5) No expenditures for machinery including leased and rented machinery shall be allowed as a deduction unless all machinery is reported to the local department field office in which the mine is located for assessment purposes.

(6) Deductions for mining equipment shared by otherwise separate mining operations must be pro-rated to each operation. Tonnage removed, man-hours expended, or other appropriate criteria may be used to allocate the expenses.

(7) Only the actual cost to acquire machinery and the subsequent direct operating, maintenance, and insurance costs are deductible. Personal property taxes paid on machinery are not deductible. Acquisition costs may include the cost of freight and delivery, assembly, installation, testing, and startup.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1112, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 1988 MAR p. 1986, Eff. 9/9/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1113 Labor Costs

(1) Labor expenses will include amounts paid to employees, up to and including, mine and mill foremen and superintendents. No deduction will be allowed for any person or officer not actually engaged in the mining or milling operations. Labor expenses will be deductible to the extent they relate specifically to the mining and processing operations up to the point of mineral valuation for the following functions:

(a) overburden removal;

(b) drilling and blasting;

(d) hauling;

(e) crushing;

(f) washing, sorting, and screening;

(g) drying;

(h) testing to satisfy federal and state health and safety laws;

(i) plant security;

(j) assaying and sampling;

(k) reclamation;

(l) engineering and geological services performed in Montana for existing operations; and

(m) equipment maintenance.

(2) Labor expenses are not deductible for the following functions:

(a) accounting and bookkeeping;

(b) legal;

(d) engineering and geological services performed out of Montana or related to exploration;

(e) janitorial;

(f) laboratory work except as allowed in (h) and (j) above; and

(g) any other labor expenses incurred beyond the point of mineral valuation.

(3) The following items may be included in the amounts deducted for the functions listed in (1) :

(a) wages and salaries;

(b) overtime;

(d) shift differentials;

(e) payroll taxes;

(f) health and welfare benefits;

(g) safety clothing;

(h) locker and shower facilities;

(i) meal expenses;

(j) bonuses;

(k) safety training;

(l) transportation to the mine provided by employer;

(m) workers' compensation insurance; and

(n) retirement fund contributions provided for in labor contracts.

(4) Accounting records for labor expenses must be maintained by the taxpayer. These records must include contemporaneous man-hour logs for employees who do not work 100% of their time in one of the functions listed in (1) or who are involved in processing minerals both up to and beyond the point of mineral valuation.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1113, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 1988 MAR p. 2507, Eff. 11/24/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1114 Costs of Improvements and Repairs

(1) All monies expended for improvements and repairs necessary in and about the working of the mine shall be allowed as a deduction at the rate of 10% per annum for a period of 10 consecutive years. The period shall begin with the year of expenditure in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1114, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1115 Costs of Milling, Smelter, and Reduction Works

(1) All monies expended for costs of repairs and replacements of the milling and reduction works used in connection with the mine may be deducted in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103. There must not be included in this schedule any amount expended for the construction of new buildings or the purchase or installing of new machinery or apparatus that are in the nature of additions or improvements to plant or equipment. Deductions are allowable when the buildings constructed or repaired, or machinery purchased and installed, are for the sole purpose of replacing old, worn out, or obsolete buildings or machinery.

(2) If the person working the mine or deposit also operates the mill or reduction works and mills, or treats the ore or deposit, 6% of the assessed valuation for the calendar year the return represents may be deducted. However, if the mill or reduction works is used to mill or treat the ore or deposit from any other mine or mines, then the amount of the 6% assessed valuation must be apportioned so that only the proper proportionate part thereof will be included in this return.

(3) Milling and reduction expenses are either:

(a) repairs or replacements; or

(b) additions or improvements to the plant.

(4) Costs for repairs and replacements which are fully deductible when incurred may not be added to the 6% assessed valuation base.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1115, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 1988 MAR p. 1894, Eff. 8/26/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1116 Transportation Expenses

(1) Cost of transporting crude ore or deposit to mills or reduction works may be deducted in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103. Included in these amounts shall be costs actually expended for hauling, freight charges, and other expenses related directly to transporting the ore or deposit from the mine to the mill or reduction works. Transportation expenses incurred beyond the point of mineral valuation for net proceeds purposes are not deductible.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1116, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 1988 MAR p. 1988, Eff. 9/9/88.

Mont. Admin. R. 42.25.1117 Marketing, Administrative, and Other Operational Costs

(1) All expenses for supplies may be deducted in computing net proceeds as provided under ARM 42.25.1102 and 42.25.1103.

(2) Actual marketing costs directly related to the sale of mineral products processed up to the point of valuation for net proceeds purposes may be deducted. These expenses may include the applicable salesperson's salary and/or commission, technical assistance, and advertising, but only to the extent these expenses pertain specifically to the mineral product processed up to the point of valuation. Marketing expenses related to mineral products processed beyond that point may not be allocated back to mineral products that are not sold until further processing has occurred. Technical and scientific testing costs will not be considered marketing, but may be deductible if they meet the requirements of 15-23-503(1) (h) , MCA.

