Montana Sales Tax Nexus

Montana Sales Tax Nexus & Income Tax Nexus

Montana Sales Tax Nexus

Montana does not have a state or local sales tax. Therefore, there is no sales tax nexus in Montana.

Montana Income Tax Nexus

Montana follows an economic presence income tax nexus standard. This means that a corporation is subject to Montana corporate income tax if it is engaged in business activity in Montana, unless it is otherwise exempt.

The following factors are considered when determining whether a corporation has a sufficient economic presence in Montana to establish income tax nexus:

• The corporation’s level of sales activity in Montana.
• The corporation’s number of employees in Montana.
• The corporation’s property in Montana.
• The corporation’s use of Montana’s resources.

There is no specific dollar amount or number of transactions that will automatically establish income tax nexus in Montana. However, the Montana Department of Revenue has stated that a corporation with annual sales of $100,000 or more in Montana is likely to have nexus.

Small Retailer Exception

Out-of-state businesses that do not have a physical presence in Montana are exempt from corporate income tax nexus if their annual sales in Montana are less than $100,000. However, they may still be required to file a Montana corporate income tax return if they have any Montana source income.

Conclusion

The Montana State Tax Nexus laws and thresholds are relatively straightforward. There is no sales tax nexus in Montana, and income tax nexus is based on an economic presence standard. Out-of-state businesses with annual sales in Montana of less than $100,000 are generally exempt from corporate income tax nexus.