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Editorial 6 MIN READ

Montana in April 2025: the $20 annual report and the no-sales-tax wrinkle

LLCs and corporations both pay $20 a year, corporate income runs a flat 6.75%, and there is no sales tax to collect on anything

The Editors
Staff, Incorporator.org
6 min read Updated
Contents 6 sections
  1. The mechanics of the annual report
  2. The fee stack against Delaware
  3. Corporate and individual income tax
  4. No sales tax changes the e-commerce calculation
  5. Who Montana actually makes sense for
  6. Sources

Montana LLC costs $70 to form and $20 a year to keep, and the Montana annual report is due April 15 for LLCs under Mont. Code Ann. § 35-8-208. Those are the numbers a founder actually needs in hand, and they are among the lowest recurring numbers any state publishes.

This is a guide for someone filing in Montana in the spring of 2025, sitting with the deadline already two weeks behind them or looking at the 2026 cycle and trying to decide whether the state is worth the conversation.

The mechanics of the annual report

Montana requires every LLC registered in the state to file an annual report with the Secretary of State. The fee is $20 and the statutory deadline is April 15 of each year, set out at Mont. Code Ann. § 35-8-208. The report itself is a short form: the LLC's name, its principal office, the registered agent and registered office, and the names of members or managers depending on how the entity is organized. There is no financial disclosure. The Secretary of State does not want your revenue number.

Corporations file on a parallel track under the Montana Business Corporation Act. The corporate annual report also costs $20, the statutory authority is Mont. Code Ann. § 35-14-1622, and the filing is likewise content-light: principal office, registered agent, directors and officers. The state rolled its corporate code in 2019 from the older Title 35 Chapter 1 into the modern Title 35 Chapter 14, tracking the Model Business Corporation Act, which is why the section numbers in older articles do not match what you will find on the current books.

Filing happens through ePass Montana, the Secretary of State's single sign-on portal for business services. Most filings clear immediately. The online fee and the paper fee are both $20, so there is no reason to mail anything.

Miss the April 15 LLC deadline and Montana does not begin with a dramatic penalty. The entity slides toward involuntary dissolution instead. If the report is still unfiled by December 1, the Secretary of State initiates administrative dissolution proceedings. Reinstatement is possible afterward but costs more and requires a separate filing. April 15 is cheap to hit and expensive to ignore.

The fee stack against Delaware

The comparison most founders are implicitly running is Montana against Delaware, because Delaware is the default and every other state is a deviation from it. The arithmetic is straightforward.

Delaware charges $90 to form an LLC and $300 a year to keep it, via a flat franchise-style annual tax due June 1. Montana charges $70 to file Articles of Organization and $20 a year thereafter. Over a ten-year hold, Delaware costs $90 in formation plus $3,000 in annual tax, for $3,090. Montana costs $70 plus $200, for $270. The spread is not small, and it is not a one-time spread; it compounds for every year the entity remains on the rolls.

Montana sits in the low-cost cluster with Wyoming, New Mexico, and a handful of other states where the recurring number is trivial. What it does not offer is Chancery, the Delaware body of precedent, or the signaling premium that comes with a Delaware mailing address on a Series A term sheet. Those are real goods; they are not free, and they are not relevant to most founders.

Corporate and individual income tax

Montana levies a corporate income tax at a flat 6.75% on net income apportioned to the state, under Mont. Code Ann. § 15-31-121. There is no tiering, no bracket structure, and no meaningful difference between a small corporation and a large one in the rate mechanics. The base is federal taxable income with state-specific adjustments and an apportionment formula for multi-state operations. For a C-corp doing business only in Montana, the effective rate converges on 6.75% of federal taxable income.

The individual side of the code was reworked in 2021 when the legislature passed SB 399. The bill collapsed the historical seven- bracket individual structure into a two-bracket system and took effect for tax year 2024. The two rates are 4.7% and 5.9%. For pass-through owners of Montana LLCs, who report LLC income on their personal returns, the top marginal state rate to think about is 5.9%. That is lower than the old top bracket of 6.9%, which had held for most of the preceding decade, and it puts Montana in a middle-of-the-pack position among states that tax individual income.

The combination that matters for small operational LLCs is a flat 6.75% on corporate net income, 5.9% top marginal on pass-through, a $20 annual report, and no state sales tax.

No sales tax changes the e-commerce calculation

Montana is one of five states with no general sales tax, alongside Alaska, Delaware, New Hampshire, and Oregon. For an e-commerce business that ships from Montana, this is not a rhetorical benefit; it is a structural one in 2025.

After Wayfair, a seller's sales-tax collection obligation is driven by economic nexus in the destination state, not the seller's home state. That logic means no-sales-tax status does not exempt a Montana seller from collecting tax on a sale shipped to California or Texas. What it does mean is that any purchase, any intrastate transaction, any in-person pickup, and any services rendered inside Montana carry no sales-tax overhead. For a retailer with a physical Montana presence and local customers, the state layer of the tax stack simply does not exist. For a B2B services firm serving Montana clients, invoicing is simpler.

The second-order effect is operational. Montana businesses do not register for, remit, or audit against a state sales-tax authority at home. That removes a compliance track and a class of notices that small businesses in other states spend real hours on.

The point at which the no-sales-tax story gets oversold is when someone implies it insulates a Montana seller from destination-state collection duties. It does not. A Montana LLC selling $200,000 of goods to California customers is collecting California sales tax the same way a Texas LLC would be. The home-state shelter only covers home-state transactions.

Who Montana actually makes sense for

Three kinds of businesses belong in Montana in 2025.

The first is an operational business physically located in Montana. If the owners live in Bozeman, Missoula, or Billings, the conversation is over. Form at home, file the $20 annual report, pay the 5.9% on pass-through income, and get on with the work. The state is not expensive, the statutory framework is clean, and there is no justification for the complexity of a foreign LLC arrangement.

The second is a holding vehicle for Montana real estate. The LLC Act at Title 35 Chapter 8 authorizes member-managed and manager-managed structures with the flexibility founders expect, and property-holding entities generally want to sit in the same state as the property for title and litigation cleanliness. Montana ranches, Montana rental portfolios, and Montana vacation rentals are straightforward cases.

The third is an e-commerce or local-retail operation where the founders have a choice of home state and want the combined effect of a $20 annual report, 6.75% flat corporate rate, 5.9% top individual rate, and no state sales tax on Montana-side transactions. The effect is modest on any single dimension and meaningful in aggregate.

Montana is a less compelling pick for venture-backed C-corps aiming at an exit. Institutional capital almost always wants Delaware, and converting later is both expensive and disruptive. It is also a less compelling pick for out-of-state founders forming purely for privacy or tax minimization; the home state's foreign-qualification rules will chase the entity back, and the Montana annual report advantage disappears once you are paying both state's fees.

If you are forming this quarter and the business is local, file at home with ePass, pay the $70, and put April 15 in the calendar for next year. If you are shopping states and the math matters, Montana belongs on the short list alongside Wyoming, and the tiebreaker between the two is usually whether the founders want to physically operate from the state or not.

Sources

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