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Federal Tax Reform – 965 Income, GILTI, and FDII

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Federal Tax Reform – 965 Income, GILTI, and FDII

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Montana Corporate Income Tax Treatment of International Tax Provisions under Tax Cuts and Jobs Act of 2017

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The Tax Cuts and Jobs Act (TCJA) was enacted on December 22, 2017. The TCJA, in part, makes significant changes to the taxation of foreign-sourced income earned by U.S. corporations and their foreign subsidiaries. The following provides guidance on the treatment for Montana Corporate Income Tax purposes of Internal Revenue Code (IRC) §§ 965 (deemed repatriation of foreign dividends); 951A and 250 (global intangible low-taxed income [GILTI] and the GILTI deduction); and 250 (Foreign-Derived Intangible Income [FDII]). This guidance applies to the 2017 and subsequent tax years.

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IRC §965 – Deemed Repatriation of Foreign Income

The TCJA requires a mandatory “deemed repatriation of deferred foreign earnings” as Subpart F income. IRC §965 requires certain foreign corporations to add to Subpart F income the greater of their accumulated post-1986 deferred foreign earnings and profits, and deficits of certain foreign corporations (IRC §965 Inclusion Income). These taxpayers are then able to deduct a portion of the IRC §965 Inclusion Income (IRC §965 Deduction). While the deemed repatriation is required to be reported in the 2017 tax year, a taxpayer may make a federal election to pay the liability over eight years. Corporations that have IRC §965 income must include an IRC §965 Transition Tax Statement (Transition Tax Statement) with their federal return.

All taxpayers must treat IRC §965 Inclusion Income as Subpart F income for Montana purposes and attach federal Form 965 (Transition Tax Statement) to their Montana return. Any §965 income recognized as IRC §78 gross up for federal purposes will also be recognized as §78 gross up income for Montana purposes.

Water's Edge Filers

Tax Year 2017

To properly reflect the §965 inclusion income on the Montana return for taxpayers who file on a water’s edge basis, add the total amount of income reported on line 1 of federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” §15-31-325(4), MCA, allows a corresponding deduction as a foreign dividend deduction on Montana Form CIT, page 3, line 3g “other reductions” totaling 80% of the §965 inclusion income added back for Montana purposes.

However, if any of the §965 inclusion income included in “other additions” is received from subsidiaries included in the Montana water’s edge filing, such as those incorporated in tax haven countries listed in §15-31-322, MCA, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than 80%. This amount should be reported on page 3, line 3g “other reductions.”

Furthermore, if any of the §965 inclusion income included in “other additions” is received by 80/20 companies, a 100% deduction of the total amount of inclusion income related to these entities is allowed rather than 80% pursuant to §15-31-322, MCA. This amount should be reported on page 3, line 3g “other reductions.”

To properly reflect §78 gross up income related to the §965 income on the Montana return for taxpayers who file on a water’s edge basis, add the total amount of income reported on line 4a of the federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” Pursuant to §15-31-325(5), MCA, a 100% corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included in “other additions.”

Tax Year 2018

The §965 inclusion income is already properly reflected in federal taxable income, line 28 of federal Form 1120. The §965 inclusion income received by members of the Montana water’s edge group will not require a state addback. Pursuant to §15-31-325(4), MCA, a corresponding deduction is allowed as a foreign dividend deduction on Montana Form CIT, page 3, line 3g “other reductions” totaling 80% of the §965 inclusion income received by members of the Montana water’s edge group (figured without regard to any §78 gross up income). This deduction is allowed rather than the amount shown on federal Form 1120, Schedule C, line 15, column c. §78 gross up that is included in the calculation of §965 inclusion income must be removed from the §965 deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.

However, if any of the §965 inclusion income is received from subsidiaries included in the Montana water’s edge filing, such as those incorporated in tax haven countries listed in §15-31-322, MCA, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than 80%. This amount should be reported on page 3, line 3g “other reductions.”

Income of 80/20 companies is excluded from the calculation of Montana taxable income on Montana Form CIT, page 3, line 3e; consequently, §965 inclusion income, including any §78 gross up, received by an 80/20 company is already properly excluded so no deduction is allowed.

§78 gross up income related to the §965 income is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana water’s edge group will not require a state addback. Pursuant to §15-31-325(5), MCA, Montana water’s edge filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to §965 income is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana water’s edge group.

