Administrative Rules of Montana › Department 42 - REVENUE › Chapter 42.2 - GENERAL DEPARTMENT RULES › Subchapter 42.2.3 - Public Participation and Penalty and Interest › Rule 42.2.304 - DEFINITIONS

Current through Register Vol. 13, July 5, 2024
The terms used by the department are, in great part, defined
				  in Titles 15, 16, 39, and 72, MCA. In addition to these statutory definitions,
				  the following definitions apply to ARM Title 42, unless context of a particular
				  chapter or rule provides otherwise:
(1) "Amended return" is a return that amends
				the original return defined in (36).
(2) "Ancestor" means a lineal ancestor and a
				collateral ancestor if related by blood. Sections
				72-11-102,
				72-11-103, and
				72-11-104, MCA, describe how
				kinship and degrees of kinship are determined.
(3) "Annual accounting period" means the
				accounting period used for federal income tax purposes.
(4) "Association" means an organization of
				people having a common interest.
(5) "Business activity" refers to the
				transactions and activity occurring in the regular course of a particular trade
				or business of a taxpayer.
(6)
				"Calendar year" means a 12-month period beginning January 1 and ending December
				31.
(7) "Compensation" means wages,
				salaries, commissions, and any other form of remuneration paid to employees for
				personal services. Payments made to an independent contractor or any other
				person not properly classifiable as an employee are excluded. Only amounts paid
				directly to employees are included in the payroll factor. Amounts considered
				paid directly include the value of board, rent, housing, lodging, and other
				benefits or services furnished to employees by the taxpayer in return for
				personal services; provided, that such amounts constitute income to the
				recipient under the federal IRC. In the case of employees not subject to the
				federal IRC, e.g., those employed in foreign countries, the determination of
				whether such benefits or services would constitute income to the employees
				shall be made as though such employees were subject to the federal
				IRC.
(8) "Contiguous parcels of
				land" means separate land acreage in the same ownership that are
				adjacent.
(9) "Corporation" or "C
				corporation" means a corporation, limited liability company, or other entity
				treated as an association for federal income tax purposes. The term does not
				include an S corporation or a disregarded entity. The term includes a regulated
				investment company (RIC) as defined in IRC 851, a real estate investment trust
				(REIT) as defined in IRC 856, and a corporation that has elected to be treated
				as a real estate mortgage investment conduit (REMIC) as provided in IRC
				860D.
(10) "Deficiency assessment"
				means an amount greater than the amount disclosed on a return or report filed
				with the department.
(11)
				"Department" means the Department of Revenue as defined in
				2-15-1301, MCA.
(12) "Dependent" means any individual listed
				in 15-30-2115, MCA, as amended, over
				one-half of whose support for the calendar year in which the taxable year of
				the taxpayer begins was received from the taxpayer. In determining whether or
				not an individual received for a given calendar year over one-half of his
				support from the taxpayer, there shall be taken into account the amount of
				support received from the taxpayer as compared to the entire amount of support
				the individual received from all sources, including support which the
				individual himself supplied.
(13)
				"Descendant" means a lineal descendant and a collateral descendant related by
				blood. Sections
				72-11-102,
				72-11-103, and
				72-11-104, MCA, describe how
				kinship and degrees of kinship are determined.
(14) "Discretion" means the power to do or to
				refrain from doing a certain thing.
(15) "Disregarded entity" means a business
				entity that is disregarded as an entity separate from its owner(s) for federal
				income tax purposes. The term includes a limited liability company with one
				owner, a qualified subchapter S subsidiary not treated as a separate
				corporation, and a partnership, syndicate, group, pool, joint venture, or other
				unincorporated organization electing under IRC 761 to be excluded from
				application of partnership tax rules. A corporation is not a disregarded entity
				by virtue of being included in a federal consolidated return.
(16) "Domiciled" means having a residence in
				the state of Montana as stated in
				1-1-215, MCA.
(17) "Earned income" means:
(a) wages, salaries, or professional fees,
				and other amounts received as compensation for personal services actually
				rendered; and
(b) the amount of the
				taxpayer's net earnings from a trade or business which is wholly or partially
				subject to the federal self-employment tax.