Montana Tax and CPA Services: State, County and City Taxes

Montana taxes in ways that surprise newcomers: the income tax is being cut in steps, there is no general sales tax, a few tourist towns add their own resort tax, and the state itself values the property. This profile covers tax year 2025 returns (filed in 2026) and 2026 planning for anyone who lives, works, owns property or has employees in Montana.

How Montana taxes individual income

Montana starts with your federal adjusted gross income, uses the same type of deduction (standard or itemized) you took federally, and then applies its own additions and subtractions. The 2025 instructions do not allow the federal qualified business income deduction, but they do carry the new federal deductions for tips, overtime, vehicle loan interest and seniors into Montana taxable income.

The rates changed for 2026. These ordinary-income thresholds come from the Department of Revenue, and the higher rate applies above them:

Income above those amounts is taxed at 5.9% for 2025 and 5.65% for 2026. Long-term capital gains are taxed separately at 3.0% and 4.1%, with brackets adjusted for 2026. The Department also says the top rate is scheduled to fall to 5.4% for 2027 and the Montana earned income tax credit rises to 20% of the federal credit beginning in 2026.

Because the return starts from federal AGI, the part of Social Security taxed on your federal return generally flows through; Montana does not tax Railroad Retirement benefits. Taxpayers 65 and older get a $5,660 subtraction for 2025 (indexed annually). See our Social Security taxation guide and seniors and retirees page.

No sales tax, but lodging and resort taxes

The Department states that Montana has no general sales tax. Visitors still pay: in 2026 the Department describes the lodging facility sales and use tax as a combined 8% (4% sales plus 4% use), which short-term rental platforms must also collect. Its local resort tax page lists ten communities: Red Lodge, Virginia City, West Yellowstone, Whitefish, Big Sky, Cooke City, Craig, Gardiner, St. Regis and Wolf Creek. It lists a 3% maximum rate on lodging, restaurants, bars, destination recreation and luxury items, and says the Department does not administer the tax. Each town does, so confirm the rate and registration locally. Sellers shipping elsewhere may owe tax in other states; see our sales and use tax service.

Business taxes

On its corporate income tax page, current in 2026, the Department lists a 6.75% standard rate, 7% with a water's-edge election, a $50 minimum tax and a 0.5% alternative gross sales rate for businesses with only Montana sales of $100,000 or less. Calendar-year returns are due May 15, with an automatic six-month extension to file but not to pay.

S corporations and partnerships file Form PTE. Montana offers an elective pass-through entity tax, the usual workaround for the federal cap on deducting state taxes. The election is made annually on a timely filed Form PTE, cannot be revoked and cannot be made on a late return. The Montana Secretary of State handles LLC and corporation registration and annual reports; confirm the current fee and deadline there.

Payroll and unemployment insurance

Employers register for withholding through the Department of Revenue and for unemployment insurance with the Department of Labor and Industry. For 2026 the taxable wage base is $47,300, rates range from 0.00% to 6.12% under rate Schedule 1, new employers get industry-based rates, and most employers also pay an administrative fund tax of 0.18%. Workers' compensation may be placed with a private insurer, Montana State Fund or approved self-insurance. See our guides on state unemployment insurance and workers' compensation.

Working in Montana from another state

Nonresidents are taxed on Montana-source income. The Department's own example is someone who lived and worked in California until August and then worked remotely in Montana: those wages are Montana income even though the person is a nonresident. A narrow exclusion covers nonresidents with only wages for 30 or fewer days in Montana while working in several states; it does not cover the self-employed, pass-through owners, construction workers or people with other Montana income.

Montana has an income tax reciprocity agreement with North Dakota covering wages. Residents with income taxed by other states can generally claim a credit on their Montana return. Clients tied to Idaho, Wyoming or South Dakota should confirm which state may tax each paycheck.

Property tax

The Department's Property Assessment Division values all taxable property at 100 percent of market value, and counties use those values to calculate bills. Its 2025 information describes tiered residential and multifamily rates beginning at 0.76% on the first $400,000 of market value.

How we can help

We prepare Montana resident, part-year and nonresident returns, run multi-state tax reviews for people who split time with another state, and help owners weigh the pass-through entity election. We can also set up withholding and unemployment accounts and process payroll for Montana employees. Compare with our home state on the Illinois page. This is general information, not personal advice.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.