Montana Department of Revenue

Revised Montana NOL Schedule for Tax Years 2018-2020

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Revised Montana NOL Schedule for Tax Years 2018-2020

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Congress enacted the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. Among other things, the Act addresses net operating losses (NOLs) and other related provisions.

For example:

  • Section 2303 allows a five-year carryback for NOLs arising in the 2018, 2019, and 2020 tax years. Section 2303 also temporarily repeals the 80% of income limitation for tax years beginning before 2021.
  • Section 2304 temporarily repeals the loss limitation for individuals, estates and trusts under section 461(l) of the Internal Revenue Code (IRC) for tax years beginning before January 1, 2021.
  • Section 2306 amended section 163(j) of the IRC increasing the interest expense deduction for tax years 2019 and 2020.
  • Section 2307 made some technical amendments to section 168(e) of the IRC related to qualified improvement property.

The above-provisions apply when a taxpayer calculates Montana taxable income.  As a result:

  • Some taxpayers may have to amend their 2018 and/or 2019 tax returns;
  • Individuals, estates and trusts with an NOL incurred in tax years 2018 or 2019 may carry their NOL back five years and amend the corresponding returns filed in those years. A waiver of the carryback period will be available on their 2020 Montana income tax return for each impacted tax year.

As a result of the changes from the CARES Act to the treatment of NOLs for tax years 2018, 2019, and 2020, the department updated the Montana Net Operating Loss for Individuals, Estates and Trusts Schedule and it is now available to recalculate the NOL for 2018 and/or 2019 to carry back to previous years. Taxpayers will also use this schedule to calculate their 2020 NOL. Please note that a taxpayer cannot carry back a 2020 NOL before tax year 2020 has ended.  To carry back a 2020 NOL, you must complete your 2020 return and include the Class B NOL Schedule.

For Corporations, amended return instructions and NOL provisions remain unchanged. See the Corporate Income Tax Return Instructions for more information.

Field Office Updates and Classification and Appraisal Notices Mailed

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The DOR Property Assessment Offices remain closed to the public, however field office staff are available by phone and email. If an in-person meeting is necessary, we will schedule it with the property owner, ensuring proper social distancing. We have started planning and preparation efforts to open our offices to the public. It is our intention to only open an office when we have safety protocols in place for the staff working in the office as well as the public visiting the office. We will keep you updated as we are able to open offices.

We have completed mailing the 2020 classification and appraisal notices. We generated 20,128 mobile home notices, 28,770 personal property notices and 114,656 real property notices. Below is a table detailing the notice dates and deadline dates for submitting a Request for Informal Classification and Appraisal Review (Form AB-26) and a formal appeal for each property type.

(PDF, 135 KB)

Property TypeTotal Number of RecordsNotice DateDeadline to Submit Form AB-26 or Formal Appeal
Mobile Home20,1284/3/20206/1/2020
Personal Property - Locally Assessed21,8585/8/20206/8/2020
Personal Property - Industrial 6,9125/8/20206/8/2020
Real Property - Locally Assessed113,1166/19/20207/20/2020
Real Property - Industrial1,5406/19/20207/20/2020

Please Note: The notice date on some original or revised notices generated and mailed from the local field offices varies depending upon the creation date of the notice.

How a Property Owner Can Object or Appeal the Classification or Market Value

Property owners who do not agree with our determination of their property’s classification or market value can either informally object to the department or formally appeal to their local county tax appeal board (CTAB) one time per valuation cycle.

  1. Submit a Request for Informal Classification and Appraisal Review (Form AB-26) to the department within 30 days from the date on the classification and appraisal notice. New this year, property owners can check a box on their classification and appraisal notice and mail the detachable ticket, within 30 days from the date on their notice, to their local field office to request a Form AB-26 be mailed to them.

    What happens next?

    The property owner can ask for an onsite appraisal and can give us related documentation for additional review. We will then send the owner a decision letter about whether or not we adjusted the property value. If the owner disagrees with our decision, the owner can file a formal appeal with the local CTAB within 30 days from the date on our decision letter.

  2. If the owner disagrees with CTAB’s decision, the owner can file an appeal with the Montana Tax Appeal Board within 30 days of the CTAB decision.

    What happens next?

