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State and Local Tax

Montana Adopts Single Sales Factor Apportionment Formula for 2025

· 1 minute read

· 1 minute read

by Teresa Callahan

Legislation changing Montana’s multi-state corporation income tax apportionment formula to a single sales factor formula beginning in tax year 2025 has been signed into law. The new formula applies to C corporations and pass-through entities with non-resident owners who do business in Montana. (L. 2023, S124, effective 01/01/2025.)

Current apportionment formula.

Currently, Montana uses a three-factor apportionment formula with a double-weighted sales factor. The new single-factor formula eliminates the property and payroll factors.

Single sales factor apportionment formula.

Effective January 1, 2025, all apportionable income will be apportioned using a single sales factor formula, consisting of a fraction, the numerator of which is the total receipts of the taxpayer in Montana during the tax period and the denominator of which is the total receipts of the taxpayer everywhere during the tax period.

 

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