A Montana Pass-Through Entity Owner Tax Agreement (Form PT-AGR) is completed by a pass-through owner who does not want to be included in a composite tax return or have state taxes withheld from their pass-through income.
The Pass-Through Owner Tax Agreement (Form PT-AGR) is due at the same time as the business's return, including extensions.
You do not need to file a new Form PT-AGR every year. However, a new owner will need to file Form PT-AGR to be exempt from the withholding tax.
Both the business and owner need to keep a copy of the agreement as part of their tax records.
An owner may file a pass-through owner tax agreement if they are a:
By signing the agreement, you agree to:
After you complete the agreement, you may file it with the department or return it to the business.
If you file it yourself, you must also send a copy to the business.
The business must pay taxes for any owner who meets the requirements for an agreement but:
To qualify as a domestic second-tier pass-through entity, the second-tier entity must demonstrate that all its direct and indirect owners are either resident individuals, estates, or trusts, domestic C corporation, or any other entity whose principal place of business or administration is in Montana.
If the owner files the agreement with the department, it must also send the pass-through entity a copy of the agreement.
A new Form PT-AGR does not have to be filed each year. However, a new agreement must be filed each year there is a change in the ownership structure of a domestic second tier pass-through entity. The PTE and owner need to retain these agreements as part of their tax records until the end of the fourth year following the tax year the agreement has been revoked or the owner no longer holds interest in the pass-through entity.
See the instructions for Form PT-AGR for more information.