Montana Brewery Laws: Licenses, Taproom Rules, and Taxes

Montana brewery laws require two licenses before you can produce beer commercially — a federal Brewer’s Notice from the Alcohol and Tobacco Tax and Trade Bureau (TTB) and a state license from the Montana Department of Revenue — and nearly every rule you’ll operate under afterward, from taproom hours to tax rates to whether you can deliver your own kegs, turns on how many barrels you produce in a year. The state’s Cannabis and Alcohol Regulation Division (CARD) handles licensing and compliance for all alcohol manufacturers.¹

Licenses You Need Before You Brew

Federal registration comes first. Every brewery in the United States must file a Brewer’s Notice with the TTB, which the agency recommends submitting online and charges no fee for.² Montana will not advance your state application without that federal approval in hand.

A federal surety bond is only required if you expect to owe $50,000 or more in federal excise taxes in either the current or prior year.³ Most Montana craft breweries fall well under that line.

On the state side, Montana treats an alcohol license as a privilege, not a right. Every individual applicant must be at least 19, have no unrestored felony conviction, and show a clean record as a business person and citizen. These standards apply to every owner and officer. Your startup capital also has to come from a “suitable source,” meaning lenders and investors without criminal histories that would threaten public safety or effective alcohol regulation.⁴ Undisclosed investors can sink the application.

Every applicant and location manager must be fingerprinted. Prints go to both the Montana Department of Justice and the FBI, and the results feed directly into the Department of Revenue’s licensing decision.⁵

Applications are filed through the Department’s TransAction Portal.⁶ The initial brewer’s license fee is $500, and breweries producing 10,000 barrels or fewer per year pay $200 to renew each year after that.⁷ Once your application is accepted, the Department publishes notice weekly for four consecutive weeks, and anyone who wants to object has 10 days after the final notice to file a protest.⁸ Clear the protest window and pass an on-site inspection, and the license issues.

Which Size Brewery You Are

Montana sorts breweries into three production tiers, and the gap between them shapes almost every operational decision you’ll make.

A microbrewery produces under 200 gallons per year. It may run a sample room from 8 a.m. to 2 a.m. but can only offer free samples — no sales on the premises.⁹
A small brewery produces between 200 gallons and 60,000 barrels per year. This tier may sell beer in a sample room between 10 a.m. and 8 p.m., with a 48-ounce daily per-customer limit. Most Montana craft breweries live here.¹⁰
A large brewery produces over 60,000 barrels per year. It cannot offer any on-premises consumption or samples.⁹

Production counts include output from affiliated manufacturers and any beer you buy from other producers for resale.¹⁰ You cannot split production across two commonly owned entities to stay under 60,000 barrels.

Taproom Rules

For small breweries, the sample room is where most customer-facing business happens. A small brewery gets one sample room per license, and a group of affiliated manufacturers is capped at three sample room locations total.¹⁰ The sample room must sit on the licensed brewery premises.

Hours are fixed at 10 a.m. to 8 p.m. every day. Each customer may consume up to 48 ounces per business day on-site or by curbside pickup, and that cap does not apply to packaged beer purchased to take home.¹⁰ Patios and decks can be part of the sample room if they connect directly to the indoor space, appear on the approved floor plan, and have a perimeter barrier plus building, health, and fire sign-off.¹¹

Customers cannot bring their own alcohol onto the licensed premises. You can serve food, but a sample room isn’t a full-service bar and you cannot sell another producer’s beer except under the narrow collaboration rules below.

Collaboration Beers

You can serve beer brewed off-site at another brewery, but only if every participating brewer was physically present during brewing. Each brewery is capped at six distinct off-site collaboration beers per calendar year, and the volume of each is limited to an equal share among the participating brewers or seven barrels, whichever is less.¹⁰ Notify the Department before the collaboration and report sales afterward for tax purposes.

Selling Your Beer Off-Site

Montana follows the three-tier system: manufacturers, distributors, and retailers operate separately, and by default all beer distributed in the state must move through a licensed distributor’s warehouse.¹² The exception that keeps small breweries viable is self-distribution.

If you produce fewer than 60,000 barrels per year, you can deliver directly to licensed retailers using your own trucks and employees, subject to two caps: no more than the case equivalent of eight barrels per day to any single retailer, and no more than 10,000 barrels total per year across all direct retailer deliveries.¹³ Common carriers can’t be used for deliveries to retailers or to the public.

If you fully own a co-located retail license, beer sold at that co-located premises does not count against the 10,000-barrel self-distribution cap, though it still counts toward production for tax purposes.¹³ Cross either the 10,000-barrel self-distribution line or the 60,000-barrel production line and you have to use a licensed distributor for off-premises sales.

