Montana Business Taxes at a Glance
Montana is one of the few states with no general sales tax, but it does have an individual income tax, a corporate tax, local resort taxes, and taxes on lodging and rental vehicles. Recent reforms changed how Montana income tax is calculated, and new property tax rules take effect in 2026. BOMCAS helps Montana individuals and businesses understand these changes and file correctly.
Individual Income Tax After Reform
Montana reformed its individual income tax starting with the 2024 tax year. The calculation now starts from federal taxable income, rather than building its own deductions from scratch, and the state moved to a two-rate structure with a separate, lower rate schedule for net long-term capital gains. Further rate reductions took effect in 2026, and the Legislature also expanded Montana's earned income tax credit.
Because the starting point is federal taxable income, federal changes now flow more directly into the Montana return, with Montana-specific additions and subtractions. We prepare Montana returns, reconcile them to the federal return, and plan estimated payments for owners and investors.
Corporate License Tax and Pass-Through Entities
Montana taxes C corporations through its corporate income tax, also called the corporate license tax, with a minimum tax. Multistate corporations apportion income to Montana, and Montana allows a water's-edge election under specific conditions.
Partnerships and S corporations file information returns and may need to withhold or pay composite tax for nonresident owners. Because many Montana businesses have owners living out of state, especially in ranching, real estate, and tourism, these nonresident rules matter. We prepare entity returns and handle owner reporting.
No Sales Tax, but Lodging, Rental Car, and Resort Taxes
Montana shoppers do not pay a general sales tax. But several targeted taxes apply:
- Lodging taxes: hotels, motels, campgrounds, guest ranches, and short-term rentals charge a state lodging facility use tax and sales tax on accommodations
- Rental vehicle tax: a state sales tax on base rental charges for rental vehicles
- Resort taxes: certain resort communities and areas, such as some towns near ski areas and national parks, levy a local resort tax on lodging, restaurants, and luxury goods, with local rules and filing
Short-term rental owners near Glacier, Yellowstone, and the ski areas often owe several of these at once. Some platforms collect state lodging taxes for hosts, but local resort taxes may still need separate filing. We help owners register and file correctly.
Property Tax Changes for 2026
Montana's 2025 Legislature restructured residential property tax. Beginning with the 2026 tax year, owner-occupied homes and long-term rentals that qualify may receive lower tiered rates, while second homes and other residential property face a higher rate. Owners need to make sure their property is correctly classified with the Department of Revenue.
Businesses report business equipment, and an exemption removes many smaller businesses from equipment tax. We keep fixed asset registers that support property reporting as well as federal depreciation.
Payroll and Workers’ Compensation Options
Montana employers withhold state income tax and register with the Department of Labor & Industry for unemployment insurance. Workers' compensation can be purchased from private insurers or the Montana State Fund. Agricultural and seasonal employers have their own rules for unemployment coverage. We run payroll, file quarterly reports, and reconcile wages with the books.
Agriculture and Ranching
Agriculture is a large part of Montana's economy. Farm and ranch clients need:
- Livestock and grain inventory records
- Federal farm reporting, including income averaging and farm program payments
- Equipment depreciation schedules
- Records for agricultural land classification on property tax
Selling Land, a Ranch, or a Business
Montana taxes net long-term capital gains under a separate rate schedule from ordinary income. When a family sells land, a ranch, or a business, the Montana tax depends on how much of the gain is long-term capital gain, how much is depreciation recapture or ordinary income, and how the price is allocated among assets. Installment sales spread the gain over several years. We help sellers estimate the federal and Montana tax before a sale and prepare the returns that follow.
Tourism, Outfitters, and Seasonal Businesses
Outfitters, guides, lodges, and restaurants near the parks and ski areas earn most of their revenue in short seasons. They need cash flow planning for the off-season, accurate lodging and resort tax filings, and payroll for seasonal staff, including workers from other states.
Moving to Montana and Remote Work
Many people relocated to Montana in recent years, including remote workers who still earn income from employers in other states. Montana taxes residents on all income, with credits for tax paid to other states in some cases. In the year of a move, part-year returns are needed in both states. We help organize the timeline and records.
Montana has also been used by out-of-state residents to register vehicles through Montana entities. Other states have pursued residents who do this to avoid their own taxes and fees. We point out these risks when reviewing an entity, but legal questions belong with your attorney.
Bookkeeping for Montana Businesses
Montana businesses need books that separate lodging and rental revenue for state taxes, track resort-area sales for local taxes, and record nonresident owner income for entity returns. We provide monthly bookkeeping, reconciliations, and year-end financial statements set up for these purposes.
Contacting BOMCAS About Montana
Short-term rental owners near the parks, ranch families planning a sale, and new residents filing under Montana's reformed income tax can contact BOMCAS for a remote review. Pages for individual Montana cities and services will follow under this section. See the BOMCAS home page and our United States services for more about the firm. This page explains Montana's system generally and does not determine how it applies to you.
Talk to BOMCAS About Your Montana Taxes
Have a question about your Montana filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.