Worldwide Filers

Tax Year 2017

To properly reflect the §965 inclusion income on the Montana return for taxpayers who file on a worldwide basis, add the total amount of income reported on line 1 of the federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” A corresponding deduction is allowed as an intercompany dividend elimination on Montana Form CIT, page 3, line 3g “other reductions” totaling 100% of the §965 inclusion income added back for Montana purposes.

If any of the §965 inclusion income is received from subsidiaries that are not included in the Montana worldwide filing, see instructions for Limited Combination filers below.

To properly reflect §78 gross up income related to the §965 income on the Montana return for taxpayers who file on a worldwide basis, add the total amount of income reported on line 4a of the federal Form 965 on Montana Form CIT page 3, line 2i “other additions.” A 100% corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included in “other additions.”

Tax Year 2018

The §965 inclusion income is already properly reflected in federal taxable income, line 28 of federal Form 1120. The §965 inclusion income received by members of the Montana worldwide group will not require a state addback. A corresponding deduction is allowed as an intercompany dividend elimination on Montana Form CIT, page 3, line 3g “other reductions” totaling 100% of the §965 inclusion income received from members of the Montana worldwide group (figured without regard to any §78 gross up income). This deduction is allowed rather than the amount shown on federal Form 1120, Schedule C, line 15, column c. §78 gross up that is included in the calculation of §965 inclusion income must be removed from the §965 deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.

§78 gross up income related to the §965 income is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana worldwide group will not require a state addback. A deduction is allowed to Montana taxpayers filing on a worldwide basis for 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to §965 income is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana worldwide group.

If any of the §965 inclusion income is received from subsidiaries that are not included in the Montana worldwide filing, see instructions for Limited Combination filers below.

Separate Company, Domestic or Limited Combination Filers

Tax Year 2017

To properly reflect the §965 inclusion income on the Montana return for taxpayers who file on a separate company, domestic or limited combination basis, add the total amount of income reported on line 1 of the federal Form 965 that was received by the entity or group of entities included in the Montana return. This amount should be reported on Montana Form CIT page 3, line 2i “other additions.” A corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on line 3 of the federal Form 965 that are associated with the entity or group of entities included in the Montana return.

However, if any of the §965 inclusion income is received from subsidiaries that are included in the Montana limited combination filing, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than the amount reported on federal Form 965.

To properly reflect §78 gross up income related to the §965 income on the Montana return for taxpayers who file on a separate company, domestic or limited combination basis, add the total amount of income reported on line 4a of the federal Form 965 that is received by the entity or group of entities included in the Montana return, on Montana Form CIT page 3, line 2i “other additions.” A 100% corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included in “other additions.”

Tax year 2018

The §965 inclusion income is already properly reflected in federal taxable income, line 28 of federal Form 1120. The §965 inclusion income will not require a state addback. A corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on federal Form 1120, Schedule C, line 15, column (c) that are received from the entity or group of entities included in the Montana return (figured without regard to any §78 gross up income). This deduction is allowed rather than the amount shown on federal Form 1120, Schedule C, line 15, column c. §78 gross up that is included in the calculation of §965 inclusion income must be removed from the §965 deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.

However, if any of the §965 inclusion income is received from subsidiaries that are included in a Montana limited combination filing, a 100% deduction of the total amount of inclusion income related to these entities is allowed as an intercompany dividend elimination rather than the amount reported on federal Form 1120, Schedule C.

§78 gross up income related to the §965 income is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income will not require a state addback. A deduction is allowed to Montana taxpayers for 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to §965 income is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by the entity or group of entities included in the Montana return.

IRC §951A – Global Intangible Low-Taxed Income (GILTI) and IRC §250 GILTI deduction

Beginning with tax year 2018, the TCJA created this new category of foreign income under IRC §951A. GILTI requires the U.S. owner of a CFC to potentially include a portion of the CFC’s earnings in the U.S. owner’s federal taxable income. As deemed income to the U.S. owner, GILTI is comparable to Subpart F income. The TCJA also created a deduction related to the GILTI under IRC §250 (GILTI deduction).

For Montana Corporate Income Tax purposes, Montana considers GILTI a foreign dividend that is included in the owner’s federal taxable income. All taxpayers must attach federal Form 8992 (U.S. Shareholder Calculation of GILTI) and federal Form 8993 (§250 Deduction for FDII and GILTI) to their Montana return. Any GILTI recognized as IRC §78 gross up for federal purposes will also be recognized as §78 gross up income for Montana purposes.