    Our informal review process and the county’s formal appeal process are separate and independent processes. Property owners don’t have to first file an informal review with us before filing an appeal with the local CTAB. If filed on time, the property owner can file both a Form AB-26 and a Property Tax Appeal Form. Once CTAB makes a decision, however, the owner can no longer use our informal review process.

Valuation Adjustments for Class Three and Class Four Property

An informal classification and appraisal review (Form AB-26) or formal appeal submitted within 30 days from the date on the notice that results in a classification or valuation adjustment, the adjustment will apply to tax year 2020.

If property owners miss the 30-day deadline, their opportunity to submit a request for informal review or appeal directly to CTAB will be in 2021, after they receive their classification and appraisal notice for the 2021-2022 valuation cycle.

COVID-19 Update on Military Income

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Currently, at the national level, the order in effect to activate service members to provide COVID-19 related assistance is the President’s Executive Order of March 27, 2020.

Governor Bullock has also implemented the activation of the Montana National Guard for state purposes.

This impacts the state taxation of the related military income as follows:

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National Guard

Montana National Guard salaries continue to be subject to Montana income tax.

Montana law provides that salaries received by National Guard servicemembers are exempt from Montana income tax only if received while serving under an order issued pursuant to United States Code Title 10, or for service in a homeland defense activity as defined in 32 U.S.C. 901 or in a contingency operation as defined in 10 U.S.C. 101.

Orders received by the Montana National Guard servicemembers to provide COVID-19 related support in Montana were issued by Governor Bullock. These orders were not issued as part of a homeland defense activity or contingency operation. As such, the salaries received while serving under these orders are not exempt from Montana income tax.

We recognize that the response to COVID-19 is ongoing. Therefore, we are committed to monitor the National Guard’s response to this emergency, as well as the corresponding federal and state orders issued relative to their service, to ensure fairness in our decisions regarding their wages.

Reserve Component of the Armed Forces

The Executive Order of March 27, 2020, was issued pursuant to United States Code, Title 10 by the President of the United States and specifically addressed members of the Ready Reserve. As such, salaries received by Reservists who were ordered to service as part of this Executive Order are exempt from Montana income tax.

(Updated June 5) Phase II Guidelines for Alcoholic Beverage Licensees and Agency Liquor Stores

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Reopening the Big Sky
Phase II Guidelines for Alcoholic Beverage Licensees and Agency Liquor Stores Effective June 1, 2020

Updated June 5, 2020

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

Download a printable version of these guidelines. (PDF, 183 KB)

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On-Premises Licensees

Service Spacing and Cleaning

  1. Follow a specific cleaning plan meeting the Department of Public Health and Human Services (DPHHS) Guidelines:
    • Clean all surfaces between customers, including:
      • Tables
      • Bar counters
      • Chairs
      • Bar stools
      • Booths
      • Condiments
      • Napkins
      • Décor
      • Menus
      • Gaming machines
    • Remove any table items which cannot be adequately cleaned between customers.
    • Clean all growlers prior to refilling.
    • Do not refill drinks. Provide a new glass each time.
    • Do not provide self-service cups, straws, lids, condiments, beverages, or food.
    • Do not reuse drink coasters unless they can be disinfected between patrons.
    • Do not provide community peanuts or other foods. You may serve these in individual customer containers.
  2. Keep operational gaming machines must be 6 feet apart. Gaming machines are considered tables for the purpose of serving food and drinks.
  3. Limit your occupancy to 75% of your normal operational capacity to allow for adequate group spacing.
  4. When customers are waiting in line, keep groups that are not from the same household separated by an appropriate distance. If your waiting area is not large enough to allow social distancing, close the waiting area to customers.
  5. Limit all tables to 10 customers per table.
  6. Limit gaming machines to one customer per machine.
  7. Keep 6 feet of physical distance between groups or tables. You can accomplish this by:
    • Increasing table spacing, removing tables, or marking tables as closed;
    • Providing for a physical barrier between tables; or
    • Providing back-to-back seating with adequate separation.

