The following guidelines provide background information on the most common types of filings and the related exemptions in Montana.
In this state, charitable solicitation registration is no longer required, as of October 16, 2019. Be sure to review other state registration and tax requirements, and stay apprised of updates by visiting the applicable state agency’s website. (Links are provided below in the “Helpful Links” section.)
This state does not require organizations to post specific language when conducting charitable solicitations.
Not applicable, but see Charitable Trust Statute Mont. Code Ann. § 72-38-405
Depending on the type and volume of activities an organization has in this state, the organization may need to register as an out-of-state business (sometimes called a “foreign business”) with the secretary of state or another state agency. Not every out-of-state organization needs to register. An attorney can assist the organization in determining whether its connections with this state are significant enough to trigger the foreign business registration requirement. Examples of activities which might trigger this requirement include having employees physically located in the state, conducting programs in the state, and having an office in the state. Montana state law also provides examples of activities that do not constitute doing business for purposes of the registration requirement.
In this state, organizations which have received recognition of federal income tax exemption are also exempt from the state income tax. However, to receive this exemption, organizations doing business in the state must apply. The exemption is not automatic. Information on applying for the state income tax exemption is available on the Montana Department of Revenue website. If you aren’t sure if your organization is “doing business in” Montana, you can complete this nexus questionnaire from the Montana Department of Revenue. Although an organization may be exempt, if it has unrelated business taxable income (UBTI) that is subject to federal taxation, that UBTI will be subject to Montana’s income tax. (See Montana Code Ann. § 15-31-102.)
It is also important to consider whether applying for other tax exemptions would be appropriate for your organization. As of January 6, 2021, Montana does not have sales tax. However, Montana does impose a property tax. Information on property tax exemption is available from the Montana Department of Revenue. An accountant or attorney can provide specific answers to questions regarding your organization’s eligibility for exemption.
This state does not have a corporate franchise tax.
Chase Giacomo, Esq.
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