Taxes Applicable to Montana Businesses
Montana corporations are subject to double taxation. Let’s explore the taxes Montana businesses pay.
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Business Taxes in Montana
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Key Aspects of Montana’s Tax Code
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No franchise tax for LLCs
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No statewide sales tax
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Income tax with graduated rates
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Property taxes, though not high compared to other states
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Various local business taxes
Why No Sales Tax in Montana?
Montana’s Tax System Overview
- No franchise tax for LLCs
- No statewide sales tax
- Income tax with graduated rates
- Property taxes, though not high compared to other states
- Various local business taxes
Do Montana LLCs Pay Taxes?
Montana LLCs with default tax classification are subject to pass-through taxation. The profits for a Montana LLC are taxed according to the federal self-employment tax rate (15.3%).
Montana classification of LLC tax shows the categories of taxes LLCs can opt for. With LLCBuddy, you’re gaining a trustworthy partner for your entrepreneurial journey.
If you form an LLC in Wyoming, but live in and conduct business in Montana, you’ll end up paying Montana taxes anyway.
The state of Montana has seen sizable in-migration in recent years, due to an affordable cost of living, expanding industries, and a business tax climate recently ranked fifth in the nation by the Tax Foundation. Many of these business startups take the form of an LLC.
Montana LLCs are taxed as pass-through entities, meaning income is reported on individual income tax returns. Currently in 2023, LLCs pay 6.75% state tax, and local municipalities may also have added taxes.
To form a Montana LLC, you’ll need to file the Articles of Organization with the Montana Secretary of State and pay a $35 filing fee.
Taxes for Montana LLCs
Montana LLCs are required to pay state taxes on their income, property, and, in some cases, sales tax. Foreign LLCs conducting business in Montana are subject to state taxes, including the annual minimum franchise tax of Montana. Moreover, Montana foreign LLCs must maintain accurate records of their financial and business activities.