Bar and Counter Service

  1. Do not allow patrons to stand and mingle at the bar or elsewhere. All patrons should have a place to sit.
  2. You may allow patrons to sit at bars or counters if:
    • Bar seating is following social distancing and sanitation protocols or other protective measures such as a protective barrier;
    • Bar seating is approved by the local health department; and
    • Bar seating follows these requirements:
      • No bar seat may be within 6 feet of a well or taps, an area where drinks are passed to servers, ice machines, or other areas used to prepare or serve food or beverages;
      • Bar stools are spaced 6 feet apart. If a group of 6 or fewer comes in and request to be seated together, a staff member may move seats to group them together, then separate the seats again once the group leaves;
      • If bars cannot keep 6 feet from bar seating and staff areas used for service preparation, a physical barrier or closing may be used to protect the staff.
    • Wells taken out of use are marked with a sign to remind staff.
  3. Keep a designated area at the bar to allow patrons to place and receive orders following these guidelines:
    • Only one patron may use this space at a time.
    • Keep 6 feet between all patrons from separate groups.
    • Patrons may grab their drink on order, then return to their seat.

On-Premises Hours

Breweries, Wineries, and Distillery Sample Rooms

Breweries, wineries, and distilleries must close their sample room and the normal time and not reopen until the normal time the next day. No deliveries may be made outside of sample room hours.

All-Beverage or Beer Licensees

Bars, restaurants, and casinos with all-beverage or beer licenses may be open 8:00 a.m. to 12:30 a.m.

All customers must be out of the facility by the close of business at 12:30 a.m.

No deliveries may occur between 12:30 a.m. and 8:00 a.m.

Restaurant Beer and Wine Licenses

Restaurants with a Restaurant Beer and Wine License may be open 11:00 a.m. to 12:30 a.m., but must stop allowing alcohol consumption at 11:00 p.m.

All customers must be out of the facility by 12:30 a.m.

No deliveries may occur between 11:00 p.m. and 11:00 a.m.

Additional Guidelines and Allowances

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

During Phase II, all licensees may:

  • Take orders and payments on the phone or by computer.
  • Deliver alcoholic beverages off premises, including to a parking lot or curb before closing time. All deliveries must be made by an employee over the age of 21.
  • Sell alcohol through a drive-up window.

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 must:

  • Sell alcoholic beverages in original packaging1 for delivery, curbside, drive-up, or take-out. This includes growlers with beer and table wine.
  • Sell alcoholic beverages in individual servings2 for take-out only.
    The buyer assumes liability for local or state regulations regarding open container laws.

Breweries and Wineries

Breweries and wineries must only sell in original packaging1, including growlers with beer, or individual servings2 if they meet consumption guidelines3.

Distilleries

Distilleries must only sell up to 1.75 liters per person per day. All products must be sold in original packaging1 or individual servings2 if they meet consumption guidelines3.

Restaurant Beer and Wine Licensees

Restaurant beer and wine licensees may only sell beer or wine to a patron who orders food and has the beer and wine stated on the food bill.

In addition, all products must be sold in original packaging1, including growlers with beer, or individual servings2 if they meet consumption guidelines3.

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 table wine for any quantity of product that is agreed upon.

Wholesalers and distributors may also extend more than 7 days credit to a retailer as long as the same arrangement is offered to all retailers.

Continued Prohibitions under Phase II

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.

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.

3. Consumption guidelines means all-beverage licensees, on-premises beer licensees, restaurant beer and wine licensees, breweries, wineries, and distilleries may serve alcohol in individual servings for consumption off-premises if the consumption occurs in an area adjacent to the licensee’s approved premise and the licensee has received written approval from the governing local government. The written approval must be retained at their place of business. For breweries and distilleries individual servings are restricted to the sample room limits for the combined on-premise and off-premise consumption. This provision does not restrict off-premises sales made by on-premises retailers or manufacturers that are otherwise authorized by Montana law.

Temporary Process for Modifying a License During Phase II

Fingerprint Cards

Normally, two sets of fingerprint cards per person are required to be submitted to the Department with several types of applications. As an accommodation for our customers that cannot get fingerprints taken during this time, the ABCD/GCD will temporarily waive the requirement for fingerprint cards and will do a name-based background check to determine suitability until fingerprints can be obtained.

This applies to applications for:

  • New location managers
  • Non-institutional loans
  • New officers or directors
  • Alcohol or gambling licenses

The following information is still required:

  • Personal/criminal history statement (Form 10 or Form 10A).
  • Any other form or document normally required with a submission.

