Montana
Taxes and business formation • USA 2025–2026
Corporation in Montana
Tax system of Montana
Income Tax
Montana levies a progressive personal income tax on individuals. In 2024, rates range from 4.7% to 5.9%, depending on income level. All major types of income are taxed: wages, business profits, rental income, dividends, and capital gains.
Sales Tax
One of Montana's main features is the complete absence of a statewide sales tax. This means that neither buyers nor sellers are required to pay or collect sales tax on the sale of goods or the provision of most services.
Property Tax
In Montana, property tax is levied at the county level. The average effective rate is about 0.76% of assessed value, which makes the property tax burden moderate compared with other U.S. regions. Commercial and residential real estate are taxed differently. Residential property owners can take advantage of the Residential Property Exemption, along with tax benefits for retirees, veterans, and people with disabilities.
Business Taxes
Montana levies a Corporate Income Tax at 6.75% of taxable income for C-corporations. S-corporations and LLCs are exempt from the corporate tax. All legal entities (including LLCs, corporations, and LPs) are required to file an Annual Report with the Montana Secretary of State. The filing deadline is April 15 each year. Late filing results in penalties, and prolonged delinquency can lead to administrative dissolution of the company. If you have difficulty filing this report, our firm provides services for preparing and submitting the Annual Report on time.
Tangible Personal Property Tax
Businesses that own tangible personal property (equipment, furniture, machinery, etc.) are required to file a business personal property return. The tax applies when the total value exceeds the established minimum ($300,000).
Excise Taxes
Montana imposes excise taxes on fuel, tobacco, alcohol, and medical and recreational marijuana. These taxes are levied on producers, importers, or sellers and are regulated through special licenses.
Favorable Tax Conditions
Montana is one of the few U.S. states with no sales tax at all, which makes it attractive for retail, e-commerce, and services. Despite the existing personal income tax, the rates are moderate, and reporting is simple and clear. The state also offers benefits on tangible personal property tax for small businesses, as well as programs for reimbursement or exemption from tax on new equipment used in manufacturing activities.
Compared to Other States
Montana compares favorably with most other U.S. states thanks to the absence of a sales tax. At the same time, the corporate tax rate of 6.75% is around the national average. Property tax is lower than in states with high housing costs (for example, New Jersey or California), and the requirement to report business tangible personal property is similar to that in Maryland or Pennsylvania. The flexible tax structure, absence of a franchise tax, and moderate tax burden make Montana attractive to entrepreneurs, especially those working in services, logistics, and online commerce.
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