Water's Edge Filers

Tax Year 2018

The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. Pursuant to §15-31-325(4), MCA, a corresponding deduction is allowed as a foreign dividend deduction. The allowable deduction totals 80% of GILTI received by members of the Montana water’s edge group, figured without regard to any §78 gross up income included in the federal calculation. The deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions.” This deduction is allowed rather than the amount shown on federal Form 1120, Form 8993, Part IV, line 9. §78 gross up that is included in the calculation of GILTI must be removed from the GILTI deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.

If any of the GILTI is received from subsidiaries included in the Montana water’s edge filing, such as those incorporated in tax haven countries listed in §15-31-322, MCA, a 100% deduction of the total amount of GILTI (figured without regard to any §78 gross up income included in the federal calculation) related to these entities is allowed as an intercompany dividend elimination rather than 80%. This amount should be reported on page 3, line 3g “other reductions.”

§78 gross up income related to GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana water’s edge group will not require a state addback. Pursuant to §15-31-325(5), MCA, Montana water’s edge filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to GILTI is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana water’s edge group.

Income of 80/20 companies is excluded from the calculation of Montana taxable income on Montana Form CIT, page 3, line 3e; consequently, any of the GILTI received, including §78 gross up associated with the GILTI, by an 80/20 company is already properly excluded so no deduction is allowed.

Worldwide Filers

Tax Year 2018

The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. A corresponding deduction is allowed as an intercompany dividend elimination. The allowable deduction totals 100% of GILTI received from members of the Montana worldwide group, figured without regard to any §78 gross up income included in the federal calculation. The deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions.” This deduction is allowed rather than the amount shown on federal Form 1120, Form 8993, Part IV, line 9. §78 gross up that is included in the calculation of GILTI must be removed from the GILTI deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.

§78 gross up income related to GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income received by members of the Montana worldwide group will not require a state addback. Montana worldwide filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to GILTI is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana worldwide group.

If any of the GILTI is received from subsidiaries that are not included in the Montana worldwide filing, see instructions for Limited Combination filers below.

Separate Company, Domestic or Limited Combination Filers

Tax Year 2018

The GILTI is already properly reflected in federal taxable income, line 28 of federal Form 1120. No state addback is required. A corresponding deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on federal Form 1120, Form 8993, Part IV, line 9 (figured without regard to any §78 gross up income included in the federal calculation) associated with the entity or group of entities included in the Montana return. §78 gross up that is included in the calculation of GILTI must be removed from the GILTI deduction allowable for Montana purposes, as the gross up deduction is calculated elsewhere as described below.

However, if any of the GILTI is received from subsidiaries that are included in the Montana limited combination filing, a 100% deduction of the total amount of GILTI (figured without regard to any §78 gross up income) related to these entities would be allowed as an intercompany dividend elimination rather than the amount reported on federal Form 8993.

Any §78 gross up income related to GILTI received from the entity or group of entities included in the Montana return is already properly reflected in federal taxable income, line 28 of federal Form 1120. This gross up income will not require a state addback. Montana filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to GILTI is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by the entity or group of entities included in the Montana return.

IRC §250 – Deduction for Foreign Derived Intangible Income (FDII)

For tax years beginning after December 31, 2017, the TCJA created this new deduction for corporations under IRC §250. The deduction relates to certain federal taxable income to which a special federal tax rate is intended to apply. FDII is not considered a foreign dividend for Montana Corporate Income Tax purposes. To claim a deduction for FDII, all taxpayers must attach federal Form 8993 (§250 Deduction for FDII and GILTI) to their Montana return.

Water's Edge Filers

Tax Year 2018

FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. A deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount reported on federal Form 1120, Form 8993, Part IV, line 8 (figured without regard to any §78 gross up income included in the federal calculation) that represents amounts related to those entities included in the Montana water’s edge group. §78 gross up that is included in the calculation of the §250 FDII deduction must be removed from the calculation for Montana purposes, as the gross up deduction is calculated elsewhere for Montana purposes as described below.

§78 gross up income related to FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. Pursuant to §15-31-325(5), MCA, Montana water’s edge filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to FDII is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana water’s edge group.

If any of the federal FDII deduction is related to entities excluded from the Montana water’s edge group, such as an 80/20 company, the deduction from federal Form 1120, Form 8993, Part IV, line 8 attributable to these entities is not allowed, as the income related to these entities has already been excluded.

Worldwide Filers

Tax Year 2018

FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. A deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount reported on federal Form 1120, Form 8993, Part IV, line 8 (figured without regard to any §78 gross up income included in the federal calculation) that represents amounts related to those entities included in the Montana worldwide group. §78 gross up that is included in the calculation of the §250 FDII deduction must be removed from the calculation for Montana purposes, as the gross up deduction is calculated elsewhere for Montana purposes as described below.

