Montana Department of Revenue

A Special Message for Remote Workers in Montana

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A Special Message for Remote Workers in Montana

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The Montana Department of Revenue has a reminder for anyone who lived in Montana for any time in 2020 and worked at their jobs remotely, including those who temporarily relocated due to the COVID-19 pandemic:

You must pay Montana state income tax on any wages received for work performed while in Montana, even if your job is normally based in another state.

Please contact your tax professional for further details.

Learn more about Montana Residency or see The Montana Individual Income Tax Return Instructions for more information.

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Unemployment Benefits and Form 1099-G: Subject to Federal Income Tax, not Montana Income Tax

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Unemployment benefits are considered regular income and are subject to federal income tax, but are exempt from Montana income tax.

This includes benefits received under regular unemployment insurance, any special unemployment compensations authorized under the Coronavirus Aid, Relief, and Economic Security (CARES) Act or Continued Assistance for Unemployed Workers Act of 2020, and the Lost Wages Assistance (LWA) and Interim Pandemic Assistance (IPA) programs.

The 1099-G is a form taxpayers receive that documents these payments from state government, including under regular UI, pandemic, and additional benefit programs. Those who received this form will need it to file their tax returns.

If you have further questions about your 1099-G, call the Montana Department of Labor & Industry at (406) 444-2556.

Those who receive a 1099-G form from DLI but did not file for unemployment benefits are likely victims of identity theft. Anyone who suspects fraud should call (406) 444-0072.

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The information on this page is related to Forms 1099-G issued from the Montana Department of Labor and Industry for unemployment benefits.

If you are expecting a Form 1099-G issued by the Montana Department of Revenue, see our information regarding Forms 1099-G.

Paycheck Protection Program (PPP) Debt Cancelation Not Taxable

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As a part of the CARES Act and the latest federal COVID-19 relief package, passed in December, the federal government created the Paycheck Protection Program (PPP). The PPP is a loan program that provides cash-flow assistance to small businesses as an incentive for businesses to retain their employees during the COVID-19 pandemic. If the recipient fully spends the funds on payroll costs, interest on mortgages, rent, and utilities, the loan can be fully forgiven.

Any debt from the PPP loans canceled by the Small Business Administration is specifically excluded from taxpayers’ gross income. Because Montana Adjusted Gross Income includes Federal Adjusted Gross Income, this canceled debt is not included in the calculation of Montana Adjusted Gross Income.

The COVID-19 relief package passed in December also allows taxpayers to deduct expenses paid for with funds received from PPP loans. So, those expenses are included in the calculation of Montana Adjusted Gross Income.

Updated January 26, 2021

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COVID Business Grant Income Taxable in Montana

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Montana received $1.25 billion in funding from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed March 27, 2020, to use for necessary expenditures related to the COVID-19 pandemic. Among other things, Montana created several business grant programs with this funding to aid Montana businesses with the costs and financial losses that occurred because of the pandemic.

Montana law states that Montana Adjusted Gross Income is derived from Federal Adjusted Gross Income. Unless expressly exempted by federal or Montana law, grant income to businesses is included in a business’s federal taxable gross income and, therefore, included in Montana taxable income. As of the printing of this article, the IRS has not exempted Montana business grant funds from gross income and reminds taxpayers and preparers to include these amounts on 2020 business income tax returns. It should be noted that while a grant recipient is required to include the grant in its gross income, it can deduct and/or capitalize the business expenses it paid for with these grant funds.

Grant recipients can expect to receive a Form 1099-G with the amount of grant funding it received by January 31, 2021.

For more information regarding reporting of grant income, see the IRS’s FAQs regarding CARES Act state-funded grant programs here: https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions.

Guidance for Alcoholic Beverage Licensees and Agency Liquor Stores Effective January 15, 2021

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New guidance for alcoholic beverage licensees and agency liquor stores effective January 15, 2021.

If local jurisdictions have more restrictive guidelines, those must be followed instead.

Printable Guidelines effective January 15, 2021 (PDF, 152 KB)

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Update

To serve their customers in a healthful environment, businesses should make reasonable efforts to develop and implement appropriate policies based on industry best practices during this emergency.

Days and hours of operation for all licenses types and agency liquor stores revert back to those outlined in Title 16, MCA.

Continued Allowances

All licensees must follow all laws pertaining to the Responsible Alcohol Sales and Service Act (16-4-1001, MCA).

All licensees may:

  • Take orders and payments on the phone or by computer.
  • Sell for delivery, curbside pickup, drive-up or take-out for off-premises consumption prior to closing time.
    • Licensees and their employees (with server training, but no age requirement) may carry alcohol in original packaging1 curbside or to a parking area. This includes growlers with beer and table wine.
    • Licensees and their employees (at least 21 and with server training) may deliver alcohol “off-site” in original packaging1. This includes growlers with beer and table wine.

Selling Alcohol for Off-Premises Consumption

All licensees may sell alcohol for off-premises consumption prior to closing time.

All-Beverage and Beer Licensees

All-beverage and beer licensees may:

  • Sell alcoholic beverages in individual servings2 for take-out only. The buyer assumes liability for local or state regulations regarding open container laws.
    • Licensees employees must be at least 18 and have server training.

Breweries

Breweries may:

  • Sell only in original packaging1, including growlers with beer.

Wineries

Wineries may:

  • Sell only in original packaging1, including growlers with wine.

Distilleries

Distilleries may:

  • Sell only up to 1.75 liters per person per day.
  • Sell only in original packaging1.