(3) All expenses for fire insurance, boiler and machinery insurance, and public liability insurance paid for the mine, reduction works or beneficiation process are deductible.

(4) No payments for taxes on production, license taxes, corporation, income, sales, real estate, personal property, and excise taxes may be used as a deduction.

(5) No expenses for land lease rental or for land lease holdings may be used as a deduction.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD, 1982 MAR p. 2105, Eff. 11/25/82; AMD and TRANS, from ARM 42.22.1117, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 1988 MAR p. 2507, Eff. 11/24/88.

Mont. Admin. R. 42.25.1118 General Treatment of Deductions

(1) Mines Net Proceeds, Title 15, chapter 23, part 5, MCA, as amended, provides for the ad valorem taxation of minerals as they are extracted from the ground and is intended to provide a tax in lieu of a property tax on such minerals. To determine the assessed value of the mineral, certain specific expenses are permitted as deductions from the gross value of the mineral.

(2) The purpose of the regulations is to set forth the intent of the law and its interpretation by the courts and to provide firm, unambiguous guidelines for valuing the product of a mining operation. The method followed determines the actual value of the extracted mineral and allows the deduction of just and equitable costs incurred in the actual mining, reduction, and marketing of the product.

(3) The Mines Net Proceeds law provides for limited deductions incurred at the mine location in Montana and not the broad spectrum of deductions allowed by income tax laws. These deductions are specific and should not be construed to include items not listed. The deductions may vary depending on the point of valuation of the mineral, but will never be greater than those provided by statute.

History

Authorizing statute(s): 15-23-108, MCA
Implementing statute(s): 15-23-503, MCA
History: NEW, Eff. 4/5/74; AMD and TRANS, from ARM 42.22.1118, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Mont. Admin. R. 42.25.1119 Special Deductions

(1) Fire, boiler, machinery, and public liability insurance will be allowed as a deduction to the extent that it is insurance for equipment and buildings in the mine, and equipment and buildings in the reduction works, to the extent the insurance for the reduction works is not beyond the point of valuation. No insurance costs will be allowed for offices or other administrative buildings. Where buildings are used both for administrative purposes and for the mining operation, the department will allocate, on a case-by-case basis, the costs between administration and mining. The department will allow only the insurance expenses attributable to the mining operation.

(2) The cost of welfare and retirement fund payments provided for in wage contracts shall be deductible only for those employees actually involved in the mining or reduction work up to the point of valuation.

(3) The cost of testing minerals extracted, in satisfaction of federal or state health and safety laws or regulations, will be allowed for the mines and reduction works up through the beneficiation process to the extent that the costs are incurred for testing the product to the point of valuation.

(4) The cost of security, in and around the mine and including the cost of security around the mill or reduction works in Montana, shall be deductible provided these costs are not incurred beyond the point of valuation.

(5) The cost of assaying and sampling for extracted minerals will be allowed to the extent that they are a part of processes that bring the mineral to the point of valuation.

(6) Engineering and geological services will be allowed as described in 15-23-503, MCA.

(7) The cost of labor, supplies, and equipment used to reclaim the mine site are deductible. If during the process of reclamation, other costs are incurred that result in an improvement in and about the working of the mine, those costs will be amortized over a ten-year period. The deductions provided in this section are allowable beginning in the 1985 production year.

History

Authorizing statute(s): Sec. 15-23-108, MCA
Implementing statute(s): Sec. 15-23-502 and 15-23-503, MCA
History: NEW, 1983 MAR p. 1835, Eff. 12/16/83; AMD, 1986 MAR p. 1080, Eff. 6/27/86; AMD and TRANS, from ARM 42.22.1119, 1986 MAR p. 2072, Eff. 12/27/86; AMD, 2000 MAR p. 2988, Eff. 10/27/00.

Authorizing statute(s): Sec. 15-1-201 and 15-23-614, MCA
Implementing statute(s): Sec. 15-23-601, 15-23-602, 15-23-603, 15-23-607, 15-23-612, and 1536-101, MCA
History: NEW, 1994 MAR p. 2354, Eff. 8/12/94; REP, 1996 MAR p. 2001, Eff. 7/19/96.

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-36-101, MCA
History: NEW, 1987 MAR p. 2091, Eff. 11/13/87; REP, 1996 MAR p. 2001, Eff. 7/19/96.

Subchapter 42.25.14 Severance Taxation - Local Governments

Mont. Admin. R. 42.25.1401 Semi-Annual Distribution to the Counties-Local Government Severance Tax

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-36-112, MCA
History: NEW, 1990 MAR p. 2043, Eff. 11/16/90; REP, 1996 MAR p. 2001, Eff. 7/19/96.