§78 gross up income related to FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. Montana worldwide filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to FDII is included in this allowable deduction. The total Montana gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by members of the Montana worldwide group.

If any of the federal FDII deduction is related to entities excluded from the Montana worldwide filing, see instructions for Limited Combination filers below.

Separate Company, Domestic or Limited Combination Filers

Tax Year 2018

FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. A deduction is allowed on Montana Form CIT, page 3, line 3g “other reductions” totaling only those amounts reported on federal Form 1120, Form 8993, Part IV, line 8 (figured without regard to any §78 gross up income included in the federal calculation) that represents amounts related to the entity or group of entities included in the Montana return. §78 gross up that is included in the calculation of the §250 FDII deduction must be removed from the calculation for Montana purposes, as the gross up deduction is calculated elsewhere for Montana purposes as described below.

§78 gross up income related to FDII is already properly reflected in federal taxable income, line 28 of federal Form 1120. Montana filers are allowed a deduction of 100%, but not more than 100%, of the §78 gross up that has been included in apportionable income. The §78 gross up related to FDII is included in this allowable deduction. The Montana total gross up deduction should be reported on Montana Form CIT, page 3, line 3g “other reductions” totaling the amount included on federal Form 1120, Schedule C, line 18, column (a) that represents amounts received by the entity or group of entities included in the Montana return.

If any of the federal FDII deduction is related to entities excluded from the Montana domestic or limited combination filing, the deduction from federal Form 1120, Form 8993, Part IV, line 8 attributable to these entities is not allowed, as the income related to these entities has already been excluded.

Medical Marijuana Provider Tax

Quick Information

Due Dates

First Quarter
April 15
Second Quarter
July 15
Third Quarter
October 15
Fourth Quarter
January 15

Fees

4% of Gross Sales

Related Resources

Medical marijuana providers pay a 2% tax on gross marijuana and marijuana products sales.

Fees

Montana charges a 4% tax on marijuana and marijuana products sales beginning October 1, 2019. Previous sales were charged a 2% tax.

The tax applies to the gross retail price when a product is:

  • Sold
  • Exchanged
  • Bartered
  • Gifted
My Revenue Logo

Due Dates

The Medical Marijuana Provider Tax Return is due on the 15th of the next month following the end of the quarter:

First Quarter
April 15
Second Quarter
July 15
Third Quarter
October 15
Fourth Quarter
January 15

Reporting and Payment Options

Providers file their Medical Marijuana Provider Tax Return in My Revenue.

Pay Online

You can pay online using My Revenue when you file your Medical Marijuana Provider Tax Return or after you file your return, using the Medical Marijuana Provider Tax Payment Voucher.

Mail a Check or Money Order

Mail checks and money orders along with your Medical Marijuana Provider Tax Payment Voucher to:

Montana Department of Revenue
PO Box 6169
Helena, MT 59604-6309

Make a Cash Payment

We only accept cash payments at our drop box in Helena:

Montana Department of Revenue
340 N. Last Chance Gulch
Helena, MT 59601

Monday through Friday, 9:00 AM to 4:00 PM

Get Directions

All cash payments must be in a tamper-evident deposit bag no larger than 11″ x 13″.

Multiple bags may be used if needed. Bags may be purchased online at numerous locations and office supply stores.

  1. Print a Medical Marijuana Provider Tax Payment Voucher
  2. Include a copy of the voucher in each deposit bag
  3. Write your name and Provider ID on each deposit bag

To maintain the accuracy of your deposit, please sort cash by denomination and face all bills in the same direction. We will not accept any mutilated or contaminated currency.

Exact amount is required. The department is not equipped to provide change.

Sample Deposit Bag

Penalties and Interest

The Medical Marijuana Provider Tax is subject to uniform penalties and interest.

Frequently Asked Questions

Am I required to file a Medical Marijuana Providers Tax Return if I have no sales for the quarter?

Yes. You must still submit a tax return on My Revenue for zero dollar returns.

What is taxed by the Medical Marijuana Providers tax?

All gross sales of marijuana and marijuana infused products are taxable.

The tax is on the gross retail price, which is the established price for which a marijuana product is sold to a purchaser before any discount or reduction.

“Sale” or “sell” means any transfer of marijuana products for consideration, exchange, barter, gift, offer for sale, or distribution in any manner or by any means.

