1. MCA Contents
  2. TITLE 15
  3. CHAPTER 30
  4. Part 33
  5. 15-30-3326 Pass-through entity tax

Montana Code Annotated 2023

TITLE 15. TAXATION

CHAPTER 30. INDIVIDUAL INCOME TAX

Part 33. Small Business and Pass-Through Entities

Pass-Through Entity Tax

15-30-3326. Pass-through entity tax. (1) Each electing pass-through entity shall, on or before the due date of the pass-through entity's tax return, pay an entity tax. The entity tax is equal to the highest marginal tax rate in effect under 15-30-2103 for the tax year the election is made multiplied by the distributive share of Montana source income calculated under 15-30-3302 for all owners taxed under this chapter. Electing entities may substitute the distributive share of Montana source income allocated to owners who are residents as defined in 15-30-2101 for the distributive share of Montana source income calculated under 15-30-3302 for all resident owners taxed under this chapter for the computation of the tax.

(2) An electing pass-through entity shall allocate the entity tax to its owners based on their distributive share of Montana source income used to calculate the entity tax in subsection (1).

(3) The entity tax is in lieu of the tax paid under 15-30-3312 and 15-30-3313. If the owner of an electing pass-through entity is a partnership or S. corporation that does not elect to pay the entity tax, any amount of Montana source income in addition to the income subject to the entity tax is subject to the tax paid under 15-30-3313. When the provisions under 15-30-3313 apply, the withholding threshold under 15-30-3313(1) must be determined without regard to the entity tax.

(4) The electing entity shall make quarterly estimated tax payments and be subject to the underpayment interest as prescribed by 15-30-2512(5)(a) computed on the entity tax liability included on the pass-through entity return.

(5) The entity tax under this section is subject to penalties and interest under 15-1-216.

(6) A nonresident owner is not required to file an income tax return under the provisions of 15-30-2602 for a tax year if, for the tax year, all of the nonresident owner's Montana source income is subject to the entity tax.

(7) The department may adopt rules and prescribe forms necessary to administer and enforce the provisions of 15-30-3325 through 15-30-3328.

History: En. Sec. 2, Ch. 702, L. 2023.