Mont. Admin. R. 42.25.1402 Revised Net Proceeds

Publisher status: INEFFECTIVE (not currently effective).

(Is Hereby Repealed.)

History

Authorizing statute(s): Sec. 15-1-201, MCA
Implementing statute(s): Sec. 15-36-112, MCA
History: NEW, 1990 MAR p. 2043, Eff. 11/16/90; REP, 1996 MAR p. 2001, Eff. 7/19/96.

Subchapter 42.25.15 Resource Indemnity Trust Tax

Mont. Admin. R. 42.25.1501 Definitions

The following definitions apply to this chapter:

(1) "Mineral" as used for resource indemnity trust tax purposes, means any precious stones or gems, gold, silver, copper, coal, lead, scoria, travertine, petroleum, natural gas, oil, uranium, or other nonrenewable merchantable products extracted from the surface or subsurface of the state of Montana, including sand and gravel.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-103, 15-38-105, MCA
History: NEW, Eff. 4/6/74; AMD, 1982 MAR p. 2178, Eff. 12/31/82; AMD, 1988 MAR p. 1893, Eff. 8/26/88; AMD, 2000 MAR p. 2988, Eff. 10/27/00; TRANS, from ARM 42.32.101, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.1502 Applicability

(1) Minerals which are stockpiled or otherwise placed in storage in the same form as when extracted or produced are not subject to the tax until refined, treated, or sold.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-105, MCA
History: NEW, Eff. 4/6/74; AMD, 1982 MAR p. 2178, Eff. 12/31/82; TRANS, from ARM 42.32.102, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.1503 Computation of Tax

(1) The resource indemnity trust tax is computed on the gross value of the mineral at the time of extraction from either the surface or subsurface of the earth.

(2) Producers may not reduce gross value for any costs or expenses of bringing minerals to mine mouth.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-105, MCA
History: NEW, Eff. 4/6/74; AMD, 1982 MAR p. 2178, Eff. 12/31/82; TRANS, from ARM 42.32.103, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.1504 Responsibility for Filing Forms and Paying Tax

(1) Preparation and filing of the resource indemnity trust tax statement of gross yield and payment of the tax due is the direct and sole responsibility of every individual, partnership, firm, association, joint stock company, syndicate, or corporation who engages in or carries on the business of mining, extracting, or producing a mineral, as defined in Title 15, chapter 38, MCA.

(2) This responsibility may not be delegated or transferred to the owner of the property from which minerals are extracted or produced, if different from the producer, or to the purchaser of the minerals.

(3) A producer who has filed a metal mines license tax return pursuant to Title 15, chapter 37, part 1, MCA, does not also need to file a resource indemnity trust return. Not filing a resource indemnity trust return does not relieve the producer from the obligation to pay the tax. A producer of gold, silver, copper, lead, or any other metal or metals or precious or semiprecious gems or stones who does not file a metal mines license return must file a resource indemnity trust tax return.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-104, MCA
History: NEW, Eff. 4/6/74; AMD, 1992 MAR p. 1766, Eff. 8/14/92; TRANS, from ARM 42.32.104, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.1505 Supplemental Information

(1) Attachments may be made to the resource indemnity trust tax statement of gross yield if space is not adequate on the form to provide complete information. Companies using data processing equipment may provide computer printouts to supply the production information if columns and/or totals are properly identified.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-105, MCA
History: NEW, Eff. 4/6/74; AMD, 1992 MAR p. 1766, Eff. 8/14/92; TRANS, from ARM 42.32.105, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.1506 Minimum Tax and Annual Exemption

(1) The minimum annual tax of $25 is due only once each year from each individual, partnership, firm, association, joint-stock company, syndicate, or corporation who engages in or carries on the business of mining, extracting, or producing a mineral. Likewise the $5,000 reduction of gross value of product may be claimed only once each year by a producer.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-104, MCA
History: NEW, Eff. 4/6/74; AMD, 1992 MAR p. 1766, Eff. 8/14/92; TRANS, from ARM 42.32.106, 2013 MAR p. 180, Eff. 2/1/13.

Mont. Admin. R. 42.25.1507 Computation of Gross Value

(1) For all minerals except oil and gas, gross value of product for purposes of the resource indemnity trust tax will be determined at the time of extraction from the ground. The time of extraction is after loading the raw mineral product and before any hauling or transportation occurs.

(2) Gross value of product at the time of extraction will be determined using one of the following methods for each product produced as noted:

(a) For coal, the gross value of the product is the "contract sales price" for the coal severance as stated in 15-35-102, MCA, times the tons produced; except the tonnage exemption defined in 15-35-103, MCA, cannot be claimed in computing the resource indemnity trust tax.