Can I change my established retail price for medical marijuana?

Yes, if you change your price and that price is offered to all customers, that is the new established retail price.

The established retail price and any changes to that price should be documented and maintained in your records.

Can I offer a reduced price for bulk purchases of medical marijuana?

Yes, if the bulk price is consistent, documented and offered to all customers.

How do I calculate the tax on discounts to individual medical marijuana customers?

The tax will be applied on the established retail price for the product. Discounts for a group or individual do not change the established retail price.

Products priced below the established price for a select demographic is considered a reduction price, tax must be applied to the established retail price.

Can I reduce the price for aged product?

Yes, if the new price is offered to all customers that is the new established price.

Will I be taxed on bad debt sales (sales deemed uncollectible)?

Yes, the medical marijuana tax is calculated on the Marijuana product provider’s gross sales.

Can I claim a reduction on my Medical Marijuana Return for using higher value products or superior production techniques?

No, the law does not provide for exemptions or reductions of medical marijuana tax for cost of goods sold.

Will I be taxed on complimentary marijuana or marijuana infused products I give away?

Yes, the complimentary gifts are taxed at the established retail price.

Will the Department of Revenue accept payment from another entity on behalf of the taxpayer?

Yes, we can accept payment for taxes on behalf of another entity if the payment is properly directed by payee.

If I am a registered cardholder that cultivates my own product, am I subject to medical marijuana taxation?

No, the taxpayer is the Licensed Providers. If you only cultivate for personal use this is not taxable, being a licensed provider for additional cardholders is a taxable relationship.

If I am a guardian and registered provider for a minor, are those transactions taxable?

No, in this situation the law provides that the guardian as the registered provider is responsible for the control of the product and this would not create a taxable situation. If the product is purchased from a licensed provider who is not the guardian of the minor, this does create a taxable transaction.

If I offer product on credit, when is the tax reported?

The tax is reported in the quarter the transfer of product occurred.

Do I need a license separate from my medical marijuana license to sell vapor products or tabacco?

Yes, by law you need a separate license to sell vapor products or any tobacco products.

For more information or to purchase one of these licenses go to eStop Business Licenses.

New for Tax Year 2019: Montana Pass-Through Entity Tax Return (Form PTE)

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Beginning with Tax Year 2019, Partnerships and S corporations will file their Montana tax return on the new Montana Pass-Through Entity Tax Return (Form PTE).

Disregarded entities owned by partnerships and S corporations, including subchapter S subsidiaries, will be included on Form PTE.

The Montana S Corporation Information and Composite Tax Return (Form CLT-4S) and the Montana Partnership Information and Composite Tax Return (Form PR-1) have been discontinued.

For all tax years beginning before December 31, 2018, please continue to use the current forms:

Partnerships
Partnership Information and Composite Tax Return (Form PR-1)
S Corporations
S Corporation Information and Composite Tax Return (Form CLT-4S)
Disregarded Enities
Disregarded Entity Information Return (Form DER-1)

Filing Changes for Disregarded Entities

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Starting with Tax Year 2019, we will not accept the Montana Disregarded Entity Information Return (Form DER-1) or payments for the following entities:

  • Single-Member LLCs (SMLLC) owned by partnerships or S corporations
  • SMLLCs owned by C corporations, and
  • Qualified subchapter S corporation subsidiaries.

The new filing requirements for these entities are explained below.

New Filing and Payment Requirements

Disregarded Entities Owned by Partnerships or S corporations

Single-member LLCs (SMLLCs) owned by Partnerships or S corporations must report their Montana source income on their owner’s Montana Pass-Through Entity Tax Return (Form PTE), Schedule VII and Schedule DE. They will no longer file the Montana Disregarded Entity Information Return (Form DER-1).

For the purpose of determining the owner of a SMLLC, disregarded entities owned through a series of SMLLCs are considered directly owned by the first owner that is not a disregarded entity.

Qualified subchapter S corporation subsidiaries must be included on their owner’s Form PTE, Schedule VII and Schedule DE. They will no longer file Form DER-1.

Disregarded Entities Owned by C corporations

Disregarded entities owned by C corporations must be reported on their owner’s Form CIT, Schedule M.

They will no longer file Form DER-1.

Disregarded Entities Owned by Nonresident Individuals, Estates or Trusts

Disregarded entities owned by nonresident individuals, estates or trusts are still required to file Form DER-1. Disregarded entities with existing accounts on the department’s TransAction Portal (TAP) can file the form electronically.

