2023 Montana Code Annotated › Title 15. Taxation › Chapter 31. Corporate Income Tax or Alternative Corporate Income Tax › Part 1. Corporate Income Tax Rate and Return › 15-31-103. Research and development firms exempt from taxation -- application

15-31-103. Research and development firms exempt from taxation -- application.
(1) A research and development firm organized to engage in business in the state of Montana for the first time is not subject to any of the taxes imposed by this chapter on net income earned from research and development activities during its first 5 taxable years of activity in Montana. For purposes of 15-31-401 and this section, "taxable year" means a research and development firm's taxable year for federal income tax purposes.
(2) (a) To be considered a research and development firm, the chief executive officer of the firm or the officer's agent shall file with the department of revenue an application for treatment as a research and development firm.
(b) The application must be made on a form to be provided by the department. The form must include, at a minimum:
(i) the name and address of each officer of the research and development firm;
(ii) the name of the research and development firm as required for the purpose of incorporation;
(iii) the information required by 35-7-105(1);
(iv) the date the articles of incorporation were filed with the secretary of state; and
(v) other information the department requires to effectively administer the provisions of this section.
(c) The application must be filed with the department before the end of the first calendar quarter during which the research and development firm engages in business in Montana.
(3) On receipt of the information required in subsection (2)(b), provided that it was filed in the time allowed under subsection (2)(c), the department shall designate the applicant as a research and development firm for the purposes of this section.
(4) Failure by an applicant to provide information required by the department under subsection (2)(b) or, except as provided in subsection (5), failure to file within the time allowed under subsection (2)(c) automatically disqualifies the applicant from being designated and treated as a research and development firm for the purposes of this section.
(5) The director of the department may grant an extension of time for an applicant to file an application for treatment as a research and development firm, provided the extension is given in writing and the extension does not extend beyond 30 days from the date the application was required to be filed under subsection (2)(c).
(6) For the purpose of calculating or otherwise determining the period for which a deduction, exclusion, exemption, or credit may be taken under the provisions of this chapter, the department shall disregard a research and development firm's first 5 taxable years of activity in Montana and administer the deduction, exclusion, exemption, or credit as if the corporation did not exist during those taxable years. This treatment of a research and development firm extends to net operating loss carryback and net operating loss carryforward provisions allowed under this chapter.
History: En. Sec. 1, Ch. 659, L. 1987; amd. Sec. 185, Ch. 368, L. 1991; amd. Sec. 18, Ch. 240, L. 2007; amd. Sec. 223, Ch. 271, L. 2019.