(i) If the department imputes a value for coal pursuant to 15-35-107, MCA, the same imputed value will be used in computing the resource indemnity trust tax.

(b) For talc, the gross value of the product is the tons produced in the year for which a return is filed times the value stated in 15-23-515, MCA.

(c) For vermiculite, the gross value of the product is the tons produced in the year for which a return is filed times the value stated in 15-23-516, MCA.

(d) For gold, silver, copper, lead, or any other metal or metals, or precious, semiprecious gems or stones, of any kind for which a resource indemnity trust tax return is filed, the gross value of the product is the "receipts received" as defined in 15-23-801, MCA.

(e) For lime rock, granite, marble, travertine, phosphate, bentonite, barite and other minerals, rock or stone extracted from underground mines, quarries, or open pits, gross value at the time of extraction will be determined using one of the following methods which are listed in the order they are to be considered:

(i) The producer's actual sales prices for mineral products sold at the time of extraction will be considered the best evidence of value provided the sales are arm's length and represent more than 30 percent of total mineral production. Sales of less than 30 percent of total production may be acceptable indicators of value if the sales price per unit is corroborated with other representative market data for minerals of like kind and grade. Upon request, the producer must provide documentation for this method to the department.

(ii) If the producer does not have the sales information discussed in (2)(e)(i) above, a market survey of other producers' sales of like kind and grade mineral products may be done. If this method is used, the producer must obtain market data for three or more other producers. This data must represent the results of competitive transactions in markets with a substantial number of unrelated buyers and sellers. The producer must document that all values used are for minerals of comparable quality sold in quantities approximating the producers level of production. It may also be necessary to consider the geographic area served by the markets used for comparison. All information obtained by the producer to support this method must be provided to the department on request.

(iii) If the information required by (2)(e)(i) or (ii) above is not available, the proportionate profits method may be used to compute a value in the absence of adequate market data. The general formula for this computation is stated below.

Direct costs through

extraction

Taxable value/unit = ____________________ x Sales price/unit

Total direct costs

(A) Direct costs through extraction will include overburden removal, drilling, blasting, loading, mine reclamation, royalties and any other direct costs incurred through the loading process.

(B) Total direct costs will include, in addition to those noted above, all direct costs applied to the mineral products up to the point of production of the first marketable product or group of products that have not been manufactured or fabricated. These costs will typically include hauling, sorting, crushing, grinding, drying, smelting, refining, etc. Final reclamation costs related to dismantling facilities may also be included in total direct costs.

(C) The sales price per unit will be the weighted average price of the first marketable product or group of substantially similar products sold in significant quantities by the producer. The first marketable product or group of products will not include manufactured products. For example, a cement producer must use the sales price of bulk cement not the price of concrete blocks he may manufacture from the cement.

(D) Only direct costs may be used in computing the cost ratio for the formula. No costs that benefit the operation as a whole or are not directly related to a specific phase of the mining or processing of the mineral product will be included in the ratio.

(iv) The department may use an alternative valuation method if warranted by an unusual situation.

(3) For oil and gas, gross value of product for the purposes of the resource indemnity trust tax will be determined at the time of extraction at the wellhead. The gross value of product is the total value of all petroleum and other mineral or crude oil or natural gas produced each year. The value is determined by taking the total number of barrels or cubic feet produced each month during such year at the average value at the mouth of the well during the month the product is produced. However, the total value shall be reduced for royalties paid to the United States, the state of Montana, Indians, Indian tribes, a county, or municipal government.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-38-104, 15-38-105, MCA
History: NEW, 1988 MAR p. 2411, Eff. 11/11/88; AMD, 1992 MAR p. 1766, Eff. 8/14/92; AMD, 2000 MAR p. 2988, Eff. 10/27/00; TRANS, from ARM 42.32.107, 2013 MAR p. 180, Eff. 2/1/13.

Subchapter 42.25.16 Electrical Energy Production Tax

Mont. Admin. R. 42.25.1601 Electrical Energy Producer's License Tax: Line Loss

(1) Deductions from total kilowatt hours generated will be allowed only for actual and necessary plant use. No deduction is allowed for any line losses.

History

Authorizing statute(s): 15-1-201, MCA
Implementing statute(s): 15-51-101, MCA
History: NEW, 1986 MAR p. 123, Eff. 1/31/86.

Subchapter 42.25.17 Coal Severance Tax

Mont. Admin. R. 42.25.1701 Definitions

The following definitions apply to this subchapter:

(1) "Arm's-length transaction" means a contract, negotiation, or agreement between or among parties where the parties have independent interests and are not related.

(2) "Contract revenue" means the total receipts or accruals from all sales of coal during the reporting period.

(3) "FOB mine price" means contract revenue less reasonable actual costs incurred to transport the taxable coal from the mine to a sales point remote from the mine after the coal is prepared for shipment.