Disregarded entities without TAP accounts can contact us at (406) 444-6900 for help with registering an account.

HELP Entity Fee (HEF)

Quick Information

Due Dates

April 15

Fees

\text{HELP Entity Fee} = \left(\frac{\text{Average Cost per Participant}}{12}\times\text{Participating Members}\right)-\text{Total Premiums}

Fees

The HELP Entity Fee (HEF) is equal to the state’s share of the annual average cost per program participantsplit up over 12 months, multiplied by the number of individuals in the 26 U.S.C. 501(d) organization who are receiving Medicaid coverage, less the total annual amount the entity’s members have paid in premiums.

\text{HELP Entity Fee} = \left(\frac{\text{Average Cost per Participant}}{12}\times\text{Participating Members}\right)-\text{Total Premiums}

Reporting and Payment Options

You may file and pay your HELP Entity Fees through our TransAction Portal (TAP).

TransAction Portal Banner

Instructions for Submitting the Worksheet

    1. Log into our TransAction Portal (TAP).
    2. Select your HELP Entity Fee (HEF) Account.
    3. You can select Submit Payment from the account level or you can select the period then select submit payment. Either way will take you to the same worksheet.
    4. Complete the worksheet by entering monthly participants and premiums paid on behalf of the participants.
      • The system will track all payments you make throughout the year and subtract that from the amount due.
      • The Recommended Payment is the estimated payment we suggest you pay. You can pay more or less than this amount.
      • You can pay as often as you want.
    5. Once the sheet is completed select Submit. You will need to enter your TAP Password..
    6. You will be taken to the confirmation page.
      You can submit your payment at this time by selecting Pay Online, or you can wait and pay later.
      You may want to print this screen and keep it for your records.
    7. If you select pay online, it will take you to our payment screen so that you may make a payment.

Instructions for Filing a Return

    1. Log in to our TransAction Portal (TAP).
    2. Select your HELP Entity Fee (HEF) Account.
    3. You can file from either the Perioid or Account level:
      Account Level
      Select File a Return for the period you are filing.
      Period Level
      Select the period, then select File Annual Reconciliation.
    4. Complete the form by entering the monthly participates and any premiums paid on behalf of those participants.
      The worksheet will calculate your payments and premiums to give you a recommended amount due.
      If you have paid more than what is due, the worksheet will show as zero and an auditor will review your account and issue any necessary refunds.
    5. Select Next.
    6. Check the box on the confirmation page.
      This tells us you agree with what you are filing and that it is true and complete.
    7. Select Submit. You must enter your TAP Password to complete the transaction.
    8. You will be taken to a confirmation screen.
      This page gives you the option to print your confirmation for your records.
    9. If you wish to make a payment, select Pay Online and it will take you to our payment screen.
      Payments can be made at anytime by accessing your account and selecting the payment option from the I Want To list.

    • The HELP Entity Fee (HEF) is subject to uniform penalties and interest.

    You are not required to submit payments each month, but may do so.

    All payments are due by April 15.

    Due Dates

    You may make estimated payments by using the HEF worksheet, available in TAP.

    HELP Entity Fee returns and payments are due on April 15.

    Penalties and Interest

    The HELP Entity Fee (HEF) is subject to uniform penalties and interest.

    Opioid Seller’s License

    Any wholesaler licensed by the Montana Board of Pharmacy who distributes the initial sale of opioids in Montana needs an opioid seller’s license. This is a separate license from the Wholesaler Drug Distributor license.

    Businesses with more than one location selling into Montana must be licensed for each location.

    Applying for a License

    Access our TransAction Portal (TAP) to register your entity and location.

    Once registered, you will receive your account information. You will then be able to log in to TAP to pay the license fee and obtain your license.

    TransAction Portal Banner

    License Fee

    The annual license fee is $500.

    License Renewal

    Opioid seller’s licenses are valid January 1 through December 31 and must be renewed annually.

    Licenses obtained after January 1 will be valid through December 31 of the year it is issued.

    What is an Opioid?

    An “opiate” is:

    • a drug with an addiction-forming or addiction-sustaining liability like morphine, or
    • a drug capable of being converted into a drug with an addiction-forming or addiction-sustaining liability.

    Unless specifically designated as a dangerous drug under 50-32-202, MCA; opiates do not include the dextrorotatory isomer of 3-methoxy-n-methylmorphinan and its salts, or its racemic and levoratory forms. (50-32-101, MCA)

    Opioid Seller’s License List

    Opioid License Holder List updated November 1, 2019 (PDF, 54 KB)

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