The Montana corporate income tax rate is a flat 6.75% of net income sourced to the state, with a higher 7% rate for corporations that make a Water’s Edge election.1Montana Code Annotated. Montana Code Annotated 15-31-121 – Rate of Tax, Minimum Tax, Distribution of Revenue Every corporation with a taxable connection to Montana owes at least $50 for the year, even in a loss year.
Flat Rate, No Brackets
Montana doesn’t use graduated brackets. The same 6.75% applies whether your Montana-sourced net income is $10,000 or $10 million. There are no surcharges layered on top for larger corporations, and the rate has held steady for several years.
The 7% Water’s Edge rate is an opt-in alternative aimed at multistate and multinational groups.2Montana State Legislature. Analysis of the Montana Corporation Income Tax Making the election narrows the combined report to domestic corporations and foreign entities with significant U.S. operations, excluding certain foreign income from the group’s Montana filing. The quarter-point rate bump is the cost of that narrower reporting scope.3Montana State Legislature. Montana Code Annotated 15-31-322 – Waters-Edge Election
The $50 minimum tax applies to any corporation subject to the tax, regardless of profit or loss.1Montana Code Annotated. Montana Code Annotated 15-31-121 – Rate of Tax, Minimum Tax, Distribution of Revenue A corporation with no property, sales, or payroll in Montana isn’t subject to the tax and doesn’t owe the minimum.
Which Corporations Pay It
The tax reaches C corporations and any other entity the federal government treats as a corporation, including LLCs that have elected corporate tax treatment with the IRS.4Montana Department of Revenue. Montana Corporate Income Tax Older statutes refer to a “corporate license tax,” but the legislature has clarified those references now mean the corporate income tax.5Montana Code Annotated. Montana Code Annotated 15-31-101 – Organizations Subject to Tax
You owe the tax if you’re “doing business” in Montana — meaning you have a taxable nexus with the state. Maintaining an office, employing workers, owning or leasing property, or generating revenue from Montana customers can each be enough on its own. You don’t need all of them.
How the Rate Applies to Multistate Income
If you operate in more than one state, 6.75% doesn’t apply to your nationwide profit. It applies to the share apportioned to Montana. For tax periods beginning after December 31, 2024, Montana uses a single-sales-factor formula, so the share depends entirely on where your customers are, not where your offices or employees sit.4Montana Department of Revenue. Montana Corporate Income Tax
A sale counts as a Montana sale when a product is delivered to a Montana buyer or a service is received by someone in Montana. A company with significant Montana facilities but mostly out-of-state customers will see a smaller apportioned share. A company with no physical Montana presence but heavy sales into the state will see a larger one.
Credits That Can Lower What You Owe
Several Montana tax credits can reduce liability below the headline rate. Among the ones relevant to businesses are the Jobs Growth Incentive Credit, the Historic Property Preservation Credit, the Media Tax Credit for qualifying productions, the Innovative Education Program Credit, and the Trades Education and Training Credit. A corporation that has paid income tax to another state on the same income can also claim a credit against its Montana tax for those payments.
Each credit has its own eligibility rules, caps, and schedules filed with Form CIT. Carryforward of unused credits depends on the specific credit, so check the governing statute for each one before counting on it.
Filing and Payment Deadlines
The return is Montana Form CIT, and federal taxable income is the starting point, so a complete copy of federal Form 1120 must accompany it.6Montana Department of Revenue. 2025 Montana Form CIT Corporate Income Tax Instructions Returns are due by the 15th day of the fifth month after the close of the tax year — May 15 for calendar-year corporations.7Montana State Legislature. Montana Code Annotated 15-31-111 – Return to Be Filed, Penalty and Interest
Montana grants an automatic six-month extension to file, pushing the deadline to November 15 for calendar-year filers. No separate request is needed. The extension covers only the filing, not the payment. Any tax owed is still due on the original May 15 deadline, and interest and penalties start accruing from that date on unpaid balances.
Electronic filing is required for tax periods beginning after December 31, 2022.4Montana Department of Revenue. Montana Corporate Income Tax Paper filing on Form CIT remains available only for corporations with gross receipts of $750,000 or less, or those granted a hardship waiver by submitting Form CWR.
Estimated Payments During the Year
Corporations expecting to owe $5,000 or more for the year must make quarterly estimated payments.4Montana Department of Revenue. Montana Corporate Income Tax For a calendar-year filer, the installments are due April 15, June 15, September 15, and January 15 of the following year.
The safe harbor is paying at least 80% of the current year’s liability across those four installments.8Montana Code Annotated. Montana Code Annotated 15-31-510 – Estimated Payments, Tax Returns, Penalty and Interest If income arrives unevenly through the year, you can annualize per quarter instead of paying equal installments. Missing an installment doesn’t trigger a separate penalty, but interest accrues on the underpayment from the installment’s due date until paid.
Penalties and Interest for Filing or Paying Late
The late-filing penalty is the greater of $50 or 5% of the unpaid tax per month, capped at 25% of the total tax due.9Montana Code Annotated. Montana Code Annotated 15-1-216 – Uniform Penalty and Interest Assessments The late-payment penalty is separate, at 0.5% per month on the unpaid balance up to 12%. A corporation that files late and pays late incurs both.
Interest runs at three percentage points above the prime rate published in the Federal Reserve’s H.15 release for the last business day of the prior year’s third quarter.9Montana Code Annotated. Montana Code Annotated 15-1-216 – Uniform Penalty and Interest Assessments It compounds from the original due date, not from when the extension expires. A corporation that files by the November deadline but didn’t pay in May will owe roughly six months of interest on top of any late-payment penalty.