Montana LLC Taxes

With its lower-than-average cost of living and natural beauty, Montana is becoming a popular place to live and start a business. Yet, as more business owners choose to start their ventures within the state, many may find it challenging to understand the business taxes involved. 

Regardless of the size of your business, if you operate a limited liability company (LLC) in Montana, you’ll need to stay up to date on your finances and pay federal, state, and local taxes. Our guide will help you understand which taxes you must pay for your Montana LLC.

Recommended: Schedule a free consultation with an accountant to stay on top of your taxes.

Montana LLC Taxes Owed

LLCs benefit from pass-through taxation, which means the business’s profits pass through to its members’ individual tax returns. As a result, your LLC itself doesn’t pay taxes to the federal government or the state of Montana. Instead, LLC owners must pay taxes on their portion of the income generated by the LLC. 

In Montana, LLC owners can expect to pay the following taxes:

Federal Taxes

Regardless of where your business is located, if you have an LLC within the United States, you will have to pay federal income taxes and federal self-employment taxes. These taxes are reported on your Form 1040.

Federal Self-Employment Taxes

It doesn’t matter if your LLC is a single-member LLC or a multi-member LLC; all LLC members must pay self-employment taxes on their share of the LLC’s profits. The self-employment tax rate is 15.3%. 

Federal Income Taxes

Your federal income taxes will depend on your tax bracket, and the cutoffs for individual tax brackets, as well as the percent owed, will change each year. 

Montana State Taxes

Each state has its own laws that dictate how it taxes individuals and businesses. For example, Montana doesn’t impose a state sales tax. That means your customers won’t have to pay it, and your business won’t have to file a state sales tax return.

Montana Income Taxes

The state-level income tax for Montana is 6.75%. This rate is quite average when compared to other states across the country.

Montana Sales and Use Tax

Montana has no state sales tax imposed on purchases or transactions. This is a key advantage of doing business in Montana, and it makes the state one of the few that lack any kind of statewide sales tax.

Additional State Taxes

The Montana Department of Revenue oversees the collection of various state-specific taxes businesses may have to pay, depending on their location, industry, and number of employees. A few examples of these additional taxes include:

  • Alcoholic Beverage Taxes
  • Cigarette Taxes
  • Local Resort Tax
  • Oil and Natural Gas Production Tax
  • Rental Vehicle Tax
  • Retail Telecommunications Excise Tax

The Montana Department of Revenue website has information on additional taxes that apply to LLCs and other businesses.

Montana Local Taxes

The local laws and ordinances in Butte likely will differ greatly from those in Big Sky. Regardless of where you live in Montana, we recommend you check with your local jurisdiction to ensure your business obtains the proper local permits and follows any local regulations that may impact its operations.

Montana LLC Compliance

You must obey Montana’s state and local laws in order to maintain your business in good standing. While Montana LLCs technically don’t file taxes with the state, businesses must still file an annual report each year.

Montana LLC Annual Report

All Montana LLCs must file an annual report with the Montana Secretary of State. You can only do this online, and the filing fee is $20.

Your annual report is due by April 15 every year, but the state will accept them as early as January 1 for those who want to file as soon as possible. If you file late, you’ll have to pay an additional $15 late fee, bringing the total filing fee to $35. If you fail to file your report by September 1, the state will get involved and shut down your LLC.

If the state shuts down your LLC, you’ll need to get it reinstated. You can do this by paying to file all of your late annual reports in addition to the $35 reinstatement fee.

For more information, check out our Montana LLC Annual Report guide.

LLC taxes are complex. While our guide can provide you with important information, we recommend you schedule a free consultation with an accountant to ensure you handle your business taxes correctly.