Tax-Exempt Entities

Tax-Exempt Status Request Form for Income Taxes

Entities engaged in business in Montana are required to file an annual Montana income tax return, unless they have tax-exempt status granted by the Montana Department of Revenue. Entities looking to be granted tax-exempt status, must submit a Tax-Exempt status Request Form for Income Taxes - Form EXPT (PDF).

IRS Exemption Certificate/Letter

 An IRS exemption certificate or letter is not sufficient for tax-exempt status in Montana. Each entity must receive tax-exempt status from the Montana Department of Revenue. A copy of your IRS exemption certificate or letter should be included with your tax-exemption request.

Entity Registration with the Department of Revenue

All entities or organizations that register with the Montana Secretary of State, including tax-exempt entities, should also register with the Department of Revenue. Please register with Montana using our TransAction Portal. Tax exempt entities or those seeking tax exemption should register as a C-corporation.

Who May Qualify for the Exemption

Below is additional information relating to entities that may be eligible for the exemption, as well as topics related to this exemption. For more information about the exemption and how to file, review instructions for the Tax-Exempt Status Request Form - Form EXPT (PDF).

Religious organizations that do not have an IRS exemption letter, or that have applied for one and have not yet received it, may still qualify as tax-exempt in Montana. These entities need to state this fact in their application.

While Homeowners Associations are not considered tax-exempt by the IRS, they are generally considered tax-exempt in Montana. When applying for tax-exempt status an HOA must submit a copy of their federal Form 1120-H with the application.

Some unincorporated entities such as employee stock ownership plans, individual retirement accounts, pensions and annuities may also qualify as tax-exempt in Montana.

Please see 15-31-102, MCA for a list of qualifying exempt organizations. Your entity must be organized for exempt purposes as defined in section 501(c)(3) of the Internal Revenue Code. An entity that does not file an annual federal tax return but is listed as an exempt organization for Montana purposes may still apply for tax-exempt status in Montana.

Property Tax Exemption

Do not complete this form for the Montana Department of Revenue property tax exemption. Instead, complete form AB-30R - Real Property Tax Exemption.

Filing Requirements for Tax-Exempt Entities

An entity that has unrelated business taxable income subject to Montana taxation must file a corporate income tax return and include a copy of their federal exempt organization business income tax return on which it reports its unrelated business income with the department.

A partnership with a tax-exempt owner is required to withhold tax for that owner even if they have been approved for tax-exempt status by the department. To waive the withholding requirement, the tax-exempt entity needs to file a Montana Form PT-AGR, Pass-Through Entity Owner Tax Agreement. Please see ARM 42.9.109 for more information.

Please see ARM 42.30.202 for more information.