Restaurant Beer and Wine Licensees

Restaurant beer and wine licensees may:

  • Sell only in original packaging1.
  • Sell beer and wine only to a patron who orders food, with that beer and wine stated on the food bill.

Off-Premises Licensees and Agency Liquor Stores

Off-premises licensees and agency liquor stores may only sell products in original packaging1.

Beer Wholesalers and Table Wine Distributors

Beer wholesalers and table wine distributors may coordinate with retail licensees and with agency liquor stores for pickup of beer or table wine for any quantity of product that is agreed upon.

Continued Prohibitions

No licensee or agency liquor store may:

  • Sell to a person under 21.
  • Sell to any person actually, apparently, or obviously intoxicated.
  • Have a third-party service such as Grubhub order, pickup, or deliver alcohol.
  • Canvass for, or solicit, orders for alcohol. Customers must initiate the sale of alcohol either on the phone, in person, or online. Normal advertising rules apply.

Virtual Special Events NOT allowed.

Virtual Catered Events NOT allowed.

  1. Original packaging means the sealed container in which a manufacturer packages its products for retail sale. This includes bottles, cans, kegs, and growlers, but does not include lines or piping for carrying product from a manufacturer’s premises to a retailer’s premises.
  2. Individual serving means not more than 16 ounces of beer, not more than 2 ounces of liquor, not more than 7 ounces of wine, or a proportional combination thereof. For example, 1 ounce of liquor mixed with 8 ounces of beer.

I-190 Adult-Use Marijuana Frequently Asked Questions

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For Individuals

When will I be able to purchase adult-use marijuana in Montana?

Sales for adult use marijuana will begin in Calendar Year 2022.

Is there still medical marijuana in Montana?

Medical marijuana is still available for qualifying patients under the Montana Medical Marijuana Program, under the Department of Public Health and Human Services.

Why can’t I just buy marijuana from an existing medical provider?

Medical marijuana providers are only allowed to sell marijuana to registered patients approved under the Montana Medical Marijuana Program.

I can’t buy marijuana until possibly 2022. But isn’t it legal now?

Under Initiative 190, starting January 1, 2021, criminal penalties for possession or use of less than one ounce of marijuana (not more than 8 grams of which is concentrate) no longer apply under state law for adults 21 and over. Adults may plant and cultivate up to four mature marijuana plants and four seedlings. Sale of any amount, except by licensed providers to valid cardholders, remains illegal.

Possession and use of marijuana remains illegal in many circumstances. It is illegal on all federal lands including Glacier and Yellowstone National Parks and at other specific places under state, local, or tribal law. It remains illegal to transport marijuana into or out of Montana. Contact your local law enforcement agency with any questions

If I grow marijuana, can I sell it?

No. Individuals are allowed to grow marijuana for personal use only. No one is allowed to sell marijuana without a license.

Can I still get fined for marijuana?

Yes.

For a person who is 21 years of age or older:

  • A person who cultivates marijuana plants or stores marijuana outside of a locked space is subject to a civil fine not exceeding $250 and forfeiture of the marijuana.
  • A person who smokes marijuana in a public place is subject to a civil fine not exceeding $50.

A person who is under 21 years old and is not a registered medical marijuana cardholder can be fined up to $100, or complete up to four hours of drug education or counseling in lieu of the fine, for possession, use, ingestion, inhalation, transportation, or distribution without consideration of 1 ounce or less of marijuana.

A person who is under 18 years old and is not a registered medical marijuana cardholder can be fined up to $100, or complete up to four hours of drug education or counseling in lieu of the fine, for possession, use, transportation, or distribution without consideration of marijuana paraphernalia. The marijuana paraphernalia is subject to forfeiture.

The possession, production, delivery without consideration to a person 21 years of age or older, or possession with intent to deliver more than 1 ounce but less than 2 ounces of marijuana, or more than 8 grams but less than 16 grams of marijuana in a concentrated form, is punishable by forfeiture of the marijuana and for a first violation, the person’s choice between a civil fine not exceeding $200 or completing up to four hours of community service in lieu of the fine. See I-190 for more information regarding other fines for this offense.

For Potential Licensees

How do I get a license?

The department will begin accepting applications for licenses to sell marijuana to adults 21 and over by October 1, 2021.

Sign up to receive updates on any changes in the law or opportunities to apply for licenses.

For the first 12 months after the department starts accepting applications for licenses, only current medical marijuana providers, medical marijuana infused products providers, and dispensaries may apply.

Why does it take so long?

That is the timeline in the initiative. There are many complex details, and the Montana Department of Revenue will oversee this entire new industry from cultivation to sale. The department must develop a licensing system for manufacturers, providers, and dispensaries, and must build processes and systems to handle site inspections, tax collection, and more. In addition, the Montana Legislature must provide funding and appropriation to the department to fully staff and implement the initiative.

What’s the tax on marijuana?

Under I-190, the tax for retail sale of adult-use marijuana and marijuana products will be 20 percent.

The tax on the retail sale of medical marijuana is 4 percent.

Can things change before licenses are issued?

The 2021 Session of the Montana Legislature began January 4, 2021, so changes are possible.

What will it cost me to get a license once they’re available?

The cost of licensure is undetermined at this point. Check back periodically or sign up for updates. The cost of licensure will vary based on the department’s costs of administering the program.

Is there a limit on the number of marijuana licenses that will be issued?

At this point there is no limit on the number of marijuana licenses that can be issued unless a local city or county ordinance establishes one.

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