What You’ll Owe in Taxes

Montana charges a per-barrel excise tax on all beer sold in the state, whether a distributor or the brewery itself moves it. The rates are tiered by annual production:

Up to 5,000 barrels: $1.30 per barrel
5,001 to 10,000 barrels: $2.30 per barrel
Over 10,000 barrels: $4.30 per barrel

A barrel is 31 gallons, and the state return is due quarterly.¹⁴

Federal excise tax sits on top. Small domestic brewers producing two million barrels or fewer per year pay $3.50 per barrel on the first 60,000 barrels and $16.00 per barrel on production above that up to two million. The general rate for larger brewers and importers is $18.00 per barrel.¹⁵ Federal operational reports are due by the 15th of the month after the reporting period, filed on TTB Form 5130.9 monthly or 5130.26 quarterly.¹⁶

Ongoing Compliance

You’ll file a monthly return with the Department of Revenue by the 15th of the following month, reporting beer produced, sold, and left in inventory. The Department can inspect your books and premises at any time to verify what you’ve reported.¹⁷ These reports drive your state excise tax bill, so sloppy numbers draw audits fast.

Before any labeled container of beer leaves your brewery, the label needs a Certificate of Label Approval (COLA) from the TTB, filed on Form 5100.31. Malt beverage labeling rules sit in 27 CFR Part 7, and every container of 0.5% ABV or more sold in the U.S. must carry the federal “GOVERNMENT WARNING” statement in bold capitals, with minimum type sizes running from 1 mm for containers of 8 fluid ounces or less up to 3 mm for containers over 3 liters.¹⁸

Kegs sold to consumers need identification tags. For this purpose, a keg is a sealed container holding at least seven gallons, and the tag — provided by the Department of Revenue — must display the licensee’s name, address, and telephone number along with a warning that removing or defacing it is a criminal offense.¹⁹ The tag identifies the retailer who sold the keg, not the brewery that made the beer.

What Happens If You Break the Rules

After giving the licensee a chance for a hearing, the Department of Revenue can impose any combination of these consequences:

A reprimand on the licensee’s record
License suspension of up to three months
License revocation, available only when a violation threatens public health, welfare, or safety and no fix is proposed
Refusal to renew, under the same threshold as revocation
Civil penalty of up to $1,500 per violation²⁰

Revocation and non-renewal carry the highest bar, so most first-time infractions produce a suspension, a fine, or both. Serving outside allowed hours, pouring past the 48-ounce taproom cap, or self-distributing beyond 10,000 barrels in a year could each trigger action. Repeat violations and anything that directly endangers public safety put the license itself at risk.

1
Montana Department of Revenue. Cannabis and Alcohol Regulation
2
Alcohol and Tobacco Tax and Trade Bureau. Brewer’s Notice
3
Alcohol and Tobacco Tax and Trade Bureau. Elimination of Bond Requirement for Small Breweries/Brewpubs
4
Montana Legislature. Montana Code 16-4-401 – License as Privilege
5
Montana Legislature. Montana Code 16-4-414 – Fingerprints Required of Applicants and Location Managers
6
Montana Department of Revenue. TransAction Portal
7
Montana Legislature. Montana Code 16-4-501 – License and Permit Fees
8
Montana Legislature. Montana Code 16-4-207 – Notice of Application, Investigation, Publication, Protest
9
Montana Department of Revenue. Domestic Brewery License Booklet
10
Montana Legislature. Montana Code 16-3-213 – Brewers or Beer Importers Not To Retail Beer, Small Brewery Exceptions, Brewer Collaboration
11
Montana Department of Revenue. Domestic Brewery License Booklet
12
Montana Legislature. Montana Code 16-3-514 – Beer Required To Be Shipped To Distributor
13
Montana Legislature. Montana Code 16-3-214 – Beer Sales by Brewers, Sample Room Exception
14
Montana State Legislature. Montana Code 16-1-406 – Taxes on Beer
15
Alcohol and Tobacco Tax and Trade Bureau. Tax Rates
16
Alcohol and Tobacco Tax and Trade Bureau. Filing Due Dates for Operational Reports FAQs
17
Montana Legislature. Montana Code 16-3-211 – Monthly Report of Brewer, Beer Importer, or Retailer, Inspection of Books and Premises
18
Alcohol and Tobacco Tax and Trade Bureau. Certificate of Label Approval (COLA)
19
Montana Legislature. Montana Code 16-3-321 – Keg Registration
20
Montana State Legislature. Montana Code 16-4-406 – Renewal, Suspension or Revocation, Penalty