While fingerprint cards will not be required for current submissions, they will be required later:

  • ABCD/GCD will follow up with a request once normal operations have resumed.
  • Upon request, two sets of fingerprint cards for each person must be submitted within 30 days along with the $30 processing fee per person.

Financing

As a reminder, institutional loans (bank loans) do not require prior approval. Notification that a licensee has obtained a bank loan is only required with the license renewal submission.

Non-institutional loans (non-bank loans) must have prior approval. In order to speed up the review process, please follow these guidelines:

Be sure to supply all required documents. Before we can conduct our review, an application must be complete.

The following documents are required:

  • Non-institutional loan (Form 13).
  • Personal/criminal history statement (Form 10 or Form 10A) for each person providing funding.
  • Loan agreement and/or promissory note.
  • Amortization schedule and/or other applicable contracts or documents.
  • Source of funding for the loan (e.g., 6 months of bank statements).
  • As noted in the above section, the requirements for fingerprint cards will temporarily be waived.

Financing application submissions will be given priority.

Additional Accommodations

During this time, we will allow debt holders (landlords, lenders, etc.) to provide temporary reprieve from payments normally required by law and rule. Bone fide emergency loan or lease agreement modifications will not be considered an improper NIL or undisclosed ownership interest.

Any agreement between the licensee and the debt holder to defer or forgive payments or change terms must be documented. The documentation should include details of the modification such as:

  • Interest rate adjustment.
  • Monthly payment adjustment.
  • Monthly payment “holidays” or forgiveness.
  • Change in loan terms.
  • Timeframe for the modification (e.g., temporary or through the term).
  • Other accommodations.

Documents should be submitted to the Department no later than with the licensee’s annual license renewal application, due June 30.

Key Personnel Changes

The license renewal form (due June 30) requires disclosure of any changes to mangers, officers, or directors. Please ensure all changes are reported at that time (or before).

Alterations to Licensed Premises

On premises retailers and manufacturers may want to alter their licensed premises to add additional outdoor space. As an accommodation during this time:

  • You may work with your local officials to get their approvals prior to applying with the Department.
  • Work with the Department to update your floorplan.
  • If you can’t immediately meet suitability but have local official approval, the Department will grant temporary approval and will work with you to meet suitability and gain full approval.

Adequate cleaning and distancing must be maintained in outdoor space as well.

Have You Received a Withholding Nonfiler Letter?

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Recently, the department sent letters to business owners who have not filed their 2019 Montana Annual W-2 1099 Withholding Tax Reconciliation (Form MW-3). The Form MW-3 was due January 31, 2020.

What we are asking you to do

  • Send us your Form MW-3, Forms W-2 with or without withholding, and Forms 1099 that report withholding by July 31, 2020.
  • Contact us if you do not believe you have a filing requirement or if your account is closed.

What happens if I don’t respond?

If you do not respond, we will estimate your withholding tax along with any penalties and interest based on the information available to us. You may have an additional penalty if you do not file within 60 days of receiving your letter.

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Additional Tips for Successful Filing

The Montana Department of Revenue reconciles employer information with the Forms W-2s or 1099s filed by employees or retirees. Many errors occur that can be easily avoided. Following the tips below will help employers and tax preparers reduce the chance of receiving a letter or phone call from us. This will also speed up the processing of tax refunds for employees or clients.

  • Complete all required fields
  • Use the correct Employer Identification Number (EIN)—use the EIN the IRS issued you. If you are a service provider, use the EINs issued to your clients.
  • Use the correct state account number. This number is formatted as XXXXXXX-XXX-WTH.
  • Make sure all copies of Form W-2 and Form 1099 are legible and no numbers are truncated or masked.
  • Use the correct Form W-2 and Form 1099 for the reporting year.
  • File Form MW-3 with your Forms W-2. Federal Form W-3 will not be accepted.
  • If you are reporting for Forms 1099 without withholding, do not send them with the Form MW-3. They should be filed with federal Form 1096.
  • If you file your Forms W-2 electronically, do not send a paper copy.

 

If you are mailing your information, please send it to:

Montana Department of Revenue
PO Box 5835
Helena, MT 59604-5835
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